New Business Model

Prepared By:

Name : Tiafana Aqil Ikhsan

NIM : 1834021068
Lecturer : M. Reza Anwar Nurdin, S.Ds, MM

Faculty of Economics
Programme Study of Management
University of Krisnadwipayana

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 PREFACE

The First of all, thanks to Allah SWT because of the help of Allah, writer finished writing the
paper entitled “New Business Model” .

The purpose in writing this paper is to fulfill the assignment that given by M. Reza Anwar
Nurdin, S.Ds, MM as lecturer in Entrepreneurship.
in arranging this paper, the writer trully get lots challenges and obstructions but with help of
many indiviuals, those obstructions could passed. writer also realized there are still many
mistakes in process of writing this paper.
because of that, the writer says thank you to all individuals who helps in the process of
writing this paper. hopefully allah replies all helps and bless you all.the writer realized tha
this paper still imperfect in arrangment and the content.  then the writer hope the criticism
from the readers can help the writer in perfecting the next paper.last but not the least
Hopefully, this paper can helps the readers to gain more knowledge
.

Jakarta, January 2nd, 2020

Tiafana Aqil Ikhsan

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 TABLE OF CONTENTS

PREFACE.............................................................................................................................................2
TABLE OF CONTENTS......................................................................................................................3
CHAPTER 1..........................................................................................................................................4
INTRODUCTION.................................................................................................................................4
1.1 BACKGROUND.............................................................................................................................4
CHAPTER 2..........................................................................................................................................5
DISCUSSION.......................................................................................................................................5
2.1 UNDERSTANDING OF BUSINESS MODEL......................................................................................5
2.2 Components of a Business Model................................................................................................5
2.3 The Importance of A Business Model..........................................................................................6
2.4 The Example of Business Models implemented..........................................................................7
CHAPTER 3..........................................................................................................................................9
3.1 Conclusion...................................................................................................................................9
3.2 Suggestions..................................................................................................................................9
REFERENCES....................................................................................................................................10

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 CHAPTER 1

INTRODUCTION

1.1 BACKGROUND

A business model is something that describes and explains the business itself in order
to be able to assist in making consideration of changes and business progress professionally.
Business seems inseparable from competitive activities. If this is the basis of business, then
business practices must carry out a healthy competition. If it is associated with current
conditions with what is called free trade. Then the activity of competing in business between
one businessman with another business cannot be avoided.

In general, business is defined as an activity carried out by humans to obtain income

or income or income in order to meet the needs and desires of his life by managing economic
resources effectively and efficiently. In the era of business competition which is growing
rapidly and diversifying, we are required to be able to create a small business opportunity into
a large business opportunity. By following the development of varied customer attitudes. This
requires us to create a new innovation and can satisfy the needs of the community.

To make it all happen, we need careful planning so that the business we build can be
realized and develop according to our expectations and be in line in the corridor. Therefore,
we need to really determine exactly who the segment of society we will aim at, what products
will be produced, how much will be incurred and other things related to the business that we
will live.

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 CHAPTER 2
DISCUSSION

2.1 UNDERSTANDING OF BUSINESS MODEL

 Definition according to experts :

 Wheelen and Hunger (2010) :

Methods used by the company to make money in the business environment
where the company operates.

 Rappa (2000) :
The business model is a method that the company uses to run the business that
makes the company can survive .

 -Afuah (2004) ,
-Osterwalder and Pigneur (2005):
The business model is a description of how a company makes an added value
in work world , including the combination of products, services, images, and
distributions and resources and infrastructure. Then the concept of the business model
has been positioned between inputs used by the company to get economic output.

 Advantages Of The Business Model :

 Analyzing or photographing an ongoing business, looking for market segments, the value
offered from a business, and the financing structure is appropriate or not.
 Do business planning that already exists. if we have a business that was first established until
now it is still steady and just like that, not losing but not advancing too, maybe it's good we
look at the business model then we develop.

2.2 Components of a Business Model

1. value proposition
A company’s value proposition composes the core of its business model ,it includes
everything it offers its customers in a specific market or segment. This comprises not only the
company’s bundles of products and services but also how the company differentiates itself
from its competitors. A value proposition therefore consists of the full range of tangible and
intangible benefits a company provides to its customers (stakeholders).
2. Market participation dimension
The market participation dimension of a business model has three components. It
describes what specific markets or segments a company chooses to serve, domestically or
abroad .what methods of distribution it uses to reach its customers, and how it promotes and
advertises its value proposition to its target customers.
3. Value chain infrastructure dimension 

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 The value chain infrastructure dimension of the business model deals with such questions
as, what key internal resources and capabilities has the company created to support the
chosen value proposition and target markets, what partner network has it assembled to
support the business model, and how are these activities organized into an overall, coherent
value creation and delivery model.
4. Global management submodel 
The global management submodel summarizes a company’s choices about a suitable
global organizational structure and management policies. Global organization and
management style are closely linked. In companies that are organized primarily around global
product divisions, management is often highly centralized. In contrast, companies operating
with a more geographic organizational structure are usually managed on a more decentralized
basis.

2.3 The Importance of A Business Model

Before start small business, you need to create a business model your roadmap for small
business success .
 A business model is a blueprint for small business success
Building a business is a lot like building a house and who can imagine a house built
without preliminary sketches? Creating a small business model means planning on paper the
fundamentals of your business. It helps you, as an entrepreneur, to put aside the excitement
and make a realistic evaluation of the potential success of your business idea. A proper
business model helps you to figure out elements such as: Your business concept what
problem are you solving for whom, how you will create customer value, how your product or
service will get to customers, how your business will stay competitive, and all revenue and
costs you can anticipate.
 Take your time creating a business model
You may have a few ideas scribbled down on a sheet of paper name ideas, product prices
and ideal locations. This is a great start, but a proper business model takes time. Starting a
small business is exciting, but you also need the strongest foundation possible to ensure small
business success. Don’t guess what your business’ customer value will be research. Survey
your friends and work your business network to find the true value of the solution that your
product or service offers to the marketplace. Taking your time creating your business model
will ensure you don’t underestimate or overestimate anything.
 Consider all possible areas of concern
There are many moving parts when it comes to running a business and you don’t want to
be caught unprepared. For example, how exactly will your product make its way to your
customers? Make sure your business model is thorough and covers all the bases. Once you’ve
proven the feasibility of your new business or your business expansion plan on paper with a
business model, you’re ready to write a more comprehensive business plan. Proper planning
takes time and effort, but you’ll see the return on that investment when your great idea has
become the great, successful small business you envisioned.

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2.4 The Example of Business Models implemented
These 10 companies and their business models to get inspired for business ideas :
1. Airbnb
Airbnb is an online marketplace that enables people to list, find and rent
accommodations (single rooms, apartments, houses, …) for a processing fee. The biggest
accommodation provider in the world does not own a single room. Airbnb does not rent
the accommodation from the host but conveys only between supply and demand. Their
business model builds on the share economy and on the strong believe that house owners
are willing to rent out free space to strangers.
2. Alibaba
Alibaba Group is the largest (online) retail company in the world. Alibaba Group has
no inventory. Long tail competitors like Amazon buy merchandise and sell these to their
customers by using their own infrastructure. Alibaba`s main focus is to connect buyers
with sellers. Momentarily, it mainly relies on bringing together Chinese sellers with
buyers around the world. The value of Alibaba lies in the software interface, not in the
products.
3. Hilti
Hilti is a Liechtenstein multinational company that develops, manufactures and
markets products for construction, maintenance, and mining industries, primarily to the
professional end-user. Hilti has disrupted the market by shifting from a purchase to a
transaction/rental based business model. They realized that their customers’ need is not to
own a reliable tool rather than having the right tool at the right time. They are handling
the maintenance of the tools and their customers simply rent their tools whenever they
need it. Thus, their customers don’t have to have every single tool they would possibly
need in their stock.
4. IKEA
IKEA is not only our first source of candles and a reason for a quarrel on a Saturday
afternoon. It’s also a group of companies that designs and sells ready-to-assemble
furniture appliances and home accessories. Its business model includes global sourcing of
components, accessible suburban stores, quality products with sophisticated European
design at low cost, and in-store amenities, such as coffee shops, restaurants, and day-care
facilities.
5. Tesla
Tesla Motors, Inc. is an American automotive and energy storage company that
designs, manufactures, and sells electric cars, electric vehicle powertrain components, and
battery products. It aims to accelerate the advent of sustainable transport by bringing
compelling mass market electric cars to the market.By offering a wide range of high
quality services Tesla makes the use of an electric car easy and uncomplicated. This
positive experience leads to the fact that 9 out of 10 customers would recommend their
Tesla car. In order to enhance further growth, Tesla invests heavily in their infrastructure.

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6. Wikipedia
Wikipedia is a free Internet encyclopedia which helps to improve common
knowledge. It allows its users to edit almost any article accessible. It is the largest and
most popular general reference work on the Internet and is ranked among the ten most
popular websites. The company is able to motivate a large community to participate on
the project without offering financial benefits. With the contribution of the online
community, Wikipedia ensures the quality of the articles.
7. Zara
Zara is a Spanish clothing and accessories retailer. It is one of the world’s largest
international fashion companies.Zara produces where it sells. It utilizes a very tight
supply chain from initial design through to final production. This allows the company
adapt to new fashion trends and ideas within two weeks. As a result, short lead times for
new products and fast replenishes of sold-out merchandise, are being made possible.
8. Local Motors
Local Motors is an American motor vehicle manufacturing company focused on low-
volume manufacturing of open-source motor vehicle designs using multiple micro
factories. Local motors searches for new and forward-looking problems of whole
industries and solves them in a much faster way and with lower development costs than
traditional companies with the contribution of a large online community.
9. Easybank
Easy Bank is the second largest direct bank in Austria. Easy Bank offers a wide range
of financial products via online banking and without a branch network. By keeping the
infrastructure costs to a minimum, the bank is able to offer services without transaction
and account fees.
10. Red Bulletin
Is a lifestyle magazine that features breathtaking sports, culture, music, nightlife,
entrepreneurship and lifestyle stories. The focus of the magazine is to press further ahead
with establishing the Red Bull brand around the world. Red Bulletin creates revenue
through the subscription fees before the costs of the production of the magazine occur.
Besides, of that the magazine creates further value by advertising Red Bull activities.

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 CHAPTER 3
CONCLUSION
3.1 Conclusion

A business model is a plan for how a company is going to make money. This can be
simple or very complicated. The business model should include details on all operations, as
well as short- and long-term visions for the business' growth. Without a business model,
investors and owners will not have a clear idea of how to best grow the business, and it will
be much harder to create a stable and sustainable concern.
In the implemented example .All of these companies have realized their customer
needs and are putting their pains in the center of their focus. It’s key to have a good
knowledge of customers to build a successful business.A genius business model can change
business works and even determine whether business is successful or not. Try to think out of
the box. What other ways are there to deliver value to customers. Stay open-minded and
don’t stick to the status quo.
In the era of business competition that is growing rapidly and diversifying, we are
required to be able to create a small business opportunity into a large business opportunity.
By following the development of varied customer attitudes. This requires us to create a new
innovation and can satisfy the needs of the community.To make it all happen, we need
careful planning so that the business we build can be realized and develop according to our
expectations and be in line in the corridor. Therefore, we need to really determine exactly
which segment of society we will aim at, what products will be produced, how much will be
incurred and other things related to the business that we will live .

3.2 Suggestions

In making this paper , the writer realize there are still shortcomings and errors caused
by the writer has limited knowledge . Therefore the writer asks for criticism and advice from
the readers.

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 REFERENCES

https://www.whataventure.com/blog/10-inspiring-business-models/

https://saylordotorg.github.io/text_fundamentals-of-global-strategy/s06-01-components-of-a-
business-model.html

https://smallbusiness.chron.com/components-business-model-3861.html

http://canadianentrepreneurtraining.com/why-a-business-model-is-so-important/

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