DIFFERENT COMPONENTS OF A BUSINESS MODEL
The Challenges differ from industry to industry, but let's discuss about some seven basic components of business model:
Reaching Customers:
It's a proverb "Built a better mousetrap, and the world will beat a path to your door." The reality is that even if you did, no one would find you. Even when you know who your prospects are, it's usually difficult and costly to reach them. You have to find them via the internet and email or the old fashioned way-through broadcast media,print ads, direct mail, telemarketing or references or by cold-calling. And these potential customers are not likely to be waiting to hear from you and may not respond to you. So be sure you know how you are going to find and reach them.
Differentiating Your Product:
You think you have got the very best solution, but so does the other girl (or guy). There's always competition, whether you realize it or not. Smart marketing executives know how to develop unique product-positioning strategies that highlight a product's true value. You need to thoroughly understand the competition and effectively communicate the unique advantages of your product.
Pricing:
One of the most basic decisions you have to make is how much you're going to change for your product or services. Giving your stuff away is the way to go on the web, but remember that you still need to figure out how you are eventually going to make money-you can't make it up on volume. Start by understanding how much customer's value what they're gaining from you. Then you need to estimate your total costs, analyze the competitive landscape, and map out your long-term strategy. For your company to survive, your product's price must be greater that its overall cost.
Selling:
Persuading customers to buy a product that they need is one of the most important skill an entrepreneur must learn. You're going to be selling at every juncture. So you have to understand what it takes to close a deal and put together the necessary sales process. And this process has to be perfectly conceived. Be sure you test your selling strategy.
Delivery/Distribution:
This is easy on the Internet. But for big-ticket items, you usually require a direct sales force, for mid-range products, distributors or value-added resellers and for low-priced items, retail outlets or the internet. It's different in every industry and for every type of product, but you have to get this right. Your products needs to be designed and packaged for the channel through which they will be distributed to customers.
Supporting Customers:
In addition to teaching customers how to use your product, you need to ensure that you can deal with defects and returns, answer product questions and listen to and incorporate valuable suggestions for improvement. You may need to provide consulting services to help customers integrate and implement your products. If your product is critical component of a business, you may also need to provide 24/7 onsite or web support.
Achieving Customer Satisfaction
The Ultimate success or failure of a business depends on how much it helps customers achieve their objectives. happy customers will become your best sales people and buy more from you. unhappy customers will become your biggest liability.
In Case if you don't know:
Function of a Business Model:-
1. To articulate the value proposition
2.To identify a market segment
3.To define the structure of the firm's value chain
4.To specify the revenue generation mechanism
5.To describe the position of the firm within the value network
6.To formulate the competitive Strategy
(Note: This definitions and statements were taken from different sources on web, they are of their respective owners) :)
The Challenges differ from industry to industry, but let's discuss about some seven basic components of business model:
Reaching Customers:
It's a proverb "Built a better mousetrap, and the world will beat a path to your door." The reality is that even if you did, no one would find you. Even when you know who your prospects are, it's usually difficult and costly to reach them. You have to find them via the internet and email or the old fashioned way-through broadcast media,print ads, direct mail, telemarketing or references or by cold-calling. And these potential customers are not likely to be waiting to hear from you and may not respond to you. So be sure you know how you are going to find and reach them.
Differentiating Your Product:
You think you have got the very best solution, but so does the other girl (or guy). There's always competition, whether you realize it or not. Smart marketing executives know how to develop unique product-positioning strategies that highlight a product's true value. You need to thoroughly understand the competition and effectively communicate the unique advantages of your product.
Pricing:
One of the most basic decisions you have to make is how much you're going to change for your product or services. Giving your stuff away is the way to go on the web, but remember that you still need to figure out how you are eventually going to make money-you can't make it up on volume. Start by understanding how much customer's value what they're gaining from you. Then you need to estimate your total costs, analyze the competitive landscape, and map out your long-term strategy. For your company to survive, your product's price must be greater that its overall cost.
Selling:
Persuading customers to buy a product that they need is one of the most important skill an entrepreneur must learn. You're going to be selling at every juncture. So you have to understand what it takes to close a deal and put together the necessary sales process. And this process has to be perfectly conceived. Be sure you test your selling strategy.
Delivery/Distribution:
This is easy on the Internet. But for big-ticket items, you usually require a direct sales force, for mid-range products, distributors or value-added resellers and for low-priced items, retail outlets or the internet. It's different in every industry and for every type of product, but you have to get this right. Your products needs to be designed and packaged for the channel through which they will be distributed to customers.
Supporting Customers:
In addition to teaching customers how to use your product, you need to ensure that you can deal with defects and returns, answer product questions and listen to and incorporate valuable suggestions for improvement. You may need to provide consulting services to help customers integrate and implement your products. If your product is critical component of a business, you may also need to provide 24/7 onsite or web support.
Achieving Customer Satisfaction
The Ultimate success or failure of a business depends on how much it helps customers achieve their objectives. happy customers will become your best sales people and buy more from you. unhappy customers will become your biggest liability.
In Case if you don't know:
Function of a Business Model:-
1. To articulate the value proposition
2.To identify a market segment
3.To define the structure of the firm's value chain
4.To specify the revenue generation mechanism
5.To describe the position of the firm within the value network
6.To formulate the competitive Strategy
(Note: This definitions and statements were taken from different sources on web, they are of their respective owners) :)
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