Strategic Management- Reinventing Business Model - Coursework Example

Strategic Management- work Assessment Table of Contents Introduction 3 Summary of the Company 3 Review of “Reinventing Your Business Model” 4 Rationale for the Selection 7 Outline for Each Business Organisation 7 Evaluation of Business Model 13 Conclusion 14 References 15 Introduction The success of every business organisation largely depends on its proper strategic planning and structural design. The implementation of effective business model along with other variables acts as strong determinants for the success of organisations in the current volatile business environment. Business model is a plan, which assists business organisations to survive in the highly competitive environment, keeping in view its resources, structural aspects, customer interfaces and profitability. It helps the business to create value and increase its sustainability in the long run effectively. In other words, it can be stated that business model helps in recognising the fundamental changes for innovation and deliver value to the people. Different business organisations implement business model to analyse the industry competitiveness and satisfy the stakeholders. In this essay three organisation have been taken into consideration in order to analyse their business models, which includes Google, Facebook and Samsung (Loewe, 2009). Summary of the Company Google is a United States based leading multinational corporations, providing internet-based services across the globe. It is a leading search engine used by the people for rapid development and for enhancing the productivity. Google uses a strong business model for its smooth functioning driven with the objective of becoming one of the prominent sources of information for the people. The motive of the business model is to penetrate into the market with a strong growth rate for continuous revenue (Google, 2014). Facebook is another well-known social networking company, which is intended to increase the level of communication amid the people across the globe. The services provided by the social networking site include personal communication and promotional services. The business model of Facebook is to create ‘Multi-sided Platform’ in order to serve different customer segments (Facebook, 2014). On the contrary, Samsung is a leading brand providing various products and services to the people as per the market requirements. This is possible with help of the business model implemented by the company in order to increase the efficiency of the people (Samsung, 2014). Review of “Reinventing Your Business Model” Contextually, business model involves every aspect of a company’s approach in order to develop profitability and ensure delivering quality services to the customer for greater effectiveness in the long run. The objective for the implementation of the business model is to serve various segments of customers in order to provide value and cost to the business with innovation and technological advancement. According to the article of Johnson & et. al., (2008), it is observed that a strong business model helps to transform company into prosperous one and make it a success in the long run. It is reflected that an effective business model delivers high profits and helps in fulfilling the changing behavioural needs of the people. The article identifies that business models helps to reshape an organisation for a spectacular growth in the ever-changing environment. The implementation of business model is still an innovative concept for few of the organisations as they feel that the implementation of the same might hamper their performance. The lack of business model affects organisational performance, as the managers are not able to evaluate the changing needs of customer. However, it is also observed that organisations might need to adopt new and innovative business model where the conventional model is unable to meet the requirement. In this context, Apple is one of the best examples as articulated in the article. Reinvesting in new business model is another important aspect, which requires proper analysis of the current business model. In this regard, it is stated that for the success of a business model various components are to be considered. As per the business model suggested in the article it is stated that the model is divided into four aspects such as Customer Value Proposition (CVP), profit formula, key resources and key processes. CVP is one of the most significant aspects, which need to be considered by the business organisation in order to gain success and profitability by creating value to the customer. CVP helps in providing success by delivering value to the customer and satisfying their job roles. The problem solving ability is an important consideration of the model with respect to the customer. In other words, the model is considered to be effective if it is able to access the needs of the people and other dimensions so that the company is able to design and frame strategies accordingly to make the customer satisfied (Osterwalder & Pigneur, 2013). The profit formula is vital for the model to evaluate the cost and revenue of the organisation with regards to the customer. Profit can be derived with the use of either revenue model or margin model along with cost structure. Moreover, key resources and key process are also crucial aspects that are considered with the help of the business model in order to create and deliver value to increase the sales of the company. Furthermore, Johnson & et. al., (2008), through the use of flow chart stated that CVP acts as a fundamental role leading to the design of a profit formula, where, key resources along with processes are observed as factors contributing to customer satisfaction and greater market share. The article articulates that for the success of any business model it is important to consider customer value. The main objective of every business is to satisfy the need of the customer by providing them with value so that the company is able to survive in the long run. In this regard, it is noted that a strong business model helps in transforming the organisation and make it feasible in the rapid changing environment (Johnson & et. al., 2008) Contextually, business model innovations are crucial for an organisation’s success or failure in the long run. As per the review, it is noted that business model innovation is turning out to be a critical process, because in today’s environment innovation simply does not suffice the need of the people and leads to the success of the organisation. The business model is basically linked with the innovation and technological advancement on constant basis. It is apprehended that business model helps in creating an organised and dynamic understanding as can be witnessed by citing the success story of Mr. Ratan Tata. Moreover, it is reviewed that the need for the business model can be realised when the business is not being able to deal with the customer problems and are unable to satisfy their needs with the changing environment (Johnson & et. al., 2008) Additionally, the review states that business models assist the organisations to set new norms based on financial, operational, as well as other aspects in order to deliver value to the people and human resources associated with organisation. The review explores in dialectical manner the business model concept for the success in the long run. It emphasises on the fact that creation of the business model is not majorly related to only one specific product but is often dynamic and modifiable (Johnson & et. al., 2008). Rationale for the Selection As stated above, business model is an important consideration for every organisation of different sectors. Every organisation is different in terms of its functioning but the main objective of the business is to serve their customer and provide value to them so that they are able to sustain in the market in the long run and gain the competitive edge. In this context, Google, Facebook and Samsung are from different industrial background but the motive of every organisation is to attain success. The reason for analysing these companies is that it use different business model keeping in view the business objective. Google’s business model serves both, Business-to-Consumer (B2C) and Business-to-Business (B2B) in order to sustain in the market for the long run. Moreover, Facebook and Samsung also use the business model keeping in view B2C and B2B at large. The rationale for selecting these organisations is that all the three organisations although identifies itself to different industrial settings but the model used is the same. In this regard, it can be stated that Google acts as a search engine for both the business and customer and provides information to the end users. Face book is used as promotional tool and acts as a strategic planning tool. Moreover, Samsung use the business model for enhancing the product innovation and meeting the customer needs. Hence, it can be stated that through the implementation of proper business model strategic planning can be considered as per the requirement of the business (Kaiser, 2008). Outline for Each Business Organisation Every business follows a strong business model so that they can facilitate the purpose and meet the business objective, which is to satisfy the customer and enhance profitability in the competitive market. Google uses its own business model to accumulate incentive and meet the core business purpose at large. The business model has various strengths and weaknesses, but the major aspect is that it offers growth and brings stability for Google Corporation in the global perspective. As stated earlier, Google is the leading search engine, which increases its need for an effective business model. The business model is useful for Google not only to implement proper planning but also for effective structure. The company assists the users of internet to acquire the required information by assessing the search engine. Moreover, Google upholds several websites along with the Google products such as Gmail effectively. This is possible due to the effective business model used by Google. The main objective of the business is to provide information throughout with an ease and make Google the most dominant search engine. The business model is useful in creating value, services, and quality development for the organisation. Google serves millions of people throughout the globe and meet their requirement with the various websites and tools. Every department of the organisation works for the long-term sustainability with the assistance of the of the business model. Google acts as an advertisement site for their business clients and acts as a source of information for the customer. In order to increase the market base and profitability a new business model has been implemented by Google to enhance their profit by 50% within 2017. The revenue will not be gained only through advertisements but by providing new value to the customer and by serving both B2B and B2C purpose (Sinfield & et. al., 2011). The Google business model has been depicted below. Google Business Model Source: (Slide Share, 2013) The business model serves the need of the corporation by taking into consideration the partners perspective, customers and the other related stakeholders. The aim of the model is to create a value proposition for the every possible segment of the customers. The business model used by Google is implemented to meet the growing needs of the business partners and the customers. The model is useful, as it not only offers a platform to the people to advertise their products but also keep them well informed by providing information. However, it can be stated that the Google Business Model stands on advertisement and for creating value to the customers. On the other hand, Facebook is a social networking site that is popular among the people as it helps them to highlight and promote their talent. The objective of Facebook is to stay connected with every member globally. People use the social site for the purpose of promotion as well as to express their feelings. The aim of the business is to satisfy the stakeholders and provide value to the customer. The Facebook business model mainly focuses on B2C model so that the customer needs are taken into consideration, which is the core competency area. The business follows a prudent structure and standard by meeting the changing needs of the customer. The business model of Facebook is proving to be effective as the stocks are showing high points with strong market presence. The effectiveness of Facebook business model can be clearly understood by considering the large numbers of users than any other social networking sites. The model addressed the problems of the web-based company by efficiently handling membership along with traffic. Due to the strong business model, Facebook has been able to attain ‘economies of scale’ and ‘economies of networking’. Additionally, the model has further enabled the organisation to overcome the issue of ‘monetization of membership’ along with traffic. This resulted in exceeding the revenue by US$2.02 billion in a third quarter in the year 2013 (Forbes.com LLC, 2014). In this regard, the business model can be stated as effective for the business operation and for meeting the expectation of the stakeholders. It is also stated that the Facebook business model targets advertisements more effectively by placing it in the social sites. Facebook Business Model Source: (Facebook, 2014) The business model of Facebook illustrated above is effective, as it takes into consideration the structure, offers value to the customers and safeguards finances for the stakeholders’ perspective. Therefore, it is predefined that the business model used by the social networking site is brilliant as it is able to meet the changing requirements of the customers. The model helps in increasing the revenue by providing value to general customers and also helps in promotion for business representatives. Thus, it can be ascertained that business model lead to the success of an organisation as it helps in assessing the future along with the changing needs of the environment to sustain in the competitive environment. The model considers the profit formula, which is the main objective of every business. The revenue generated by the organisation as discussed above is majorly through promotion and advertisement due to the implementation of effective business model (Facebook, 2014). It can be observed from the above discussion that business models used by the two different organisations namely Google and Facebook have been successful enough to deliver desired outcomes in terms of attaining and retaining customers in the long run through the use of effective strategic planning. Similarly, Samsung Corporation has also adopted B2C business model to cater the requirements of its diverse customers spread globally. Samsung is multinational company, which focuses on innovation of products and services to meet the growing demand of the customers. The business model adopted by Samsung is perceived to be useful in taking the world into a new direction because of the innovation strategies. The company has its operations in various fronts such as mobile, electronics, and finances. The objective of the business is to provide value to the customer by providing innovative products. The business model used by Samsung focuses upon the four main dimensions of marketing, operation, corporate development and strategy (Samsung, 2014). The Samsung business model focuses on various aspects such as products, employee management, value creation aspects, and channels to meet the demand of the customer and penetrate deep into the market. The Samsung business model Canvas is depicted below in order to increase the sustainability of the organisation in the global platform. Samsung Business Model Canvas Source: (2Slide Share, 2013). From the business model of Samsung illustrated above, it can be stated that the organisation focuses on various aspects for its success, which helps it in becoming one of the leading business organisation in the market. The objective of business is to satisfy the stakeholders by generating revenue. In this regard, the Samsung business model helps in evaluating the changing needs of the customers to gain a competitive edge over the others by taking into consideration the innovation strategy. Product innovation is the fundamental to the model related to Samsung to sustain in the global market and to meet the B2C requirements (Samsung, 2013). Thus, from the above analysis it is clear that every organisation needs a business model for its success. Moreover, the business model also requires to reinvest for incorporating changes in its existing model and to add value to the organisation, alongside offer CVP, Profit formula and key resources (Chen-Burger & Robertson, 2006). Evaluation of Business Model Business model is designed by the organisation in order to use the resources effectively and deliver value to the consumers. This will help the organisation to gain more profitability and enhance its growth prospective. The purpose of the business model is to bring about few common understanding amid the stakeholders along with the organisation so that the process is smooth. The business model considers few important aspects such as customer needs, offerings, infrastructure, and financial visibility. Business model helps in segmenting customer and their need for the business so that they can strategize their plans effectively. The model considers the aspect of distribution channels to build relationship along with creating value proposition for the customers related. Business model is an important consideration for organisations as it provides a growth opportunity and sustainability in the long run. Business model helps in promoting products and services to push and pull the demand as per the organisational need at large. The supply chain, research and development team are also organised efficiently due to the usage of business model (Kubzansky, 2012). Business model creates various entry strategies and modes for value creation by segmenting the customer and their needs. The business model applicability in an organisation leads to proper funding and resource management for the sustainability and growth of the organisation. In this regard, the best example that can be cited is of Apple. The organisation adopted B2C business model and enhanced value to the customers along with profitability to satisfy the need of the corporate and the stakeholders at large. The evaluation of the model reflects the fact that model assisted the organisation in meeting and serving the customer by innovating and promoting the strategies, enhancing the distribution channels and performing the operational tasks of the business effectively and efficiently. Managing of the resources and generating profit for the business is one of the important fundamentals of the business model (Engdahl & Rensfelt, 2011; Harvard Business Review Paperback Series, 2010). Conclusion Every business organisation strives for success and hence requires proper strategic management planning. Business model is of significance as it takes into consideration the structure and assesses the needs of the customer at large. Business model is implemented by organisations to meet the needs of the customers and the stakeholder in the long run. Creating value, profit and key resources are the primary aims of the model for the success in the global platform. The motive of the model is to serve the people following B2B and B2C channels. As observed the three companies from different dimensions follow an effective business model in order generates revenues and sustain in the global market. Thus, business model is an important concept, which assists the organisation to strive long in an efficient manner by meeting the global demand and stakeholder requirements for a sustainable business. References Chen-Burger, Y.H. & Robertson, D., 2006. Automating Business Modelling: A Guide to Using Logic to Represent Informal Methods and Support Reasoning. Springer Science & Business Media. Engdahl, F. & Rensfelt, J., 2011. Business Model Evaluation and Generation System. Department of Production Management, pp. 1-76. 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