Business Models and Planning Chapter Questions Assignment - 1

Business Models and Planning Chapter Questions - Assignment Example This saw poorly thought out business models become the downfalls of many dotcoms. On the other hand, however, business model is said to date back to the earliest days when business just begun and merely used to describe how a company generates it money. There is a variation in simplicity or complexity of a business model. For this case, business model can be either simple or very complex. Looking at an example of a business model, a restaurant’s business model is described as to make money through cooking and serving food to the hungry lot of customers. This is an example of a simple business model. A television’s business model may seem to be not clear as it is not very vivid how they make their money. Some make money through advertising for other companies while others get money by selling particular products. This makes this kind of business model to look very complex. 2. What does it mean to innovate the business model? Sometimes a business can reach a stage where it does not make any positive proceeds anymore. Mostly, this takes place at a stage in a business known as decline stage. At this point, the business has lost competition in the market to new entrants or aggressive competitors. The level of revenues has reduced and the business is nearing its end time of closure. To enable the business stay alive and regain its competitive edge so much that it makes profit once again and stimulate company growth, the management must reinvent the business. By this, new strategies must be put in place and all such strategies must be aimed at a major element which is customer satisfaction. This is process of business reinventing itself to regain competitive edge and improve business growth is what is known as business model innovation. When working on a business innovation model, the management needs to consider factors such as the weakness of the current business. This gives the management a point of action in order to improve competitive edge by working to