Importance Of Business Model In Business Strategic Management – Volvo Group Case Study

Factors determining a better workplace and business sustainability

Discuss about the Marketing Mix Elements on Customer Loyalty.

The business strategies used by the organization to create a better work place includes various key factors. These factors determine the well working of the business and creating a better position in the market. The business sustainability includes the judicious usage of the business resources to enhance the scope of business and hi-light the success factor of the business. One of the most prominent factor of business strategic management is business model (Shah, 2013). The business model is a plan created to describe the rationale of how the organization is creating, delivering and capturing the value in economic, social, cultural and other contexts. It forms vital part in business strategy that helps the business to run smoothly and process its strategies in a sustainable manner. The business model helps the business to grow in various aspects such as:

The competitive advantage gives a company competitive edge to the company in comparison with other company. This helps the business to understand the scope for the business in the market. A unique business model can give the company a unique reputation and image in the market. This helps the business to find its own identity in the market thus entering the market with proper brand name and popularity. The business that introduces the business model first, gets the chance to boost in orders and reduction in the expenses (Zott & Amit, 2013). The business model makes the business different from other organization and gives it a separate place in the market. A business model that brings consistent profit to the business is a primary reason for the business to grow. The business model that grows in the support of creating a better opportunity for the business in the financial field is highly beneficial for the business type. The business model helps to create a better scope for sales and income in the organization (von Rosing et al., 2015). Thus, it is very important to create a business model in every organization. The business model helps to create a financial sustainability for the business so that the business do not incur extra expense while running. It helps to weather the economic storms by creating innovative and strategic planning’s for the business. Every year a good amount of business organizations close their door due to lack of sustainable financial management. However, the business model helps the organization to make necessary plans and steps to create more economy and prevent the business from shutting down. The investors are aware of the small business loss or failures. However, every investors has the wish to know about the business plans that are in favour of meeting the failures and taking necessary steps to enhance the profit. During that time it is necessary to present a proper business model to appeal and attract the investors to attract them to invest in the business.

Role of business model in business strategy

It is a strategy where a business starts up from a root level and creates a replacement in the market with the pre-existing brands. The reputed brands get replaced by these emerging brands due to their innovative strategy and business management formula. The term disruption in business means the proper innovation in the business that creates a new market and channels that replaces the reputed brands and take their place. It is a slow process that requires a lot of time. The term disruption means a slow start up of an innovative business that targets to reach a new height in the future. They use innovative business plans to exceed their previous position and reach a new target every day. Thus it is very important to use business plan to make sustainable and beneficial changes in the business. The slow but steady process promises the business customers to look for their need and requirement. As they know that the consumers are the basic platform that will help them to reach the new heights. Thus the disruption is a vital process is solely dependent on the business model that determines the scope of the business to expand and explore in the future.

Easy communication and interaction with the customers. Using of hi definition machineries and technologies to produce the products. Use of better equipment and machineries by inter communication with international market. Advertisement using the social media and networks. Speed in spending the information to the customers about the product and its benefits(H & Sanchez, 2014). Ease in inert changing products and raw material among the countries.

Heavy expenses incurred by the Volvo group due to high rate charge in the technology involved. They do the bookings with the help of internet, this can be a serious risk to the customers as the rate of cyber-crime has increased in the present days (McQuivey,2013). The issues like system failures, interruption in communication often creates gap between the customer and the company. The workers also might get distracted due to a network cut down or a halt in the system process (Lepore, 2014). Often they have foreign customers who would be disappointed if there is a gap in communication between them.

Business model canvas is a template guide that can be used to pen down some the features of the company (Chesbrough, 2010). With the help of a business model canvas following is the business model of Volvo Group described.

The value proposition helps the business to reach the customer and let them know about the product quality and standard they are providing to the customers. The business model helps the Volvo Group to present themselves to customer in a sustainable manner where they can assure their clients a successful use of their resources and investments in the business and thus provide a standard product to the customers. The product value of the Volvo Group has to be reached to the customer in a desired form so that they can select this brand over the rest (Mankoff, 2014). Thus, a proper business model is necessary for creating a value proposition about the production quality in the market.

The business model helps the business to create more money and customers in the market. The Volvo group will face a rise in the business if they use the business strategies in a sustainable manner and use their resources in a desired way (Stylidis et al., 2014). They should include in the business model the use of the employee knowledge and skills. They must also include the plans to include the planning of the firm to turn its resources into a customer value product to compete in the market (Morris, Shirokova & Shatalov, 2013).

References:

Netland, T., & Sanchez, E. (2014). Effects of a production improvement programme on global quality performance: The case of the Volvo Production System. The TQM journal, 26(2), 188-201.

Lepore, J. (2014). The disruption machine. The New Yorker, 23, 30-6.

Mankoff, J. W. (2014). U.S. Patent No. 8,825,522. Washington, DC: U.S. Patent and Trademark Office.

McQuivey, J. (2013). Digital disruption: Unleashing the next wave of innovation.

Morris, M. H., Shirokova, G., & Shatalov, A. (2013). The business model and firm performance: The case of Russian food service ventures. Journal of Small Business Management, 51(1), 46-65.

Shah, R. B. (2013). Impact of marketing mix elements on customer loyalty: A study of fast food industry. Prestige International Journal of Management and Research, 6(2/1), 54.

Stylidis, K., Hoffenson, S., Wickman, C., Söderman, M., & Söderberg, R. (2014). Corporate and customer understanding of core values regarding perceived quality: Case studies on Volvo Car Group and Volvo Group Truck Technology. Procedia CIRP, 21, 171-176.

von Rosing, M., von Scheel, H., Hove, M., & Fonseca, M. (2015). Importance of Business Model. The Complete Business Process Handbook, 2.

Zott, C., & Amit, R. (2013). The business model: A theoretically anchored robust construct for strategic analysis. Strategic Organization, 11(4), 403-411.

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