Why Business Model is the First Step Towards Organizing Your Business? | YRC

1
10/5/2017
Why Business Model is the First Step Towards
Organizing Your Business? YRC Your Retail
Coach
Why Business Model is the First Step Towards
Organizing Your Business? YRC Sep 18, 2017
A business model is the modus operandi used by
companies and business enterprises to generate
revenue and earn profits from their operations.
These business models may vary from company to
company. For example, Uber works on a business
model which is di"erent from that of the
Amazons. But essentially, the business model is
the very basis on which the entire business of a
company thrives. It forms the basis of how the
value-chain activities will flow, what processes
will be involved, what kind of manpower will be
required, how the resources will be managed,
what kind of technologies will be put to use,
what will be the logistical solutions and so on.
This article will attempt to highlight the
significance of business model as the primary
basis of organizing of a business. Message
us Basis of Functioning
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del-is-the-first-step-towards-organizing-your-busi
ness-yrc/
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10/5/2017
Why Business Model is the First Step Towards
Organizing Your Business? YRC Your Retail
Coach The functioning of a company or a business
enterprise is heavily derived from its business
model. If there are deviations or conflicts in
the functioning of a company with its the
planned business model, the company may encounter
di culties in creating and delivering the
intended value to its end customers which in
turn can have negative implications on its
revenues, profitability and customer base. For
example, if an e-commerce retailer whose business
model relies on procurement and delivery of
goods from third parties to overcome logistical
challenges and to cater to a wider market and it
does not deploy adequate quality control
measures before such goods are dispatched to the
customers, it may lead to customer
dissatisfaction on the grounds of quality
assurance and this eventually will hurt the brand
name of the company. And most importantly, it
will raise question marks on the business model
itself. Thus, it becomes necessary for companies
to ensure that the functioning of their business
is organized in tune with the planned business
model.
It becomes necessary for companies to ensure
that the functioning of their business is
organized in tune with the planned business
model.
Determinant of Value-Chain Activities All the
activities involved in the value-chain process of
a company, starting from procurement of raw
materials/inputs to creating customer delight
through various businesses processes, is
primarily a representation of the business model
at work. If a particular service forms an
essential part of the business model (say
adherence to the product return policies of an
e-commerce retailer), the same needs to be
integrated into the value-chain process. It
becomes a parallel necessity for the company to
have in place adequate logistical provisions for
the collection of the returned goods from the
customers and a convenient financial platform
for a quick refund of customers money. Thus, the
elements and flow of the value-chain process of
a company are determined by how its business
model is intended to work. In other words, the
entire value-chain process of a business has to
be organized in orientation with the planned
business model.
It becomes a parallel necessity for the company
to have in place adequate logistical provisions
for the collection of the returned goods from
the customers and a convenient financial
platform for a quick refund of customers money
Organization Structure MFoersmsaingeg uas
suitable organizational structure is the
preliminary step towards organizing a business.
This involves breaking up the business into
manageable
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del-is-the-first-step-towards-organizing-your-busi
ness-yrc/
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10/5/2017
Why Business Model is the First Step Towards
Organizing Your Business? YRC Your Retail
Coach and working clusters. How this division of
work will take place depends on how a company
plans to operate and what will be the strategic
requirements for such operations. For example,
if a companys operations and markets are located
at one place/city, it will opt for functional
departmentation. Or if a company has a wide
range of products and services and all business
activities are confined to one place/city, it
may opt for both product/service departmentation
and functional departmentation. Similarly, there
can be other forms of departmentation or
divisions of business according to the priorities
and convenience of a company. And these
priorities arise from the business model at work.
This involves breaking up the business into
manageable and working clusters
Organization Design Organization design aligns
the organization structure with the business
strategies. Organization design is working
towards establishing the network of flow of work,
authority-responsibility relationships and
communication and information- sharing within
the organizational structure to ensure that
business objectives are e"ectively and e ciently
achieved. For example, a company that intends to
attract customers through an USP of superior
service quality but does not have the necessary
organization design that could support
coordination between its HR function
(recruitment, training and performance
management) and CRM function, the company will
not be able to deliver the established standards
of service quality to its customers. Thus, the
organization design of a company is directly
a"ected by its business model and business
strategies and it becomes essential for
companies to incorporate the requirements of its
business model in its organization design.
Organization design is working towards
establishing the network of flow of work,
authority-responsibility relationships and
communication and information-sharing within the
organizational structure to ensure that business
objectives are e"ectively and e ciently achieved
Conclusion It is apparent that how a business
will operate and what value-chain process it will
follow is primarily defined by its business
model. And to ensure that these operations and
processes are in tune with the companys business
model, theres a need to create an
organizational structure and organization design
that supports these processes and operations. In
other words, every business has to be organized
based on the model it Minetesnsadgsetoursun on.
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del-is-the-first-step-towards-organizing-your-busi
ness-yrc/
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10/5/2017
Why Business Model is the First Step Towards
Organizing Your Business? YRC Your Retail
Coach
Author Bio Rupal Agarwal Chief Strategy O cer
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