How Does External Factors Affect A Business Model

There are three different types of models that are used for business innovation. One of these is called

* Customer demand: Rather than basing on history and forecast sale of its products, the company should pay more attention in analyzing some uncontrollable factors such as inflation, recession, and currency exchange rate which may affect customers’ buying behavior.

Business model entails many facets. To narrow down the meaning of business model, it refers to the way businesses intend to create products to sell and to generate revenue in a particular industry (Ovans, A., 2015). As business decided elements necessary to accomplish goal and objectives, they must consider many factor that influence business models. According to Band (2009a), people, process & strategy effect business models. People effects business models through skilled or unskilled employees, organizational structures and incentives. Studies found that user adoption is the top problem that organizations face when implementing CRM solutions. Lack of training and education compound implementation CRM solutions. Change in

Changes in external forces translate into changes in consumer demand for both consumer products and services. The company must prioritize to determined which factors may have the most impact and influence to the business. These factors are Political, economical, sociological environmental, and legal. Many of these factors are linked together. For example political, government legislation affect the economic factors (for example increasing the VAT). There are many models that can be used to analyze the external environment. LoNGPEST analysis examines the impact of each factor in local, national, and global aspect in the organization. It will help to where the company needs to focus and most important factors to have a sustainable and profitability in a long run(Hassanien, Dale, & Clarke, 2010; Johnson, Scholes, & Whittington). JD Wetherspoon LoNGPEST factors analysis illustrated in table format (see table 2.1). Identifying the key drivers for change is necessarily, this are the high impact factors likely to

As we head into the future, it important for any business organization to be prepared. The evolution of business technologically is rapid, and it’s important to

A business model design and innovation is the value a company brings to the market. Osterwalder, & Pigneur (2010) mentions four mapping four primary areas of environment, market forces, industry forces, key trends, and macroeconomics forces (p. 200). Each one of these four factors are important to a business model. The innovation that is required to make each mapping to become a success is much needed.

This course for juniors and seniors explores firm strategies related to innovation and technological change. We focus on how the success of technological innovations—new products, processes, and services—depends on the firm’s business model. Other key topics include intellectual property rights and the management of technological uncertainty through organizational arrangements such as corporate venturing, spinoffs, and alliances.

Business models have a huge impact on how an organizations operate. It is crucial that an organization chose a business model before inception in order to succeed. Basically, business models have become the new basis of competition, replacing product features and benefits as the playing field on which companies emerge as dominant or laggards (Plantes, 2013).

This research paper is analysis and overview of the business model canvas to highlight its genesis and features. The model will be compared to other business models to help strategic managers make a rationale decision. This paper underlines the advantages and the limitations of the of the business model canvas. The goal is to understand and to apply in the work environment the concept of the business model canvas.

One essential component in the business model is information pertaining to whom the business considers its customers, what their needs are, and how the company will create value for them. This

The shifted new strategy of Apple was initiated by the release of iPod in 2001, followed by the iPhone in 2007, then by iPad in 2012. It was the iPod that brought significant growth in Apple. Initially, the iPod was just another MP3 but soon became the icon of the digital age due to its sleek design and user friendly interface. Moreover, iPod could sync with Windows as well as a Mac and offered accessory markets. Soon enough all the competitor in MP3 market had to face the challenge of consumers comparing their model with iPod. However, the greatest challenge that the competitors had to face was the introduction of iTunes store.

Tidd and Bessant (2009) argued that “Unless an organization is able to move into further innovation, it risks being left behind as others take the lead in changing their offerings, their operational processes or the underlying models that drive their business”.

As mentioned in the article, a good business model tells a good story. Effectively communicating an organization’s business model and strategy to all the members (employees) of the organization can enhance the company’s performance. By understanding where each individual stands and how they contribute to the value chain,

However, this paper chooses this definition as theoretical perspective of analysis for this paper subject to the following modifications: A business model is overall framework and philosophy by which a company (intends or) creates value in the market place through enhancement of its own combination of raw or in-put materials to create products (tangible and intangible including services), product packaging and systematic distribution in order to generate some or the best possible profit.

Factors that happen in the external environment are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies. The main factor that affects most business is the degree of competition - how fiercely other businesses compete with the products that another business makes. The other factors that can affect the business are: