Discuss about the Business Plan for A Sustainable World.
Put simply, according to Lewis, business models are basic plans that enables the business planners to chalk out the ways through which money can be made. Business model is as simple as that. A proper business model is imperative to any business. Business model is a frequent term that is mostly used by most of the business organizations and consultancy firms. However, charting a business model is not that easy (Chambers & Humble, 2017). It must be kept in concern that all the aspects of business model are hypothetical. That is, the investment principle amount, the expected returns, the expected sales, the estimated profit margins and the rest of the other criterion are all assumed.
Since all the aspects of a business models are assumed, it may be a question that what may be the possible causes a business model remains imperative to any business organization or, how do business models for the organizations create value. In the book “The New, New Thing: Silicon Valley Story”, author Michael Lewis states that business model is essentially a form of art. Business models cannot be charted out by novice and neither extreme talent is the only criteria to craft an apt business model. It needs experience and endeavor to make business plans. At times, it needs a lot more to propose an apt business model for any particular organization.
A business model is a strategic plan, it is a conceptual structure that is used by companies and business organizations that induces the goals and aims of the company and also charts the way the company determines the achieve the respective goals (McKenzie 2017). Almost all the policies, ways, methods and approaches that are taken by a particular company are essentially a part of the business model that it is following. Business models were in use since the very start of business, that was mostly done by sailors on voyages. Business models began its widespread use with the advent of computer technology. A business model mainly has two parts or two categories. While the first category sums up the details of product including its designing and manufacturing process, the other category specifically deals with marketing and sales of the product. This marketing and sales department that is incorporated within the second category is yet divided into sub divisions like looking for the target customers, target markets and product distribution.
Business models are of different kinds. In order to understand the imperative nature of the business models that are used by different organizations, it would be apt to describe some of the business models.
Aggregator is a business model that has been developed lately. This model is particularly featured for business organizations that are essentially service providers. Such business organization does not sell goods to customer permanently (Vatanparvar & Al Faruque, 2015). Rather he services that are sold by these type of business organizations also are their own in house brand. Revenue is generated in form of commissions. The examples of such organizations are Uber, OLA, OYO etc.
Franchise is not exactly a business model but a type of business. In this particular concept there are no fresh business model that are developed (Lee et al., 2016). The business undertakers reuse the already established ideas and ideologies. Of course the new undertakers pay royalties to the business by keeping the theme, menu, food quality even advertisement and promotion exactly same. For example, Dominoes, Pizza Hut.
It is again another business model that has developed at recent times. This particular business model focuses on marketing and sales both on offline and online portals. The business is thus more flexible and the customers gets access to both online and offline stores of a particular company. This particular model is adapted in almost all the business organizations, especially in apparel companies.
This business model is adapted by business organizations that are new in the market or want to attract many customers (Cao, 2014). This model aims at keeping the prices of products and services comparatively low than other existing companies. For example, cheap airfares
This is one of the newly innovated business models where certain services and products are given out for free to the customers. However, in order to access premium or executive services these companies chare a premium interest from customers (Van, Podoynitsyna & Langerak, 2017). The free services are the basic services that are free of restrictions. For example, Zomato, Saavn etc.
Disruption in critical term means destroying an established traditional thought in order to reconstruct something new and innovative. With the advent of computer and modern technology it has become imperative o discard the old business process and to modify the existing models. If that is not done then business organizations would be laid back in the competition. For example, hotel business is now a day’s totally online (Rhodes, 2016). Tourists seldom books hotel after visiting a place. All the processes are done prior. A suiting example of disruptive model can be given in the case of eBay and Myer. eBay partnered with Myer in order to bring in he concept of virtual reality store and launched the same. In order to access the store and shop, tehe customers just simply needs to install the app on their respective mobile phones which then needs to be attached to a pair of shopticles and the customers then would be ready to shop over phone. The most interesting feature of this particular feature is that the customers would be able to experience shopping in 3D features. Thus it can be seen that while on one hand the technology is disrupting the notion of online shopping, on other hand, it is also disrupting the ways customers buys garments online. However, this disruption is causing a phenomenal change in the notion of online shopping among customers and there is a complete different way in which the customers perceive engagement with brands.
Disruption in business can be achieved through staying focused, innovative and collaborating with technological advancements and analyzing the ways it can be implemented in the present business structure.
Volvo does not follow a single business model but a combination of two business models. The business models that it follows are Manufacture and Distributor. Volvo manufactures its own engines, valves, hardware and spare parts. It also distributes the same for domestic and commercial purposes. For commercial purposes the company exports engines for marine purposes and also export to other brands like it exports engines for Renault trucks. Apart from that Volvo also exports engines for boats used for commercial purposes. Manufacture model is self-explanatory. Since the company has its own trucks, cars, buses etc all the parts are made and sold by the same. The business model canvas of Volvo is charted out for better understanding.
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Key Partners · Companies manufacturing parts and components · Companies dealing with technology developing · EPC companies · Suppliers · Network of distribution |
Key Activities · Firms of financial services · Supports and services · Sales and marketing · Designing and engineering · Production of goods · Manufacturing of goods |
Value Proposition · Value propositions is with held in its transportation business · The spare parts and other components are of high quality · Manufacturing taking contract from other companies |
Customer Relationships · Creating brand awareness · Innovating products · Building trust · Modification of the existing and old products · Customer service |
Customer Segments · EPC companies · Dealing with customers like giant industrialists and municipalities · Industries that are concerned with manufacturing equipments · In core sector industries, plants and buildings · Car making industries |
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Key Resources · Innovations are open to all · Excellent network · Brand image · There are total of 18 countries where the production facilities are available · More than in 190 countries the products and components of Volvo company are sold. · The property is intellectual · Latest technology is used in production · The teams in the company are always innovative, curious and open minded |
Channels · There are a number of dealers · Social media plays a huge role · The company has its own websites that approaches many at a time · Volvo museum · Well scattered service centers |
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Cost Structure · Technology · Taxes to government and intercity and interstate taxes · Customs · Employee wages · Production costs · Buying of raw materials · Implementing software · Parts · Components · Facilities · Fabrics and paints · Assembling of the products · Transporting the products · Packing the products |
Revenue Streams · Rental sources · Licensing process · Financing the company and insurance · Components · Services related to technical default · Sale of the products like buses, cars, trucks, engines, construction components |
Business model canvas
Source: Created by author
Reference List
Chambers, I., & Humble, J. (2017). Plan for the planet: a business plan for a sustainable world. Routledge.
McKenzie, David. “Identifying and spurring high-growth entrepreneurship: experimental evidence from a business plan competition.” American Economic Review 107.8 (2017): 2278-2307.
Vatanparvar, K., & Al Faruque, M. A. (2015). Design space exploration for the profitability of a rule-based aggregator business model within a residential microgrid. IEEE Transactions on Smart Grid, 6(3), 1167-1175.
Lee, C. K. H., Choy, K. L., Ho, G. T., & Lin, C. (2016). A cloud?based responsive replenishment system in a franchise business model using a fuzzy logic approach. Expert Systems, 33(1), 14-29.
Cao, L. (2014). Business model transformation in moving to a cross-channel retail strategy: A case study. International Journal of Electronic Commerce, 18(4), 69-96.
Van Angeren, J., Podoynitsyna, K., & Langerak, F. (2017). Proceed with Caution: Analyzing the Performance of Freemium Business Models in the Apple App Store. In Academy of Management Proceedings (Vol. 2017, No. 1, p. 13593). Briarcliff Manor, NY 10510: Academy of Management.
Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the disruption of corporate sovereignty. Organization Studies, 37(10), 1501-1518.
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