BUSINESS MODEL
NINE ELEMENTS TO SATISFY VALUES TO
CUSTOMERS
Many companies in the markets aim to
reach the stage of total control and increase their acquisition of the target
market - market share. To achieve this leading position, international companies
better analyze and develop what is known as a business model. The business
model is an important management tool in tracking the way the company works, in
order to create the desired added value. By tracking nine key elements,
entrepreneurs and business responsible can achieve that value in an integrated
way, making the mark difference in competition. To understand this method well,
it also plays its role in amplifying the company's profits, understanding the
locations of shortcomings and leaks, so that the necessary actions and measures
are taken. In this regard, EXCPR CO. - Consulting and Business Management based
in Kuwait - has launched this model in the business, in its role towards the
business community. The company summarized the most important model procedure,
which in turn will shorten many years of work, and the loss of capital invested
on companies, thus achieving more successes. The importance of the business
model goes beyond SME, and is at the heart of the business of large companies
for continuous development, which has become a necessity to stay in the
markets. Moreover, this importance goes beyond that to reach the board members
of companies, and the company's new executive management, in order to
understand the way the company works and competes, proactively and
professionally. The BM is therefore one of the main maps on which senior
management relies to understand the company's business generalities. Here is a
general aspect of the nine elements of the BM:
VALUE PROPOSITIONS
The first element in the BM
investigates the reasons why the customer segment will eventually make the
purchase of the company's products, unlike other competing companies. This
section also supports the analysis of the additions that the product or service
provided will achieve, in order to solve the problems experienced by customers
or those other additions provided. Therefore, this part of the project
addresses the themes of additions and values that the product will achieve for
customers. Examples of these values are realized, new additions, lower prices,
speed, high quality, high efficiency, business clearance, ease of use, near
distance, new design, etc.
CUSTOMER SEGMENTS
The world's leading companies divide
the overall market into small groups, sharing similar desires and needs. These
companies select one of these segments, and design the product or service on
the basis of them. This requires that the selected micro-market be commensurate
with its continued growth, which will help the company compete. The importance
of segmenting the market into small parts is that it will reduce the number of
competing companies in the business sector, thereby achieving the concept of
scarcity in the economy, thereby achieving more positive results for the
company in the long run. On the other hand, the company is required to expand
its regional orbit to operate in different countries and continents of the
world, thereby pursuing a policy of specialization in the labor sector. In
addition, the management of the company has to develop the reasons why the
selection of that segment of the overall market is very important, and to
explain it. In this part of the BM it should be emphasized that this does not
mean that the products provided are not sold to the rest of the market, but are
intended to target a specific segment of the market in order to maintain
production sources and achieve more expected sales. Companies can simulate the
behavior of these customers, and respond quickly and continuously.
CHANNELS
The third element of the BM is based on the channels that will be relied upon
to communicate with customers, in order to achieve the value promised by the
product. By selecting the best channels of communication with the target
segment of customers, the company will be able to educate customers about the
product provided, give customers the opportunity to experience and test the
product before the process of continuous accreditation and purchase, complete
the methods and process of purchase, deliver the product to customers, as well as
support customers after the purchase. Optimal communication channels depend on
the way customers and customers want to communicate with them, which will play
a major role in increasing the company's revenue and reducing costs. The
company can also communicate directly with the target customer segment, or deal
with a third party to achieve this, and the two previous methods can be
combined – which is the best. When selecting channels of communication with
customers, high-impact, cost-effective channels are required, as well as
tracking the modus operandi of competitors.
CUSTOMER RELATIONSHIPS
The cost of maintaining customers is
much lower than searching and getting more. The leading companies have
understood this equation and are developing their customer service, in order to
stay competitive in the long run. Therefore, the fourth element of the BM is
the topic of customer interest, which includes the type of relationship that
customers expect from the company after the purchase, in order to maintain it to
make profits. The first stages of the relationship begin with customers while
they are in the company's stores, and provide the necessary support when
choosing the goods. It may go beyond after-sales and personal communication
with them about the product and service provided. Companies in the United
States are characterized by this type of service, in which most hospitals and
medical clinics are performed the day after the patient's visit. Some other
business sectors rely heavily on customer communication services for their
permanent customers or B2B, which will limit the success of the company's
business when maintained. Today, as we experience a period of spread and spread
of the CORONA virus epidemic, companies may be able to reach out to the public
market and society, with the aim of achieving the health and safety values they
are looking for. Major international companies are seeking to satisfy their
customers and record their feedback and comments about the products offered, in
order to encourage the rest of the market to buy the product, and social media
platforms are perhaps one of those methods used. The principle of customer
relationship is based on the formation of personal relationships with
customers, continuous communication with them, as well as gaining their trust.
REVENUE STREAMS
The company's revenue sits as the
main driver of cash flows and business continuity. The company and its
executive management should determine the sale prices of the products and
services provided, so that they are accessible to customers' purchasing power.
Companies rely on setting the selling prices of the product, by assessing the
value added that the product will bring to customers, so if the value the
product will achieve is much greater than the sale price of the product,
customers will gladly purchase the product. If the price of the product is
greater than the value that the product will bring to customers, the company
will be forced to sell the product to customers, which in turn will suffer –
which requires it to either lower the price of the product or raise the moral
value achieved for it. In this cash flow process, companies also rely on two
main methods, the first being through the one-time sale of the product, which
is usually relatively expensive. The second method is for the company to rely
on the continued customer's demand for the service provided, in this case the
cost of the product is low, to encourage customers to purchase. There are also
many ways in which companies collect revenues according to the concept of
economic scarcity in different business sectors, including through the sale of
assets directly, the demand for usage fees, subscription to the service
provided, collection of rents for benefit assets for a specified period, broker
and successful sale and purchase, advertising and advertising products and
services.
KEY RESOURCES
Part six of the BM is concerned with
providing all the resources and assets needed to operate the business according
to the needs adopted in the previous parts of this model. By selecting the
appropriate sources of work that may be in the form of financing sources,
buildings, machinery and equipment, raw materials, knowledge, in addition to
human resources, the company will be able to form and deliver value added to the
target customers, reach the target market, manage good relations with
customers, and generate revenue.
KEY ACTIVITIES
This aspect of the BM discusses the
most important tasks and businesses that the company's management has to work
on a daily basis, to achieve integration in the parts of this model, in order
to achieve the desired added value for customers.
KEY PARTNERSHIPS
The partners are intended for all
entities and individuals that deal and cooperate with the company in order to
achieve the desired added value of the product or service provided at the end
of the day. The ongoing market competition process is based on the realization
of the principle of partnership between different institutions and even with
competitors in achieving added value. Therefore, it is not possible for the
company to take over all the resources or business it needs, but it requires
fruitful cooperation in order to achieve the mutual benefits of all parties.
There are many types of partnerships that companies rely on, for example, to
reduce operating expenses by obtaining optimal solutions, or reducing risk in
collaboration with competing companies.
COST STRUCTURE
The ninth and final element of the
BM deals with the most important expenses and payments required to carry out
the company's work towards achieving the desired added value. Because of this
harmony between the parts of the business model, it requires a company to have
a good balance of financial resources to guide it towards the success of the
business. Once the required production sources have been identified, in
addition to the most important works, the company's executive management can
calculate the financial budget needed to operate the business to the fullest.
Finally, it is noted through the study and analysis of the nine elements in the
BM, as an integrated and largely interrelated process, through which some of
these axes address the shortcomings and problems in the company's business.
Thus, the BM is an ongoing dynamic process aimed at selecting and taking the
best actions and ways to achieve the benefit for which the company has existed.
In addition, in order to achieve the highest value (emotion) and efficiency
(logic) in the business, the management of the company must compare the modus
operandi it is currently pursuing, in relation to the standard situation
adopted, in order to narrow the size of the gap and take corrective action on
its impact. On the other hand, the current CORONA virus crisis may
imposed on companies and business owners to adjust the BM, especially as the
world's commercial power is expected to be redistributed. Companies should
therefore re-examine their projects to suit the pace of the next phase, and not
to exit the markets.
Business
sustainability
P.O.
BOX 21407 – Safat 13075 Kuwait
Tel:
+965 600-39277
Fax:
+965 224-78734
