Business Week 2 DQR
Food and Beverage
Business models are a crucial part of a business’s creation and daily operations. “A good business model clearly explains the core logic behind the system, how it all works together to create and capture value” (Spencer, 2013).
There are many different types of business models, business to consumer, business to business, consumer to business, consumer to consumer, and product and marketing business models. While these models are distinctly different, most companies use and incorporate multiple models into their business plans. The two we will focus on are the product and marketing, business models.
The industry I was assigned is food and beverage. This is a very large industry that utilizes many different models. Let’s start with the product business model. This model focuses mainly on the product or service being provided. The food and beverage industry primarily utilizes this practice. A bar or restaurant has food and drinks designed and detailed on menus. A consumer comes to the business and requests an item from this pre-established item list.
The marketing business model is used to allow the customer to provide feedback on the product or service. While this is not very common in the food and beverage industry, there are companies that enable customers to create a food item that is tailored to their wants. For example, the meal prep industry that has become very popular in recent years is mainly based on the marketing business model. Customers are able to pre-select meals for the upcoming weeks. This provides the companies with direct consumer feedback that affects the products the company offers.
Spencer, Barbara. Business Model Design and Learning: A Strategic Guide, Business Expert Press, 2013. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/apus/detail.action?docID=1048406.
Business Models – Banking
As we learned this week, every business must have a successful business model to be profitable and sustainable. All companies must possess a model different from their competitors, but it must also be viable and offer better services or goods than competitors. This week I was assigned to research Consumer Apparel business models and break down how they make their profit. There are many ways companies in this industry model their business, but I decided to break down Etsy’s business model due to how unique they provide products to customers. I will also break down TJ Maxx’s business model due to its uniqueness.
One of the newer models is Etsy. Etsy allows almost anyone to open their own “marketplace” and sell whatever they want, including clothing. Etsy’s marketing strategy allows all of its creators to have complete control over what they produce and allows small businesses or individuals to sell their work globally.
Someone I know personally has their business model on Etsy. They thrift old jeans at various thrift stores for cheap, cut sections out of a pair and then replace them with a section from another pair. This done with a wide variety of fun and exciting patterns creates some very cool consumer clothing at a low cost.
Etsy has a straightforward but unique business model. This business model allows a wide variety of sellers to connect with a wide variety of customers to provide various products, including clothing. Etsy charges $0.20 for each item a seller lists. Etsy charges a renewal fee on each listing along with the listing fee. Like most websites, sellers can pay to have their clothing promoted on the front page or to appear first when their category is searched. But, in my opinion, the unique part of this business model is the ability for merchants to have their products on Etsy and Pattern. Pattern is a website builder operated by Etsy and is a tool a seller can use to create their own website for their products. Esty charges a $15 monthly fee for this service, but sellers do not have to pay listing fees or renewal fees. If you were running a small clothing company, do you think listing your products on Etsy would be worthwhile?
Another popular consumer business model is TJ Maxx. TJ Maxx provides customers with name-brand clothes for cheap. They can achieve this because they will reach out to manufacturers that overproduce clothing items. When this happens, TJ Maxx gets an excellent opportunity to buy bulk name brand clothes cheaply and resell them up to 20-60% off retail price while still making a profit. Additionally, when department stores overbuy, they will sell their overage to TJ Maxx to make a slight profit and not lose completely. TJ Maxx also reaches out to companies at the end of fashion seasons and buys whatever is going out of season to sell at a considerable markdown. These different avenues of acquiring clothing allow TJ Maxx to market as a reduced-cost seller. Do you think sellers like TJ Maxx can inadvertently devalue certain name brands?
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