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    Inbound 1966383946309230579

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    A business model identifies the products or services a company will sell, its target market, and anticipated expenses. It allows entrepreneurs to attract investment, recruit talent, motivate staff, anticipate challenges, and update business plans. A business model outlines a plan for profitably operating in a specific market by defining a value proposition that differentiates products or services from competitors. Key components of a business model include market analysis, target customers, marketing strategy, competition review, and revenue and expense projections. Business models can be measured through pricing and costs, with gross profit suggesting a sound model.

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    Inbound 1966383946309230579

    Uploaded by

    Josh
    26 views35 pages
    A business model identifies the products or services a company will sell, its target market, and anticipated expenses. It allows entrepreneurs to attract investment, recruit talent, motivate staff, anticipate challenges, and update business plans. A business model outlines a plan for profitably operating in a specific market by defining a value proposition that differentiates products or services from competitors. Key components of a business model include market analysis, target customers, marketing strategy, competition review, and revenue and expense projections. Business models can be measured through pricing and costs, with gross profit suggesting a sound model.

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    A business model identifies the products or services a company will sell, its target market, and anticipated expenses. It allows entrepreneurs to attract investment, recruit talent, motivate staff, anticipate challenges, and update business plans. A business model outlines a plan for profitably operating in a specific market by defining a value proposition that differentiates products or services from competitors. Key components of a business model include market analysis, target customers, marketing strategy, competition review, and revenue and expense projections. Business models can be measured through pricing and costs, with gross profit suggesting a sound model.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    26 views35 pages

    Inbound 1966383946309230579

    Uploaded by

    Josh
    A business model identifies the products or services a company will sell, its target market, and anticipated expenses. It allows entrepreneurs to attract investment, recruit talent, motivate staff, anticipate challenges, and update business plans. A business model outlines a plan for profitably operating in a specific market by defining a value proposition that differentiates products or services from competitors. Key components of a business model include market analysis, target customers, marketing strategy, competition review, and revenue and expense projections. Business models can be measured through pricing and costs, with gross profit suggesting a sound model.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 35

    BUSINESS MODEL

    A business model is a company's plan for making a profit. It


    What Is a Business Model?

    identifies the products or services the business will sell, the


    target market it has identified, and the expenses it anticipates.
    Profit- is a financial benefits that exceeds the cost, expenses,
    and taxes.
    Why Do Entrepreneurs Needs A Business Model
    to attract investment
    to help recruit talent
    to motivate management and staff
    to anticipate trends and challenges ahead
    to update their business plans
    How A Business Model Works
    A business model is a high-level plan for profitably operating a
    particular business in a specific marketplace. A primary component of
    the business model is the value proposition. This is a description of the
    goods or services that a company offers and why they are desirable to
    customers or clients, ideally stated in a way that differentiates the
    product or service from its competitors.
    CONTENT OF BUSINESS MODEL
    A market analysis is a quantitative and qualitative assessment of
    a market. It looks into the size of the market both in volume and in
    value, the various customer segments and buying patterns, the
    competition, and the economic environment in terms of barriers to entry
    and regulation.
    Market Players (Competitors) Any person or entity which is a rival
    against another. In business, a company in the same industry or a similar
    industry which offers a similar product or service. The presence of one
    or more competitors can reduce the prices of goods and services as the
    companies attempt to gain a larger market share.
    COMPOSITION OF BUSINESS MODEL
    projected startup costs
    sources of financing
    target customer
    marketing strategy
    a review of the competition
    projections of revenues and expenses
    7 Steps Recommended in Establishing the Right Business Model

    Size the value of the solution in the target segment. (Cost


    Estimation)
    Confirm that the product or service solves the problem.
    Test the channel and support strategy.
    Talk to industry experts and investors.
    Plan and execute a pilot or local rollout.(Cost, Quality,
    Pricing)
    Focus on collecting customer references.
    TWO WAY OF MEASURING BUSINESS MODEL
    1. pricing
    2. costs
    A company can raise prices, and it can find inventory at reduced
    costs. Both actions increase gross profit. Nevertheless, many analysts
    consider gross profit to be more important in evaluating a business plan.
    A good gross profit suggests a sound business plan. If expenses are out
    of control, the management could be at fault, and the problems are
    correctable. As this suggests, many analysts believe that companies that
    run on the best business models can run themselves.
    Fund Mismanagement
    A common mistake in creating a business model is
    underestimating the costs of funding the business until it becomes
    profitable. Counting costs to the introduction of a product is not
    enough. A company has to keep the business running until
    revenues exceed expenses.
    ADVANTAGE OF BUSINESS MODEL
    A business model may also define opportunities for partnering with other
    established businesses. An example would be an advertising business that could
    benefit from an arrangement for referrals to and from a printing company.
    Through business model entrepreneurs can shape their product policies and
    service implementation.
    Business model will make entrepreneurs in decision making through studies,
    comparison and ideas of different organization.
    Successful businesses have adopted business models that allow them to fulfill
    client needs at a competitive price and a sustainable cost. Over time, many
    businesses revise their business models from time to time to reflect changing
    business environments and market demands.
    DISADVANTAGE OF BUSINESS MODEL
    when business models don't work, it's because the story doesn't make
    sense and/or the numbers just don't add up to profits.
    the business model doesn't tell you everything about a company's
    prospects.
    business models sometimes create confusion due to many ideas and
    opinions.
    business model due to competition is costly.
    TYPES OF BUSINESS MODEL
    Direct sales
    Franchising
    Advertising-Based
    Distributorship
    Internet Retail
    Business Legal Structure

    When deciding to establish a business venture, the first decision you need to make
    relates to the legal structure of the business – in other words, what kind of business are you
    going to legally establish? The basic legal structures include the following.
    Market Players
    There are often a number of different types of company or people playing in any marketplace.
    1. Customers
    Of course the most important organization or people in the market are your customers. This
    includes both current and potential customers.
    Major customers
    It is very common for most sales to be made to a relatively small set of big customers. These
    always need careful attention and may have account/relationship managers assigned to them. A
    problem is that big customers may also demand big discounts and special attention.
    Minor customers
    Minor customers buy less, but nevertheless are useful as in aggregate they may buy quite a lot.
    The only time minor customers are undesirable is when serving them costs more than the profit
    gained from them. This can happen when they are angered or when they try to gain an unfair
    attention for their smaller payment.
    MARKET PLAYERS
    2. Suppliers
    Suppliers may sell directly into the market, for example selling spare parts, but largely they need to be kept
    aligned to your strategy.
    In some markets suppliers also supply your competitors. When supply is short, the supplier may hold a position
    of power in the choice of who to serve.
    You can also have major and minor suppliers. Major suppliers are critical for everyday delivery and a problem
    from them can cause delays or product quality issues.

    3. Complementors
    Complementors are those who sell non-competing products and which generally help your sales. For example
    in a rock musical instrument market, drum and guitar manufacturers are Complementors to one another.
    It is generally a good idea to collaborate closely with Complementors as mutual benefit may be gained. They
    may also seek to work with competitors, which can be a tricky situation -- but if it all adds up to expanding the
    market, then this is beneficial. An alternative strategy, as with suppliers, is that if you can lead the
    Complementors to support you more, then competitors may be weakened.
    MARKET PLAYERS
    4.Competitors
    Competitors are those who have products and services similar to you and where customers who are buying something
    will compare your offerings and prices directly, weighing one up against the other.
    The interaction with competitors is usually directly antagonistic. You seek to convince customers that your offerings
    are better and that competitors' offerings are worse. Nevertheless, there are times when collaborating with competitors is
    helpful, for example in influencing sensible regulations.

    5. Substitutors
    Substitutors are like competitors but their products are not the same. The classic substitution is replacing butter with
    margarine (a battle that is still raging). Other substitutions are more evolutionary, for example where typewriters were
    substituted by word processors.
    Initially, substitutions may be seen as quite different, for example where computers were big and expensive
    alternatives to the typewriter. Yet innovation and evolution continued and computers eventually became cheaper than
    typewriters as well as offering benefits the typewriter could not emulate.
    A critical attribute of a Substitutors group is that they all seek the same 'share of wallet'. Hence, when a person is
    thirsty, all drinks are substitutes for one another.
    MARKET PLAYERS
    6. Regulators
    In any industry, standards are often helpful in many ways, from ensuring product safety to
    helping suppliers create plug-compatible parts that enable economies of scale and hence lower
    product prices.
    Regulation may be driven by collaboration between competitors. Regulations may also be
    created by independent organizations or even governments, whose agendas may not align with
    company profit motives.
    An important part of regulation is policing, without which regulations become only guidelines.
    Sometimes customers do their own policing, for example by not buying non-standard products.
    Regulation may also be done by independent inspectors who can have draconian punitive powers.
    It can be an important part of marketing to demonstrate conformance to regulations. Displaying
    safety badges, showing ecological awards, and so on can help convince customers of the quality of
    the product and the integrity of the firm.
    MARKET PLAYERS
    7. Influencers
    There are also groups and organizations who have no direct control but
    who will seek to promote their own agendas by influencing players within the
    marketplace, including regulators and retailers. These often have an ethical
    basis, for example ecological or animal rights activists.
    Lobby groups who represent certain business interests may also be
    involved, although often indirectly (for example in seeking to persuade
    regulators to create stronger controls).
    Marketers need to be careful with influencers who can create bad publicity
    through demonstrations and leaking information to the press. Influencers can
    be helpful if you listen to them and take their concerns seriously.
    Operations management
    Operations management is the
    administration of business practices
    to create the highest level of
    efficiency possible within an
    organization.
    Strategy is a
    management’s game
    plan.
    Sales are considered as the
    engine of operation.
    A product is an object or system made available
    for consumer use.
    -Tangible object or system made available for
    consumer use and it is anything that can be
    offered to market to satisfy the desire or needs of
    a customer.
    A service is an intangible product
    and it is a transaction where no
    physical goods are transferred from
    seller to buyer.
    Profit is a measure of profitability which is the
    owner's major interest in the income formation
    process of market production.

    Gross Income - other term for gross profit


     The amount your business earns from selling goods or
    services before you subtract taxes and other expenses
    Production- It reacts to what is
    sold today and must meet the
    expectations set by the sales
    team.
    COST
    Fixed Costs -These are expenses that have to
    be paid even if no production takes place.
    Variable Costs- It refer to the expenses that
    depend on the amount of output that is
    produced.
    Competitors-They are very important to the
    success or failure of a new business and they
    make the competition interesting because of
    profit margin and level of service that they
    offer to retailers and with special offers or
    incentives to customers.
    3 TYPES OF COMPETITORS
    A. Type Competitor
    B. General Competitor
    C. Brand Competitor
    Market- The place of exchange of goods
    and services by the buyers and sellers.
    Market Structure-It is best defined as the
    organizational framework and composed of
    other characteristics of a market.
    Types of market structure
    Perfect Competition-A type of market structure which describes a
    market where a large number of small firms compete against each
    other.
    Monopoly-It refers to a market structure where a single firm controls
    the entire market. In this scenario, the firm has the highest level of
    market power, as consumers do not have any alternatives.
    Oligopoly
    Monopolistic
    Market Survey-To start a business, it
    is the first thing to do by means of
    finding out what is the demand for the
    product and analyzing the market
    environment.
    Market Value- The amount of money
    spent on the product. It is also known as
    the amount for which something can be
    sold on a given market.
    Market Size- It is defined as the number
    of individuals in certain market segment
    who are potential buyers.

    THANK YOU…

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