Understanding of the Business Model Samples †MyAssignmenthelp.com

Question: Discuss about the Understanding of the Business Model. Answer: Introduction Business model is one of the main and inseparable parts of the business concepts. A real life organization can never thrive in the competitive business environment without developing a proper business model. Almost every organization must develop an appropriate business model at the point they are a start up organization. The aim of this paper is to discuss the various models and evaluate them from different perspectives like business models as e-business archetype, business models as a strong activity system and business models as cost-revenue architecture. The term of business context and the need for change in the business environment has to be discussed in this paper as well. This discussion will lead to a better understanding of the business model concept and its usefulness in the modern business environment. Business model Business model is considered to be the way by which the company produces it revenue and the very process by which they increase their profitability as well (Amit Zott, 2012). The metric gross profit is the method by which the analysts use to measure the efficiency and the effectiveness of a business model introduced by the particular company. This gross profit for the company can be calculated by the subtracting the selling cost of the good from the revenues. One of the two business models that are most important to evaluate the business model of a company are its pricing and costs. A certain company can obviously increase the price of its products whenever they feel comfortable (Amit Zott, 2012). They can be able to find the inventories at the decreased costs of the products as well. The thing is that both of these methods can increase the gross profits for the company. Gross profit is the way the company is heading to and it is strictly based on the figures, not on how efficiently the management is working at that moment for the company. Some of the business investors can run the business by focusing on the business models, focusing lightly on the efficiency of the management team. This can lead to a inefficient management team as well. Business archetypes Business archetypes are very fundamental issues when discussing about the business models in the organizations (Bocken et al. 2014). Sometimes challenges arise within a business organization when the business organizations and the decision makers are not aware of some particular business models. This happens because they have only studied about the different business strategies as important theories. The practicality of the situation is not studied by those people. The idea of the business model archetypes or the e-business model archetypes (especially for the online businesses) was invented by the psychiatrist Carl Jung. He introduced some templates within the business models and categorized them by two types. One is primary and the other, secondary (Bocken et al. 2014). The primary archetypes are the Product, the second one is Service and the third one being the Trade. Product refers to the buying of a product only once, The second phase includes the service that refers to doing so mething manually and charge fees for it. The third one goes for trade that means connection of the buyers and the sellers. The things in the secondary stage are Brokerage, Subscription, Marketplace and Ecosystem (Bocken et al. 2014). Business model is an activity system The business model is a very integral part of the business and it is deeply interrelated with the activity system of a business organization. All the decisions and the business models are closely related and interwoven between one another (DaSilva Trkman 2014). This sets up then fact that all the things within a business model are closely linked with one another. As it is clear the role of a business model is to create business opportunity for the customers and the other parties, the value chain has to be created in this manner. The customers value proposition has to be taken under consideration and the activities have to be performed through a certain system (DaSilva Trkman 2014). Cost-revenue architecture for business models The cost-revenue architecture has to be implemented in the business firms do that the business models can be applied strongly. The purpose of implementing the cost-revenue architecture is to develop the growth possibilities for the organizations (De Giovanni Zaccour 2013). The organizations have to achieve the next level of the profitable and sustainable growth in this regard. These effective models help the organizations to bridge the gaps between the aspirations for growth and current executions of the revenues being collected. The cost of the sales has to be absolutely perfect so that predictable growth can be assured by the firms. The revenue programs have to be managed and designed properly so it they can gain its desired objective. The sales of the company have to be converted as well by applying the proper business models. The three pillars of the revenue architecture are strategy, systems and programs. The go-to-market strategy has to be aligned with the business model. The sales have to be made able by integration of the brand, channels, people and processes. In the third part, buyer engagement programs have to be incorporated across marketing and sales of the firm (Hartwig et al. 2015). Meaning of business context Business context is a complex term in the business operations in the modern day business environment (Hacklin Wallnfer 2012). The goals for the organization have to be set by the leaders and the workforces have to be identified with those goals so they can chase to achieve those goals. This is the role of the leaders to understand positively what should be the goals and missions should be. They should be able to realize in which way their business is going and they should be able to identify whether their business is growing, losing its market, going through a transition period, introducing new technologies to achieve the goals and many others. The managers should be able to recognize the impact of economy on that particular industry sector and the impact of the market size on their organization. The customers or clients should be identified as well. The things that go on the business organizations and its impact on the workforce should be identified as well (Hacklin Wallnfer 2012) There are no doubts in this uncertain period; the business environment has to be changed at some point of time. The external environment of the business is liable for these changes. Whenever the business circumstances change in the operating area, new things tend to happen (Craig Campbell, 2012). Whenever a firm targets to expand in new regions, foreign countries in different continents, it has to initiate the changes. The business expansion involves many cross-cultural issues in the foreign countries and the economic factors vary in different countries as well. This is why change is an inevitable thing in the business. Arguments can be raised in this context when the famous organization Woolworths went on to expand their business territories they had to face many problems like they had to adjust to new workplace environments, many geographical and financial problems ("Woolworths Limited" 2017). They even had to face many political, social and technological problems. They had to overcome these problems by applying the FDI policies and improving the supply chain management (Stadtler 2015). They had to innovate new technologies by which they can connect the target customers with their products. They had to take the customers under their belt so that they could overcome those problems. Static and dynamic business models The static firms have to initiate certain changes within the organization so that they can adjust to these changes in the business environments in the current time (Weske 2012). The various new innovations in the business like the customer electronics, information technology, telecommunications and media are very important parts in the business sector. So, it is of utmost importance to adapt to the changing environment that encourages the dynamic business models. Conclusion This problem can be concluded by saying that business model innovation is a very fruitful method and technique to overcome the troubles in a particular business environment. The organizational leaders must be aware of the fact that they should be able to adjust with the different changing issues comprehensively. This would enhance their chances to survive in this volatile and uncertain competitive business environment. The innovative new technologies have to be implemented by them so they can take the competitive advantage over their rivals. References Amit, R., Zott, C. (2012). Creating value through business model innovation.MIT Sloan Management Review,53(3), 41. Bocken, N. M. P., Short, S. W., Rana, P., Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes.Journal of cleaner production,65, 42-56. Cai, S., Yang, Z. (2014). On the relationship between business environment and competitive priorities: The role of performance frontiers.International Journal of Production Economics,151, 131-145. Craig, T., Campbell, D. (2012).Organisations and the business environment. Routledge. DaSilva, C. M., Trkman, P. 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