Business Model and Process of Entrepreneurship †Free Samples

Questions: Q1. Discuss what do you mean by the term Business model, critically evaluate the role it plays in the process of Entrepreneurship? Q2. How does the business model relates to the organization strategy? Q3. What are the challenges entrepreneurs being likely to experience in developing and implementing their business model and how can these challenges be overcome? Answers: 1. Business model- A business model is the theoretical structure associating the feasibility of a business, together with its determination, its objectives, goals and its continuing plans for accomplishing them. Business model is a description explaining the efforts of business for achieving its purpose. Model involve all the policies and processes of the business. Business plan and business model are similar. However, a business plan involve all the essential features to determine the viability of potential business, whereas a business model shows the elements that lead to the success of an existing business (Tech Target. 2017). There are two important functions of Business model. Value must be created by the business model in the value chain and a piece of value must in the value chain must be captured by the firm. There is a connection between entrepreneurship and business model due to the establishment of value capture and value creation. Entrepreneurship means it is an investment in a scheme that accumulates and organizes dedicated individuals and varied assets that are complexly related to developments in the scientific and technological information for the drive of producing and taking the worth for a firm. Business model is very popular, different business are trying to create new business models. Many business are threatened by the new business models. So, business that are already established must find innovative models of business to servive in the market and to face the competition and to make the place in the market entrepreneurs are finding new and innovative business models (Osterwalder, 2005). Components that are important of business model in the process of entrepreneurship are- Gross margin model, Revenue model, Investment model, Working capital model and Operating model. 2. Business model of a company is related to the strategy of the business it has a relation of nut and bolts as it provides the answer of the company plans about achieving the goals and strategies of making the profit. For example- If company is not receiving the profit due to the lack in earning the revenue from the advertisements by the websites, managers can decide to make new business model, like selling goods like t-shirts etc. through online source as a strategy to make profit (Hamel, 2017). 3. Challenges There is lack of environment understanding and only focusing of the results, not fully committed towards planning, Inappropriate people at the position of leadership, lack of efficient planning, flexible plan. Planning team must be efficient, committed towards their work and should use proper leadership skills for developing and implementing the business model. Overcome the challenges Right people should be chosen, many times people choose their friends as their co-founder which can be the reason of losses for the business, Business should adopt the right pricing strategy, accept the failure, old strategies should be replaced with the new strategies, entrepreneurs should be involved in the sales function and entrepreneur should be focused towards the target (Martinuzzi, 2013). Example of companies gained success due to business model- Apple, PayPal, Google, Napster and Facebook. References Hamel, G. (2017). The Relationship Between the Business Model and Strategy. Retrieved from: https://smallbusiness.chron.com/relationship-between-business-model-strategy-25963.html Martinuzzi, B. (2013). Ways to overcome the obstacles that kill businesses. Retrieved from: https://www.americanexpress.com/us/small-business/openforum/articles/8-ways-to-overcome-the-obstacles-that-kill-businesses/ Osterwalder, A. (2005). What is a Business model? Retrieved from: https://businessmodelalchemist.com/blog/2005/11/what-is-business-model.html Tech Target. (2017). Business model. Retrieved from: https://whatis.techtarget.com/definition/business-model