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Submitted by: VISHAL PARWANI
104260 MBAFBE 2B
The business model is simply a working description that includes the general details about the operations of a business. The components that are contained within a business model will address all functions of a business, including such factors as the expenses, revenues, operating strategies, corporate structure, and sales and marketing procedures. Generally speaking, anything that has to do wit h the day to day functionality of the corporation can be said to be part of the business model.
As part of the business model, there is a need to address internal factors that relate to the ongoing operation of the company. This will involve defining the departments and divisions within the company, along with the procedures that govern the creation of positions and job responsibilities within each department. Management of all the departments is also an important component of the business model, as is the definitions of the responsibilities of the executives within the organization. Business operations such as manufacturing facilities, defining the production process, and allowing for the labor needs to produce the products are also part of the business model.
External factors also are part of a comprehensive business model. Chief among these elements is defining the target consumer audience for the goods and services produced by the corporation. This one single element of identifying the target audience will influence the form and function of both the marketing and sales efforts of the company, which in turn will impact the overall cost to produce each unit of a product. The business model will take this information into consideration and set retail pric ing that will allow the company to operate at a profit, assuming a certain level of sales is realized consistently.
. and supply chain management. Almost 10 years after Apple¶s launch of the iPod. sales and marketing concerns and forecasts. Competitive business platforms drive and nurture the latest business innovations ± mass collaboration. And they also do the same for ³oldfashioned´ ones as well ± things like business process management.Business operations. and obsessed with product control. customer intimacy. These developments signal a new formula for business success that extends beyond the glitzy world of Hollywood or the high tech software and telecommunications industries. More importantly. They¶re mistaken. but did not really exploit it. or see Apple¶s approach as completely irrelevant to their businesses. options portfolios and real time analytics to mention a few. ecosystems. community branding. leading firms in other industries have used the recession to put plans in place. most corporations either stand in awe of Apple¶s accomplishments. the company has put many of those behaviors behind them. while periodic reviews and updates help to keep the business model relevant to current economic conditions and consumer demands.prosumerism. BUSINESS MODEL OF APPLE INC Apple understands that business platforms fundamentally change the rules of competition and accelerate cumulative business performance. AT&T is being schooled again about business platforms as it copes with Apple¶s latest generation ipad 2 releases. and organizational structure are all essential components of the business model. global cooperation. RIM had the makings of a business platform long before Apple. Ironically. Apple has taken the approach and out-executed almost everyone else on the planet. unresponsive to external input. community formation. Nokia and RIM became Apple students in the last 12 months ± both have adopted a business platform approach. labor costs. Operating with a comprehensive model helps a company to maintain focus on a core mission. While many see Apple as enslaved to secrecy. iTunes and the iTunes Store. transparency. social networking.
and iPod are not music players and multimedia phone ± ergo products ± so much as they are business platforms. the embedded software inside the product (iPhone OS). The iPhone. and the iPhone global industrial complex (core manufacturers ± e. the iPhone SDK (systems development kit). interface standards and requirements. 3. In other words the business platform contains a common understanding for business transactions. The result is a cumulative transparency that enables tens of thousands of participants to collaborate asynchronously and independently. In so doing they create economic value. Products must become business platforms that grow through collaboration. For example. A multitude of social networks and communities surrounding Apple¶s iPhone business platform. Business platforms create a sort of lingua franca for all of the participants. iPhone). technical specifications.g. the App Store and the iTunes store are the complete ³rules of the road´ for operating in the iPhone ecosystem.Here¶s what Apple has learned and what I believe all companies should heed ± the undeniable superiority of the 21st Century business model: 1. 2. the economic community (the iPhone ecosystem which includes AT&T. Business platforms create a learning platform that spawns communities of interest and communities of practice. the collaborative platform (iTunes+App Store). the iPhone developers. the iTouch. Google. IP and practices daily and cajole and attempt to predict Apple¶s next move. A business platform is the totality of the physical product (e. related iPhone social networks and communities. . As a consequence transaction costs are minimized for all parties and efficiency results.). Numerous Apple -sponsored and independent communities trade ideas. business communication. accessory providers etc.g. a continuous wellspring of innovation and mutually extend the overall value of the economic community. They also rapidly extend the capabilities of Apple¶s core product way beyond what Apple could ever do so on its own. business rules. VERIZON and other wireless providers. Business platforms create superb externalities and a powerful ecosystem. Yahoo. embedded in the iPhone OS. Intel.
I know my pick. the participants. the platform generates a prodigious amount of valuable information about the product. The generation and management of options remains at the core of business strategy. internally driven innovation engine. the ecosystem. Because all elements of the business platform are networked. 5.4. Business platforms generate a superior portfolio of strategic options. extend and enhance the product and ultimately delight the customer. . Business growth depends upon the portfolio of business options available to the executive team. new ventures and appropriate acquisition strategies for growth. improve. Who has more options for the future. Apple knows the score for each element of the platform and uses the information to fix. Traditional business models depend upon internal knowledge and internal innovation processes to generate new product ideas. and the customers in realtime. Business platforms generate untold business analytics for the platform¶s owner and participants. product-focused. which company has greater future value? The company with a business platform or a company with a 20th Century. Such traditional processes are anemic when compared to an enterprise armed with a 21st Century collaborative business platform. Apple or Motorola? Who has a richer options portfolio on potential products and services? Who has better information by which to value those options? For an investor looking to make an investment.