Business Understanding: Exploring Goals, Models, and Essential Factors

This essay provides a comprehensive overview of business understanding, exploring the essential elements for business development and success. It begins by defining business understanding as the process of developing and strengthening existing business structures, emphasizing the importance of leadership, customer focus, information management, and client management strategies. The essay then delves into the two major goals of business understanding: increasing company value and generating stabilized income. It discusses the factors that contribute to company value, such as return on investment and profit margins, as well as strategies for increasing profit. Furthermore, the essay examines the importance of generating stabilized income through effective supply and demand analysis and customer interaction. The essay also explores the significance of business models, including manufacturer, distributor, retailer, and franchise models, and their role in understanding business processes and challenges. It highlights factors crucial for business understanding, such as organizational culture, knowledge management, and customer requirements. The essay concludes by emphasizing the importance of business understanding for proper business management and growth, highlighting the significance of business model implementation and the benefits of a sustainable income and growth structure.

Running head: BUSINESS UNDERSTANDING
BUSINESS UNDERSTANDING
Name of the Student
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Introduction
This essay will discuss about the business models that will help in developing a
precise understanding regarding the developing of business. Understanding business is about
developing and strengthening of business structure that is existing. Leadership, customer
focus, information management, strategies to manage clients are the basic milestones that
must be considered for better execution of the business. Running a business for a long time
requires proper understanding of the business requirements and hard work. Businesses that
are ongoing has the major goal of generating revenue from the assets. This generating of
assets can be tangible as well as intangible in nature.
Discussion
Two major goals of understanding business are to increase the value of the company
and generating and stabilizing the income rate.
Value of company
It is considered that one investment is made in a particular business, the return of
investment includes all the dividends, rents, interests and other source of incomes that are
generated while commencing of the business are the factors that increases the value of the
business. Return from the business includes better processing of the system as per the excess
income that is made from the investments that increases the value of the business (Bridge and
O'Neill 2017). A difference set of margins is set for both the business aspect and the finance
aspect. Cost incurred in business is diversified in terms of direct cost and indirect cost. It is
considered that higher distance in between financial points are considered as one of the
advantages of the system. Profit margin is one of the major concerns of the system. It is also
estimated that in case the revenue that is being earned surpasses the cost that is incurred in
the projection of the business management, it can be stated that the business is making profit

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but in case the revenue that is generated is lower than the value of the business, it is termed to
be a loss in the business management system (DaSilva 2018). Small things are taken into
consideration for increasing the profit of the business. Several strategies like usage of less
energy, operational performance, increase in price and margin helps in increasing the value of
the company.
Generating Stabilized Income
Generating a stabilized income is a major goal of business commencement
methodology. Supply and demand of the products that are being manufactured are the main
concerns of the business organization (Rong et al. 2016). Analysing the set of buyers are the
major aspect that will be taken into consideration for better estimation of the income that can
be made after selling of the manufactured goods. Proper interaction in between the buyers
and sellers are established. With the help of this buyer and seller establishment,
understanding the requirements of the clients can be made and the processing can be made
hence wise. Cost price of the goods that are being used for manufacturing of the products is
the key constrain of setting up of the selling price of the product (Forkmann et al. 2017). The
major aspects that determines the success of the business organization includes number of
sales of the product, margin of profit and return of investments. Market competition is one of
the major aspect that will provide better understanding of the scenario of the business.
Despite having several manufacturing business organizations the main aspect that is taken
into sedation includes the fact that competition in market stays high. This includes the fact
that proper management of the execution of the entire processing gets affected in a positive
manner.
Execution of the project business management gets performed as per the required
deployment of systems. This is the main reason that management of the business is

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performed as per better management terminology. This is one of the major aspect that
commencement of the business management gets performed in a better manner. In case the
processing of the project gets performed as per the terminology of the manufacturing and
processing unit the main aspect that is processed as per better execution of the business
management. This is one of e main reason that business processing is one of the main aspect
that affects the business commencement in a better manner (Quinton and Wilson 2016). With
presence of similar business present in market, introduction of innovation must be possessed.
This includes new qualities of the project are included. Pricing strategies must be innovative
in nature. Innovative pricing strategies will include better management of the project as per
gaining a vast audience base. With better pricing strategy and innovation introduction gaining
better audience base will help business organizations to have an edge over their competitors.
Trying to lowering the cost of good will help in decreasing the selling price as
manufacturing cost will be reduced. Productivity efficiency is also considered as one of the
major aspect that can be considered as one of the major benefit that will help in increasing the
efficiency of business management. Maintaining quality of the products are also one of the
major reason that execution of the project are performed in a better manner (Wirtz et al.
2017). Sustaining in a business field is one of the major aspect that must be taken into
consideration. Sustaining in business field for a prolonged period is one of the main goal of
the business organization. Sustaining in the same field for a prolonged period the main aspect
that is taken into consideration is that maintaining of quality. This maintaining of quality
indicates that the audience base of the business organization will be well maintained and
hence the management of the project will be having a better execution policy.
Business models
Business model is used for better profit making process that is used by different
business organization. Business model helps in understanding the processing of the products

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and services. Business model is not only concerned regarding profit making but also having a
proper understanding of the challenges that might be faced by the business organization
(Schaltegger, Hansen and Lüdeke-Freund 2016). Business model is considered as high level
plan that is used for profitability of a particular business. Value proposition is considered as
one of the major aspect that performs evaluating of the target audience, value proposition,
developing marketing strategies. The main issue that most of the business organization faces
is underestimation of the cost that will be incurred in the terminology of the system (Wieland,
Hartmann and Vargo 2017).
The basic business models that are used in this process includes Manufacturer
business model, Distributer business model, Retailer business model, retailer business model
and Franchise business model. The basic advantages that are provided as per the business
model includes fulfilling the client needs and perform better in terms of competition (Reim,
Parida and Örtqvist 2015). Understanding of the gross profits are also one of the major
advantage of performing one way analysts as per investors and evaluate the success of the
business. Company’s gross profit will also be well understood.
Factors important for understanding business
Factors that are required for better understanding of business includes understanding
the required business organization culture. With understanding of the preferable business
culture the main advantage that will be enjoyed is that developing a better bond in between
the employees of the organization. Knowledge management is one of the major aspect that
affects better business understanding (Storey 2016). Clearly defined roles and scope help in
better understanding of the project. Continued scalability will also help in better
understanding of business processing. Cash flow is one of the major aspect that affects the
understanding of the business management. Requirement of internal tools understanding also
helps in better understanding of business. Understanding of customer requirement is also

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required for understanding demands and success factor at are related to the project. With
proper customer requirement understanding better analysis of business can be performed and
hence usage of business understanding has such high importance in the process of business
understanding (Srnicek 2017). Business understanding helps in proper estimation of the
growth in business structure. Initiation of the business understanding must be performed as
per the evolution stages of the business organization as this will help in better estimation of
the outcome of the business in coming years.
Conclusion
From the above discussion it can be stated that better understanding of business is
required for execution of business in a positive manner. This insists the fact that the
management of the entire procedure of business management will get affected in a positive
manner. Usage of Business models are also used for better completion of business
understanding. The main advantage that business understanding provides includes better
performing of business that is to be undertaken. This is one of the major reason that
functioning of business management gets better. Business model implementation is
considered as a major implication that will lead to proper assessment of the business. The
main advantages that will be provided after proper business understanding includes
understanding of the importance of the business culture. Increasing stability of the business
and having a sustainable income for a prolong period is considered as the main goal of
business understanding. This will help in estimation in the growth structure of the business
organization.

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Reference
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