Identify the primary different business models, and explain why understanding and devising a sustainable business model critical to developing is an effective strategy. Is being a first mover an advantage or disadvantage; why?
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There are four basic types of business models. These are
manufucturer, distributor, retailer and franchise. A manufucture takes raw materials
and converts them into products. The distributor then buys the products and
resales them retail outlets or sells to the public. Retailers sell the products
to the final public. A frachise can either be a manufucter, retailer or
strategy defines the way a business organisation wants to sell its products to
its customers and make its presence known to them. Strategy defines how a
business will create, deliver and capture value. A business organisation will depend
on its model to deliver its strategy. The business model is therefore vital
since its the vehicle that an organisation uses to deliver its strategy.
Being a fast mover is a disadvantage for several
reasons. First, there is no actual market and a fast mover actually tries to
offer a solution with no apparent market.secondly, it is very expensive to be a
first mover due to the publicity costs, supply chain costs, training, research
and so forth. Thirdly, research shows that the first version is never right and
products have to be customized later on to exactly fit customer needs. Fourthly,
first mover opportunities are actually hard to capture and require immediate
actions which are usually hard to implement.
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Sep 18th, 2015
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