![]() This involves production, processing, mining of goods. Industry: Industry implies the economic activities that are associated with the conversion of resources into goods that are ready for use.This can be done by making available quality-riched goods easily available to them, at reasonable prices. The consumer is regarded as the king, and so all the activities of the business are aligned towards the satisfaction of consumers. But, if they are not, there are chances that they will look for substitutes. Consumer satisfaction: The aim of business is to supply goods and services to consumers, so as to satisfy their wants, as when the consumer (final user) is satisfied, he/she will purchase the goods or services.Legal and Lawful: No matter, in which type of business the company is engaged, it should be legal in the eyes of the law, or else it will not be considered as business.It may be possible that the business earns a huge profit or suffer heavy losses. the amount of money which the business is going to reap is not certain. Uncertain return: In business, the return is never predictable and guaranteed, i.e.However, the factors that affect business are uncertain and so does the business opportunities, which can be a shift in demand, floods, fall in prices, strikes, lockout, money market fluctuation, etc. Efforts are made to forecast future events and plan the business strategies accordingly. ![]() Element of risk: Risk is the key element of every business, concerned with exposure to loss.It is the spine of business, which keeps the business going, in the long term. Profit earning: The basic purpose of business is to make the profit from its activities.So, to constitute business, the dealings must be carried out on a regular basis. an isolated transaction of exchange of goods or services will not be considered as business. Continuity in dealings: Every business requires regularity in transactions, i.e.Selling of goods and services: Business must involve the transfer of goods to the customer for value, through selling, meaning that if the goods are acquired for personal consumption, then the transaction will not amount to business activity.Goods are either manufactured by the company or procured from the supplier, with the aim of selling it further to the consumer, for profit. Production/purchase of goods and services: Goods and services are produced or procured by business entities, so as to add value and sell them to the consumer.Economic Activity: Business is an economic activity, as it is conducted with the primary objective of earning money, i.e.Finally, Mark Johnson provides a list of 19 types of business models and the organizations that use them. You can innovate a new model by altering the mix of products and services, postponing decisions, changing the people who make the decisions, or changing incentives in the value chain. Rita McGrath offers that your business model is failing when innovations yield smaller and smaller improvements. Introducing a better business model into an existing market is the definition of a disruptive innovation, as written about by Clay Christensen. Alex Osterwalder also builds on Drucker’s concept of assumptions in his “business model canvas,” a way of organizing assumptions so that you can compare business models. Joan Magretta carries the idea of assumptions into her focus on business modeling, which encompasses the activities associated with both making and selling something. Businesses make assumptions about who their customers and competitors are, as well as about technology and their own strengths and weaknesses. Instead, Drucker’s theory of the business was a set of assumptions about what a business will and won’t do, closer to Michael Porter’s definition of strategy. Many people believe Peter Drucker defined the term in a 1994 article as “assumptions about what a company gets paid for,” but that article never mentions the term business model. A look through HBR’s archives shows that business thinkers use the concept of a “business model” in many different ways, potentially skewing the definition.
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