Business Models and Innovation
Added on 2020-02-24
4 Pages1082 Words51 Views
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After critical analysis of the secondary data on the web, I have found out that allsuccessful companies in the market use innovative and effective business model to improvetheir revenue and profit in the market. The market trends and technology is changing at arapid and the organization will have to keep using innovation so that they can maintain theirsustainability and competitive advantage. The use of innovation in the business model hasbeen adopted by most of the major multinational companies all over the world so that theycope up with the changes in the business environment. The use of big data is one of the majorchanges that have been accommodated by the companies.The business model can be defined as the clear and summarized way of portraying theoperations of a business. The business model should be as such that it could be described inlimited number of words. The objective of all the companies is to provide value to theircustomers and the strength of the value proposition will determine the market acquisition ofthe organization. . The company with good innovative business model will be able to increasethe life expectancy. The business model will determine the feasibility of the business andhelp in identifying the contingencies in the business. The business model of an organizationwill have to be evolved on a continuous basis as it helps in the creation of new sources ofgeneration of revenue.Archetype can be defined as the fundamental personalities and roles that are derivedto create unique personalities. The archetypes can be divided into primary archetype andsecondary archetype where product archetype, service archetype and trade archetype areincluded in the primary archetype. The secondary archetype consists of brokerage archetype,marketplace archetype, subscription archetype and ecosystem archetype. The Tradearchetypes consist of the Ecommerce business where the model connects the potential buyers
with the various products they are searching. This means they act as a mediator between thebuyers and the sellers and derive the profit from the arbitrage. These archetypes make profitfrom the spread between the cost of acquisition and the selling price. The main key to thisbusiness is sourcing and capital requirement for organizations following this business modelwill be moderate.The engagement of the physical, human and the capital resources so that theorganization can accomplish a specific purpose can be defined as activity. The businessmodel consists of all the key activities in an organization and they are all interlinked. Thevarious activities within an organization are designed in such a way that one activity isdependent on the other activities. There are lot of activities, which are performed at aninternal level, and there are few activities that are performed by the external parties. . Thebusiness model for each industry will be different and there has to be uniqueness among thebusiness models in various organizations. The business model will have to be developedaccording the needs and the activities of the organization.The final aspect of a business model is the analysis of the cost structure and therevenue streams of the organization. Cost structure includes the important costs that areassociated with the product and the service. Revenue streams will identify the sources ofrevenue generation for the company and the suitable methods that can be used. It will alsodetermine the value the consumers are willing to pay for the product. When the cost ofacquisition is more than the lifetime value of the consumers, then the project and the productare not feasible and consumer market is not ready for the product. The two costs that areassociated within an organization are the fixed and the variable cost. The fixed cost remainsthe same whereas the variable cost of an organization will decrease with the passage of time.The companies that are able to maintain their sustainability in the market will be able tomaintain a balance with their cost and revenue generation.
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