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Analysis of the Aspects of a Business Model

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Quasi-Charitable Provision of a Service Project or Business Model

This section analyzes the elements of the business model procedures that my organization has created. The approach created by my group was based on the assumption that a limited amount of complimentary tickets may be offered for each trip to help low-income workers to travel overseas. This may also be viewed as the company’s moral duty. This new business model was created via abduction, in which our members first asked how the problems in the aviation sector might be addressed and what the future of the aviation industry is. As demonstrated by the construction of bigger and more sophisticated aircraft, the aviation business has been influenced by new technology and is driven by growing demand for airline services (Chen, 2009). My group was thus committed to developing a business strategy which would be competitive and creative enough to meet the underlying problems. One of the group’s difficulties was the intensity of competition in the airline sector and the changing character of the industry owing to technological effects. The Group was thus resolved to create a transformative business model that is capable of bringing about dramatic change in the sector.

The business model was created via the integration, as demonstrated in the appendix, of creative and innovation abilities. Each group member was asked to provide a noble concept which would assist create a business model that would address the problems of the company’s future growth. The concepts have been combined to create the model. The suggestions put forth by the participants were based on many criteria. One of the reasons for this is that the plans must focus on managing the airline’s stability. Another part of the ideas was that they should be aware of the company’s overall business plan’s discontinuities. Members should thus have personal knowledge and expertise in the business in order to provide recommendations that will help to manage strategic discontinuities when the strategy is implemented. Because of technological and commercial demands, the ideas also relied on the ability to maintain and control industrial patterns (Chen, 2009). This is the ultimate business model for establishing an environment that balances different strategies for the company’s growth. Finally, ideas depend on the ability to handle industry changes in order to ensure business continuity and growth. When redundant approaches to be replaced with new strategies to execute the model, a successful business model should be able to detect them. The processes involved in developing the business model were therefore modified in order to produce a model capable of drastically altering the firm and supporting the company’s future growth (Chesbrough & Rosenbloom, 2002).

Evaluation of a Business Model

This section contains a review of the business model, as well as its ability to support the company’s future growth. The evaluation is based on a comparison of almost charity supply with commercial e-commerce methods. As a result, the evaluation compares the quasi-caritative delivery of a service project with the integration of e-commerce with the business’s booking system. This is because a service project’s nearly altruistic offering is not sustainable and ignores the challenges of emerging countries (Michael & George, 2006). A overview of the two models’ SWOT analyses is given.

Quasi-Charitable Provision of a Service Project or Business Model

Overview

The model will be effective in addressing the challenges in business growth, which were the main issues of concern by the company the industry. One of the main challenges the company was likely to face in its growth efforts was intensity in competition which could lead to a loss in market share. The introduction of free tickets was an effective way to market the company and assist in increasing and retaining its share of the market. Through this, the company will be able to attract more customers as they seek to get the free rides (Afuah & Tucci, 2003). The business model could however be unviable in the long as the cost of maintaining the free tickets could be too high for the company. The model will be effective in facilitating the promotional objectives of the company. 

Quasi-charitable provision of a service project or business model

Analysis of the Aspects of a Business Model

Advantages of the Quasi-Charitable Provision of a Service Project

Promotional Objectives

 Since every business operates with an objective of increasing profits, achieving the promotional objectives will be an important step towards guaranteeing a success in company growth. The promotional objectives will be achieved through awareness and Trial.

Awareness and Trial

Offering free tickets to some customers will be the best strategy to create an awareness of the company’s services and creating an opportunity for more clients to try the services. After getting a free ride, a client will definitely use the company’s services in future if a need arises. The free tickets will also offer a “trial’ opportunity for some clients who might be uncertain about the company’s services. These are suitable promotion techniques to market and advertise the company’s services. Overall, the business model will be effective in facilitating the future growth objectives of the company (Kittl et al., 2001). The model will thus implement radical changes in the company. The major challenge in this business model is that it will be expensive to maintain for a long time. Another issue is that it will be difficult to determine the right people to offer the free-ride tickets.

Attitude Towards the Services

After using trying the company’s products, the consumers will develop a positive attitude towards the products and the company in general. The goal of quasi-charitable service project offering is to ensure that the business fulfills its ethical responsibility to the public. This will further cement the positive image of the company among the clients (Hamel, 2000).

Disadvantages of the Quasi-Charitable Provision of a Service Project

The business model experiences two major drawbacks. One of the issues is that the model might be too expensive to support in the long run and the second one is that it will be difficult to determine the customers to give the free rides (Chermack, 2011). The failure of the model in the long run might give the competitors an opportunity to cancel out the effects of the model. The E-commerce business model will be viable and effective both in the short-run as well as in the long-run. This makes it a better model compared to Quasi-charitable provision.

E-commerce Business Model

Overview

This is a business model in which the company will introduce the e-booking system in its operations. This is a form of Business-To-Consumer e-consumer in which the company will process customer tickets through internet technologies. Because of disruptive innovations such as the introduction of e-commerce in the airline industry, new developments that will affect the operations in the airline industry will emerge. The new developments might be prove challenging to the future growth of the airline company (Bilton & Cummings, 2010). Quasi-charitable offering of a service project will not be sufficient to address all of the difficulties confronting the company’s future development. As a result, the company is forced to integrate a number of business models or introduce a new model such as e-commerce project into its operations. Demand-pull and technological push might also lead to the creation of new markets, which will be a significant development in the industry. The E-commerce business model is flexible and will reconcile and balance any change occurring in the airline industry.

Benefits of the E-Commerce Model

This model has numerous advantages which are lacking in the Quasi-charitable provision of a service project. The model addresses any emerging market failure in the implementation of other strategies and reduces the transaction costs for both the client and the airline company. The company will for instance be able to maintain an on-line booking system in which the customers will book flights at their places of convenience (McGee, 2005). The processing and recording of tickets will become easier while the clients will be able to get instant feedback of their bookings. This will reduce paperwork and facilitate the keeping of records. The customers on the side will benefit because they will no longer need to travel to the airports to book their flights. They will also be relieved of having to wait and time when the offices are opened in order to book flights. They will be able to access the web and book flights at any time of their convenience while comparing pricing by different companies on the Internet.

Competitors’ Reactions

After the introduction of either of the two business models, the competitors will respond in different versions in order to match the progress in the industry. Trade has become global in the modern world and is increasingly intensifying the levels due to technological factors and other issues. The competitors will use many techniques, including similar business models to influence and draw consumers into their services. Some of the techniques that the competitors will employ include:

Price Promotion

After implementing the Quasi-charitable provision business model, the competitors will use price promotions to induce consumers into purchasing their services. The competitors can for instance, lower the prices of their flights temporarily in order to counter the effects of the free tickets in the short-run. Although this will lead to a reduction in earnings, the competitors will be aiming to benefit in the long run when the model becomes unviable (Ceci, 2009).

Sponsorships

The competitors can also decide to use the sponsorship strategy in which people in the low-earning class are given free rides. This strategy will be different from the Quasi-charitable provision business model in that the sponsorship are random and prearranged unlike the model which will have free tickets for every flight (Chesborough, 2006).

Similar Models

The competitors can use similar models to woe consumers into purchasing their products. The other airlines can introduce free tickets in every flight and introduce e-commerce strategies in their operations. This will keep them competitive in the market and allow them to keep their loyal consumers.

Strategies to Main Competence

Although the competitors will respond in different ways after the implementation of the two models by the airline firm, the firm can deploy various strategies to enhance the effectiveness of the models. Some of the strategies include capitalizing of First Mover Advantage, increasing network dominance value and strategic allowance (Barney & Hesterly, 2010).

First Mover Advantage

The company will have the advantage of being the first to implement the business models and will thus benefit most from the models and command the largest share of the market. The company can increase its share of the market to an extent such that some of the competitors drop-off the market (Barney & Hesterly, 2010).

Increasing Network Dominance Value

The company will benefit from the models before the competitors learn and gain enough experience to benefit from the strategies. The company can also incorporate the strategy of “run” in which it innovates faster than the rivals (Barney & Hesterly, 2010). This will be achieved through the enhancement of capabilities and creation of competencies to facilitate the growth of the company. This is accomplished after evaluating the company’s and the business model’s strengths and shortcomings.

Strategic Alliance

The company can collaborate with other firms which are not direct competitors in areas of research and development to determine the best techniques to increase competence. The companies will at the end minimize research and development expenses and share ideas towards the implementation of business models (Barney & Hesterly, 2010).

References
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  • Special Issue on Business Models” that includes 19 pieces by leading scholars on the nature of business models Long Range Planning, vol 43 April 2010

Appendix

Analysis of the Aspects of a Business Model

Design-driven innovation of the Quasi-charitable provision of the business model

Radical change Technology Incremental change Meaning radical change

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