A2 Models for Business Opportunity
A business model refers to the core strategy a business uses to sell goods and services to customers. When starting a new business to have the the opportunity to choose what models of business activity, processes and organisational form to use.
Business activity can take place in the primary, secondary or tertiary sector.
The primary sector involves extracting raw materials from the earth. Activity in the primary sector includes farming, fishing and mining.
The secondary sector involves converting raw materials into finished goods. Activity in the secondary sector includes manufacturing textiles, food, drinks and other products.
The tertiary sector involves the provision of services. Activity in the tertiary sector includes sales of goods and services, food delivery, education, beauty services, sports coaching, etc.
Business Processes
Business processes include manufacturing, outsourcing, sourcing and channels to market.
Manufacturing involves using people and/or machinery to convert raw materials into finished goods.
Outsourcing involves the purchase goods and services from a supplier to use in production or to sell on to a customer.
Sourcing involves developing knowledge and expertise to understand and develop relationships with suppliers in a market and offering that as a service to other businesses.
Channels to market refers to how goods and services are distributed from producer to consumer. There are opportunities for business at different points along the supply chain. for example, a business may decide to sell directly to the consumer or choose a business to business channel.
Organisational Form
Organisational form refers to how people in the business are organised to achieve the business aims. Models of organisational form include structure, roles and responsibilities. Roles and responsibilities are the duties and activities allocated to each individual member of staff to achieve the firm’s goals.
Organisational structure refers to the way in which people are organised into departments and teams, how leadership is organised and how decisions are made.
Some organisational structures may be more centralised which means that decisions are made by a smaller number of people and the majority of staff follow instructions given.
In decentralised structures, decision making authority is delegated to staff across the organisation.