Introduction to Strategic Industry Analysis Week 1: September 12, XXXXXXXXXXSeptember 16, 2016 An idea for a business opportunity must be developed into a business concept. Then that concept must be...

Business models and related factors
Business models and related factors
Every business starts with an idea. Getting a good idea and projecting it into the future is what starts the business. Developing a business is where the work starts. In order to successfully develop a business, there are many tools that can assist us. The starting point of launching a business would be a business model.
A business model is the shape given to a business in theory. A great business model lays the foundation for a great business start.
Business model
In simple words, a business model would be a comprehensive business plan. It contains all the projected ins and outs of the business. A business model outlines how the company will generate revenues and earn profits. It would also explain the details of the project. It contains the information on how the company plans to produce its products, how would it find the project and how will it handle the expenses in the future. (Chesbrough 2010)
Business Model development
In order to develop successful Business Models, it is necessary to find answers to four important questions. These four general areas of decisions are-
1- Revenue Streams,
2- Cost Drivers,
3- Investment Size
4- Critical Success Factors.
The first area that a good business model covers is Revenue streams.
A company needs to address what would be its sources of revenue. In identifying these streams a company would also consider whether the source of revenue would be single or multiple. Also, worth considering would be how the payment would be received, whether the payment mode would be upfront, post delivery or in installments.
The second area that a good business model covers is Cost drivers.
Recognizing the cost of production and other related costs is important for the business to successfully understand its potential. While getting answers for cost drivers, it is important to know what costs are necessary to generate the desired revenue? What would be the nature of these costs between variable, fixed or semi-variable? Again it would be a good idea to have a projection of how the costs are to be paid, whether immediately, after delivery or in installments.
The third area that a good business model covers is capital investment size.
Determining the size of the investments required is important to know how the company will be doing initially. The business model must outline whether the capital investment would be big or small and whether the business wishes to have a positive cash balance or just enough for sustaining itself.
The fourth area that a good business model covers is Critical success factors.
Identifying the various variables and issues that will be responsible for determining whether a business would fail or succeed is referred to as critical success factors. A model must have a good assessment of its potential positive and negative drivers.
Feasibility study
In order to determine whether a business model is worthy of turning into a business, a feasibility study can be undertaken. A feasibility study refers to the assessment of a business plan or idea in order to determine if it going to work or not.
A feasible business venture will have four necessary qualities. These are-
1. Timeliness
2. Attractiveness
3. Durability
4. Value.
Attractiveness:
The idea of a business venture needs to be, before everything, attractive. This attractiveness must draw from the fact that potential customers must have the want to buy the product.
For this, it is necessary to study the target market and find out who the customers will be and how will the receive the idea for the product, how will they receive the product and how much enthusiasm is the product going to create with the target audience. In short, the idea must be so strong that it would move the potential market to buy your product.
Durable:
A business venture is an ongoing one. So the idea that is generated for the business must also be a durable one. Separating the ideas of product and business is important because products rebuilt around businesses. If businesses are built around projects, and the products are not durable, the business...