- What definition of business model do you find most useful and why?
- Both definitions of a business model include increasing value to your company, which in my opinion is one of the most fundamental points in a business in order for it to be successful. The first definition, “A business model is a description of how your company intends to create value in the marketplace. It includes that unique combination of products, services, image, and distribution that your company carries forward. It also includes the underlying organization of people, and the operational infrastructure that they use to accomplish their work.” is much more specific and includes all the major parts of a business that have a big impact on the customer. I agree that a business’ “unique combination” makes the difference, there has to be a reason customers choose to use your business and those reasons can create loyal customers. This definition also takes into account the way they accomplish their work because customers are interested in the marketing, selling and delivery of a product or service.
- What are the similarities and differences between the two tools for designing business models?
- Similarities: Both models require the identification of their value of the business. What makes them valuable to customers? Both models ask the business to identify the relationship between the customers and suppliers and their business.
- Differences: Model 1 asks to formulate the competitive strategy, where as Model 2 asks how to get new customers. Model 1 asks to identify the cost structure and profit potential, where Model 2 asks where are the major costs for resources and activities. In my opinion Model 2 is more personal and therefore better if a company wants to add value.
- Why was Greif Packaging able to capture more of the value in the supply chain? Where did the extra value come from, and were there others who lost the value they were selling?
- Greif Packaging is a supplier of metal drums who was able to increase their profits by supplying more than just a product. They saw their customers did not want to go through the hassle of getting the permits, cleaning & refurbishing the drums, and finding who they can hire to dispose of the metal drums which contain toxic waste, amongst other things. Therefore, Greif Packaging turned their business by eliminating the customers’ points of pain and taking care of the whole process of disposing toxic chemicals which makes things a lot easier for their customers. The customers recognize the value and dedication this company has to its clients compared to the competition and therefore become long-lasting clients of Greif Packaging.
- Name three similarities and three differences between a franchise and a license.
- Similarities: (1) Both licensors and franchisors create revenue in the forms of fees for using their products. (2) Both license and franchise agreements have to be as specific as possible to avoid legal disputes. (3) Not all licensing agreements are beneficially equal in all parts of the world, the licensee and franchisee needs to intensively review the marketing presence in that location.
- Differences: (1) A license is used for intellectual property and a franchise agreement is used for trademarks, service marks, trade names, or advertising symbols. (2) The franchisor has strict requirements in the presentation of the business because most aspects have to be uniformed throughout that franchise. Therefore is not much room for improvements. On the other hand, licensees may or may not have much freedom but there can be room for improvements, which the licensor may have right to. (3) Since many people try to open a franchise without the proper legal advise, all franchisors are required to disclose a document which includes sales information called the UFOC.
