Understanding Business Models
Added on 2019-10-01
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Running Head: STRATEGIC MANAGEMENT1Strategic Business Model
STRATEGIC MANAGEMENT2Question 1In the case of proprietary-based systems, intellectual property rights are possessed by thepublisher. The user organization becomes able to use the system after receiving permission fromthe publisher (Delgado et al., 2015).Seven-Eleven currently uses the proprietary-based businessmodel for its e-commerce business. The advantages and disadvantages of this model are asfollow—Advantages The proprietary-based systems are easy to use. The users do not need advanced technicalskills to use it. So, these systems are more suitable for the organizations where theworkforce does not possess adequate knowledge of technology (Sood, Shipra & Soni,2016). In the case of Seven-Eleven also, the staffs did not have advanced technologicalknowledge. As an effect, using the proprietary system was a more suitable option forthem.The security is high in the proprietary-based systems as it is accessed by a few numbersof users (Singh et al., 2015). Seven-Eleven management deals with valuable inventoryand sales data using the proprietary network. As an effect, the management needs to keepthe data secured to maintain its competitiveness. The high security makes the existingproprietary based system suitable for the organization. The proprietary systems include a wide range of functionalities which help thebusinesses to carry out different tasks using the same platform (Hilton et al., 2016). Itreduces the need for integrating different systems for different tasks. The enhanceduniformity helps the businesses to conduct its activities simply. The greater simplicity
STRATEGIC MANAGEMENT3also makes the proprietary-based systems attractive to the business owners. Seven-Elevenmanagement used the proprietary system for communicating with the customers, trackingthe sales pattern, predicting the demand and improving the supply chain management.Later the organization also used the same technology for training the staffs. The multiplefunctionalities of the system helped the management to utilize it to the optimum level.While using new technology, constant support is necessary for businesses. Constantsupport helps the businesses to utilize the system uninterruptedly (Cadariu et al., 2015).Any interruption in the use of technology affects the efficiency of business operations.Due to the lack of resources, dealing with technological issues is challenging for manybusinesses. Seven-Eleven also lacked employees with sound knowledge of technology.As an effect, managing the issues associated with the new system. Being a proprietarysystem, the new technology was supported by Microsoft. It enhanced the usability of thenew system to the management.Despite the multiple advantages, the proprietary systems are disadvantageous in the followingways—The user organization becomes highly dependent on the publishers by opting for aproprietary business model (Sood et al., 2016). The publisher organization has greatercontrol over the pricing and the design. As an effect, the proprietary systems might beexpensive for the businesses. Hence, using those might affect the profitability of thebusiness. Every business has different needs. The technology requires being tailored accordingly tomeet those needs. The proprietary systems are developed in a standardized manner andthe opportunity of customization is lower (Sood et al., 2016). So, meeting the unique
STRATEGIC MANAGEMENT4business needs is not possible for these systems. In the modern market environment,businesses experience intense competition. Maintaining uniqueness is necessary fororganizations to retain their customers. Therefore, the use of the proprietary system in acompetitive environment is not advantageous. Any change in the initial requirement canmake the entire system obsolete. The businesses require investing in new systems in suchcases. It also reduces the cost-effectiveness of the system.Seven-Eleven aims at responding to the demands of the customers on time. Theorganization also uses unique business strategy as unlike the competitors, it emphasizeson maintaining the profitability of each store. It indicates that the business needs to useunique technological solutions to support the strategies. In this case, the lack ofcustomization opportunity affects the suitability of the proprietary based system.The proprietary based systems require specific hardware (Cadariu et al., 2015). Thebusinesses, therefore, require developing the infrastructure accordingly. The flexibility ofthe organizations to choose own infrastructure also reduces. Seven-Eleven does not usethe internet for the system. Instead, it uses satellite dish, telephone lines and mainframesfor digitization. To compete with others, the business needs to opt for digitization to theoptimum level. Use of the internet is necessary for the purpose. However, due to thedependence over proprietary systems, the organization has not become able to employ theinternet.Assessment on the use of proprietary-based systems indicates several issues in thedigitization and the use of infrastructure. Firstly, the businesses processes at Seven-Elevenare not fully automated. The tasks related to tracking the trucks for distribution and deliveryrequire manual effort. The partial digitization helped the organization in faster order
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