1-Why don’t businesses only aim on earning money, profit?
This question occurred in my mind because I don’t understand why a business’s main purpose isn’t profit. The text mentions that profit is an important part but it doesn’t say that it is the main goal of a business. People work in order to gain money but yet a business’s main purpose isn’t to gain money. This is nonsense. If I ran a business (I hope I will own one some day) my main goal would be to gain money, not provide certain services or make customers happy.
2- If a certain business had a lot of partner networks, wouldn’t it need to compromise with their needs and wouldn’t that result in them gaining less profit?
This question occurred in my mind due to a page in a business magazine I read yesterday. It said that the more partners a business had, the harder it was to make profit. In our texts it says that it is good to have partner networks. I know having a partner and a partner network aren’t the same things but still, doesn’t it affect profit?
3- Will it affect their customer satisfaction if a company uses cheaper inputs for it’s products?
I know that companies want to satisfy their customers so that the customers continue being customers , but they also want to maximize their profit. So if they use cheaper inputs for producing their goods or services will this affect their customers loyalty and satisfaction ?
B)
Osterwalder’s business model is useful when managing a business because it is very detailed. It describes very clearly all the steps and different parts of a business model. Also this model can help us understand how the business relates with its suppliers and customers, its process of production and manufacturing and how it generates revenue.
C)
Non profit organizations also have a system and a business model. They also need to be managed. The differance is that they don’t aim to make profit. If they have their revenues exceed their inputs they have a surplus which is used in the organization, and cant be distributed.
I have already commented on this posting in an e-mail, but here are some more comments:
ReplyDeletePart A) All very thoughtful questions. But as for A1) have you changed your mind after reading my e-mail? If so, how, and why? If not, why have I failed to persuade you?
For A2) - yes, it's generally true that having more partners (here it means members in the supply chain network that supply inputs to the business) means lower costs. That's why supply chain decisions must consider cost and quality at the same time, and make some kind of compromise between profits and quality. This leads me to A3) - yes, most businesses face this trade-off between lowering cost and delivering high quality. But it's also true that if you try to gain markets and profits by lowering costs, beyond a point the quality nof your product will suffer...the "value proposition" will be rejected by customers. Loss of market reputation, or loss of market stemming from a failurte of quality, is very difficult to recover from, even though the business might make good profits initially. This trade-off between short term gain vs long term pain is quite frequent in business.
B) I hope you can apply it to your JA business.
C) Is profit the only difference? What is the difficulty in thinking of students in this school as customers?