BUSINESS MODELS

BUSINESS MODELS



Business Models

Introduction

To conduct the day to day activities of a business we need a proper system and model. This system and model provides us a clear guidance, direction and supervision to conduct the business. As the time is passing new business models are developing. Social business model is one of the new aspects of conducting the business. In this paper I would discuss the differences between traditional business and social business.

Traditional business model

Traditional business unit is a design of business that helps the businessmen to earn profit. The basic approach of traditional business is to maximize profit as much as one can without causing any social benefits.



Social business model

The objective of social business model is basically to pass all the benefits to the customers. It is a customer oriented business model. But one thing that is worth mentioning is that this sort of enterprises is not non-profit organization. They must have to compete with other traditional or profit maximization organizations. Organizations that operate using this sort of business models have to earn enough profit to cover the expenses.

Example

One of the best examples that fit best to explain the concept of social business model is of Gramene Dannon food plant. Famous football player Zinedin Zidane inaugurated this project. This project provides nutritious dairy to the children of rural areas.

Difference between traditional and social business models

Investor's interest

As social business model does not provide ant dividends to the investors and investors have low expectations regarding dividend sharing it becomes difficult to maintain investor's interest in the business.

Traditional business model provides ample share to the investors they remain interested and engage with the business and provide support to the business.

Customer's involvement

Social business model adopts customer oriented approach. This model believes in providing maximum benefits and advantages to the customers.

Traditional ...