Business Strategy Là Gì – Understanding the problem you are solving for a customer is arguably the biggest challenge you will face when starting a business. What do customers need, want and do the products you sell fulfill their needs? However, ensuring that your product is in line with market tastes is only one aspect of successfully starting a business. Another important point is how you can monetize and profit from the product you are selling. This is all that is required for a business model – a business model. So what is the business model? Let’s go deep with Ha Linh to find out!
What is the business model? A fairly abstract economic term that is widely used today. As a phrase in English, it is the perfect translation of a business model.
Business Strategy Là Gì
A business model or business model is a description of how your business will make money. This is an explanation of how to provide value to your customers at a reasonable cost. In other words, a business model is a company’s plan to make a profit. It identifies the products and services the business will sell, the target market the business will target, and determines the estimated costs.
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Many studies show that business model is a widely used concept with the advent of personal computers and abacus. These tools allow entrepreneurs to continuously test models in different ways to plan their costs and revenue streams. Spreadsheets allow entrepreneurs to make quick, hypothetical changes to their business model and immediately see how that change could affect their business now and in the future.
A business model in its simplest form can be divided into three parts:
1. Everything needed to make a product: design, raw materials, production lines, labor,…
2. Everything needed to sell the product: marketing, distribution channels, service delivery and sales management, …
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3. Everything needed to attract customers: pricing methods, payment methods, payment periods, advertising, incentive schemes, …
As you can see, what is the business model? This is simply a cost review so you can determine the best price for your product or service to generate revenue for your business. A successful business model only requires collecting more money from customers than it costs to produce the product. This is the easiest way to calculate profit.
New business models can fix and improve any of the above three factors. Perhaps the cost of design and production can be reduced. Or perhaps more effective sales and marketing strategies can be found. Or maybe you can come up with a creative way for customers to pay. However, keep in mind that you don’t need to come up with a new business model to have an effective strategy. Instead, you can take an existing business model and offer it to different customers.
A new company in the development process must have its own business model. If the business model is purely for investment purposes, help it attract sales people and talent, improve personnel management. On the contrary, companies that have been operating for a long time must review and update their business model regularly, because they cannot predict future developments and challenges. For investors, they need to test and evaluate the business models of the companies they invest in.
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What is the working mechanism of the business model? A business model is a high-level plan for the profitable operation of a particular company in a particular market. One of the main components of the business model is the valuation. It is an explanation of the product or service that a company offers and why they want their customers to use the product or service by offering ways to differentiate or compare the product to competitors.
The business model for a new business also includes expected start-up and financing costs, customer goals for the business, marketing strategy, competitive assessment, cost of revenue and cost estimates. What are the common mistakes in creating a business model? This means minimizing the cost of financing a business until it becomes profitable. It is not enough to count product supply costs. A business should be in business until its revenues exceed its costs.
A business model can also identify partnership opportunities with other established companies. A good example would be an advertising agency using a referral scheme from a print shop.
What are the components of the business model? The business model is the bridge between technical inputs and economic outputs. To fulfill this role, the business model needs to combine 4 main elements including infrastructure, products, customers and finance. Here, let’s analyze these factors in detail with Ha Linh!
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The operational area is related to the infrastructure component, which includes 3 components as follows:
Primary resources: roughly the ability of companies to provide goods and services. In almost any field, companies must have the ability to deliver products to succeed. It is also a factor that acts as a competitive advantage for companies in the market.
Network of business partners: There are other companies that cooperate with the company. Why is cooperation needed in business? To support, provide and share resources or resources for each other, to create new competitive advantages.
Key activities: Companies must perform key activities in the implementation of the business model. This activity can be carried out by the company itself or through other cooperation channels.
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As mentioned at the beginning, the business model has a special element which is the value assessment. Recognize the best that customers can get from the company. In a smart way, companies get customers to use products and services. This statement describes the value of specific product packages for each customer group.
The customer domain is an important part of the business model. It contains the following elements:
Target customer group: A group of potential customers that a company always focuses on. This group of customers is the lifeblood of the company. The business model must have a clear plan to demonstrate its priorities and concerns