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  • Subject area(s): Marketing
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  • Published on: 14th September 2019
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Business models could be considered as the essential concepts of business performance that allow to effectively deliver the value of the product or service to the customers. Implementation of a business model is one of the most important compounds of an advanced and sustainable business strategy that allows to launch, establish, and maintain the idea of the creators of the vendors, startups, enterprise, and any other kinds of companies small or big. The approach of business management and conduction eventually defines the company's ability to generate value and profit for the company's financial success (Teece, 2010, p. 173). Moreover, it could be utilized in many ways from a particular business plan of sales to a specific business model as network marketing. Thus, it could be assumed that a business model, new or traditional is the leading applied approach and strategy to generative revenue, maintaining sustainability, and creating opportunities for further development of the business entity.

Business models provide the chance to find a comprehensive approach to understanding how should and will the company operate. They allow to design the primary mechanisms of performance, select features, and technologies that will be implemented to reach the established goals, to evaluate benefits and loss of the customer service regarding the products, and identify the needed market segments, as well as track the sources of revenue (Teece, 2010, p.173). All of these compounds contribute to the company\'s understanding of its position and behavior on the market with the existing and constantly emerging changes and competitors. Traditional business models include retail sales, advertising model, affiliate, auction, franchise, freemium, and many others that are still effective while starting a business. However, with the rapid development of modern technologies and innovations, as well as the general shift of human and financial resources to the online mode, traditional business models tend to struggle with more and more obstacles on their way to their target audience. Nevertheless, it could be stated that the majority of the most successful vendors and enterprise have been founded through traditional ways of making business, however, the market and the customers are frequently changing their requirements, demands, and needs.

New business models emerged naturally as a response to the changing times of the 21st century. Many new businesses that appeared since the beginning of the last several decades were established as start-ups - freshly created new companies that are predicted to have fast and successful growth proposing various products and services. Modern new businesses are mostly focused on delivering and implementing futuristic ideas that could be significantly influence people's quality of life. With the current advancement of the Internet, life has gained a different pace and place, providing entrepreneurs an entirely uninhabited platform for growth and development. With this perspective, the Business Model Canvas appeared that soon became one of the main and most commonly used standards for planning a start-up growth, expansion, and sustainability (ACCA, 2017, p. 9). It is often seen as a helpful tool that allows having a more clear vision of the future of the business through creating new ventures, collaborations, and technological advancements.

The past two decades have shown that many countries that previously did not show high rates of activity, now tend to develop a stronger entrepreneur approach to making business so that this created a competition for the USA and Europe or the market (ACCA, 2017, p. 8). Moreover, with the present changes in the modern society, it became possible to predict what will the business models of the future and how will they interact with the existing audience. The most promising business models that have already shown efficacy in communicating with the customers and delivering high-quality customer service are platform-based businesses, mass customization, modern barters, frugal, and “pay what you want” models (ACCA, 2017, p. 11-12). All of these business approaches made it possible to meet the need of their target market segments and utilize modern technologies and innovations for the benefits of their companies. Having this in mind it could be stated that one of the main differences between the traditional and new business models are flexibility and adjustment. In the cases where traditional businesses operate with a clearly established plan, start-ups, and SME's are capable of adapting and changing according to the requirements and demands of their operating markets.

Alternative investments

As the world is actively advancing in technologies and innovation, businesspeople and entrepreneurs are looking for new sources of potential capital investments. Start-ups, commodities, managed futures, researches, and hedge funds are expected to grow up to $18.1 trillion by the year of 2020 (Truong et al., 2015, p. 5). Alternative assets are the assets that were not previously considered to be conventional ones, however, with time became a traditional path for investment (Andonov, 2013, p. 2-3). One of the main features of interest of alternative assets is their rapid growth and development, as well as high potential for future sustainability, especially on the economies of Europe and the U.S. Moreover, it has been seen that the most promising and attractive alternative investments are private companies and start-ups; venture capital; real assets such as valuable metals, real estate, art, jewelry, wine, rare masterpieces of coins and collections; and funds (World Economic Forum, 2015, p.3-4).  Thus, it could be stated that alternative investments have indeed become a golden but hidden corner of the business world, creating opportunities and additional ways of utilizing capital (Truong et al., 2015, p. 4).

Alternative investments often are much riskier than traditional sources of financial input. However, they provide a much wider range of potential sources of income. When investing in the right product or service, the process of gaining value and profit happens much faster due to the current velocity of modern technologies and innovations. In comparison with the previous decades, start-ups and companies that are mostly focused on Internet technologies, as well as software design and data security are gaining more value and growth that businesses that were present on the market for decades. This again could be explained by the fact that they are adopting new business models that provide flexibility and convenience to their target audience and aim to maintain the quality of their products and services through on-line and adjusted support (World Economic Forum, 2015, p. 29).

In the case of the alternative investment in the form of whiskey distillery, it should be mentioned that this particular investment option could be identified to the luxury goods sector (World Economic Forum, 2015, p.2). This means that it already has its niche on the market and the potential customers that might be interested in buying the products, as well as investors for financing it could be easily identified. Furthermore, whiskey could be defined as a drink with a thorough and fascinating history, yet it also is a symbol of a specific social status, taste, and manners that clearly describe the customer's individuality. Moreover, Irish and Scottish whiskeys are valued not only for their taste but also for the culture and age that they represent. Thus, through creating an original whiskey distillery that will be aiming to meet the needs of the customers and provide high-quality products and services, it could become possible not only to design a favorable and profitable alternative investment but also to make a significant contribution to the development of the historical enhancement of the drink. Nevertheless, one of the main risks when investing in the whiskey distillery start-up is that the return income might not justify itself in the appropriate time frame and with the required amount of profit. The niche of the market is extremely specific and when the business shows on one market it might be a failure when inappropriate and irrelevant expansion takes place (World Economic Forum, 2015, p.15).

Crowd funding

Recently crowd funding became one of the most popular and most efficient ways of gaining capital for starting a business or bringing a company or a vendor to a new level. With the help of voluntary donations, people are capable of not only gaining enough money for establishing a start-up but also creating support and help funds, and multiple significant initiatives (Steinberg, 2012, p. 2). Moreover, the existence and the success of crowd funding became possible due to the growing popularity of the Internet and social media that managed to bond people according to their interests and help them find the products and services that perfectly fit their needs. Furthermore, one of the main benefits of crowd funding is that before asking the public to support the project it is possible to evaluate its actuality and make specific adjustments, according to the comments and advice of the people (Steinberg, 2012, p. 3). At the same time, through active engagement with Internet users each initiator of the project automatically finds one's perspective customers and target market. Therefore, it could be assumed that crowd funding is one of the fastest ways of gathering the required amount of money when finding the interested public. However, it has several limitations and obstacles that might significantly alter one's business.

With the exciting cons of keeping the idea of the business to oneself and not being dependent on the decisions of the investors, crowd funding foresees full disclosure of the main concept to the public. This means that potentially the initiator might lose the originality of the proposed business strategy or company. At the same time, social marketing efforts have to be extremely significant and effective to drag the attention of the maximum number of people, which often might take a lot of time (Kirby, 2014, p. 8-10). Nevertheless, having this in mind it becomes easier to find the required category of potential clients of the whiskey distillery with the help of social media and search option analysis. When engaging with people that are interested in the product and by providing them an attractive project for financing the whiskey distillery start-up could become a reality within an extremely short period with an already established network of potential users. Thus, it becomes clear that finding capital promptly is possible when seeking in the interested market segment that shares the views and visions of the project initiator.

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