Environment Affects Business Model

In: Business and Management

Submitted By vikashroy
Words 286
Pages 2
How do changes in the environment affect the success of a company’s business model?

First of all I will like to define business model; the business model describes how an organization creates, delivers, and capture value economic, social, or other forms of value. The Business Model is part of the Business Strategy. To create a successful business model, managers must choose business level strategies, that will give the company a competitive advantage over its rivals. They must decide customer needs, customer groups, and distinctive competencies.

Organizations use business models to develop business strategies and earn profits from business operation. Business owners or executive managers may be responsible for creating these business models, and a company’s productivity will be affected by the environment where the business operates. Changes in economic factors can either help or hurt any business chance of success. Any increase in the availability of workers, may allow companies to more hiring, this will help or increase the production output, which can dramatically change a business model. Also, a decrease in the availability of labor may debility companies’ ability to produce goods or services efficiently and effective. Also physical resources allow companies to produce as many goods as possible. When resources begin to diminish, companies may face high production costs for production.

Companies with successful business model need to continuously develop and improve their business level strategies to sustain their competitive advantage overtime as the industry environment changes. Companies often employ business analysts to study the strength of natural environment resources and may determine what changes may occur in the near future. These analysts may be responsible for anticipating the changes to government regulations regarding…...

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