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Why Business Models Matter
Whenever a business organization is established, it employs a particular business model in one way or another. Business models matter a lot since it describes the architecture and design of value creation, the delivery, and capture mechanisms that it employs. The vital roles of a business model lies on defining the manner in, which an enterprise delivers value to its customers, engage customers to pay for such values, and converts the payments made to profits. It, therefore, reflects the management hypothesis about what a customer wants, how a customer wants it, and how the business organization can organize to effectively meet those needs, get paid, and eventually make a profit.
Development in the world economy has changed the traditional equilibrium between the customer and supplier. New communication and computing technology have opened new global trading regimes, which mean that customers have more choices, and supply alternatives are numerous. These alternatives have amplified the need to consider new ways of addressing customers’ needs and capturing value for new products.
Success or even the survival of a business organization cannot be taken for granted. Organizations must always have the capability to adapt quickly to the changing economic times in order to survive. There are a number of forces that influence changes that occur in a business organization. These forces include changes in technology, changes in the customers’ expectations, and alterations in the economy. Changes in the economy influence a business organization to make changes that will sustain it through tough economic time. Changes in technology lead to the discovery of new ideas and products that influences the market and the growth of a business organization. Changes in the customer’s expectations make an organization change its operations to fit the new demand from customers. Customers will always expect quality goods and reasonable prices; therefore, a business organization must always access the nature of customers.
Elsevier, (2009). Business Models: Business Strategy & Innovation. Retrieved From, http://www.bmcommunity.sitew.com/fs/Root/8jig8-businessmodelsbusinessstrategy.pdf On May 29, 2013.
Scribd, (2008). Organizational Development and Change. Retrieved From, http://www.scribd.com/doc/9177627/Organisational-Change On May 29, 2013.