Research has shown that in many cases of profit and nonprofit organizations fails in its operations are initiated by a wrong business plan. The organization might have the business plan but the Business Model was never developed.
For that simple and crucial reason, the operations move to a non-profiting or if profits are visualized, it becomes a non-sustainable situation. Why? The simplest explanations are:
a. The business plan are to complex and thick which later turn to be a dust collector on any of the office shelves.
b. The employees are not clear on where they are heading. If they are ‘feels’ they are clear, they are not sure where are the detail routes of their own organization.
c. The key management themselves tend to mislead in the middle of operations.
For that reason, a business model is required and turns to be the most important requirements. There are many companies succeed with a good profit margin by first developing and stand their organization to their business model.
Examples are:
a. Air Asia: A low cost provider airlines and making huge profits compared to MAS.
b. The Sun News Paper: Providing free newspaper to the public, yet enjoying their beautiful profits
c. Google: Enjoy billions of profits and yet 90% of the users through the world are free users.
d. Facebook: The two smart young billionaires, with provides 95% of the users are free.
The question is how? The answer is simple, BUSINESS MODEL.
The business model shall remain for 5 – 20 years and only the business plan being revised every year.
Literatures Study
According to Christoph, Raphael and Lorenzo stated that, there are 3 main finding why business model has been important to organizations:
1. The business model is emerging as a new unit of analysis
2. Business Model emphasize a system level, holistic approach towards explaining how firms do business
3. Organizational activities play an important role in various conceptualizations of business and it is well defined in Business Model
4. Business Model seek to explain how value is created and captured (Christoph, 2010)
For that reasons, Google, Face Book, Air Asia, and many other organizations enjoys sustainability with their business model before and their business. Google’s profit in 2010jumps 32% higher compared to 2009. In 2011 Google’s profit again increases by 17% where its Q4 2011 was USD 2.7 billion.
Air Asia record a profit of RM 500 million in 2010 where other airlines such MAS are recording at lost. In 2011, despite of high fuel spikes, Air Asia still make a big jumps its profits which is 33% increase to RM1.18 billion from RM894 billion in 2011.
For that reason, companies MUST embarked on Business Model and later shall translate it into a business plan.
Question:
a. Select a small business outfit of Batik. Describe what is their problems and challenges. Provide a proposal for their improvements.
b. Select a restaurant or small food stall outfit. What are their challenges and provide a solution to them.
Note:
Words: 2500 - 3000 words
Spacing : 1.5
Font: Trebuchet
Pliagarism work shall not be marked.
