Can a Company Have More Than One Business Model? Essay Example

Although viewed as a difficult strategy of success, the application of more than one business models is recommendable for organizations destined for success.

I agree with the idea that adopting more than one model in business is good for business diversification. Contrary to this, operation in an environment with more than one business model can be devilishly difficult, and frequently causes business failure (Girotra & Netessine, 2014). In addition, some situations in business may require diversity in business models to achieve the required results. Reasonably, adopting different models is an effective tool for crowding out competitors or forestalling potential disruptors in the market, to increase the efficiency of fixed assets and associated resources, to extend into new markets, or to develop new streams of income (Girotra & Netessine, 2014). For instance, IBM and Compaq supplemented their seller distribution strategies to counter the growth of Dell in the 1990s. Additionally, Netflix deploys two business models, which involve streaming-video services and DVD-by-mail services.

Additionally, I agree with the idea that more than one business model leads to high quality products. Organizations must adapt to new business models to ensure that they remain apt with the dynamic environment (Szaky, 2011). This effort is effective in pursuing new customers, taking new market routes, offering new products and services, utilizing alternative earning models, and penetrating new geographies. Regardless of the model implemented by an organization, there is a similar challenge: the requirement to meet unique needs of success-oriented business models as well as supporting the core business. The success of various business models is based on the understanding of customers’ requirements dictated by each business model (Szaky, 2011). Each model must be anchored by an operating model with a supplementary set of service and cost level. Diverse business models compete for business resources. As a result, all resources are used utilized fully reducing chances of loss. Organizations exhibiting diversity in business models have flexible operating strategies, which are critical in determining the success of the business.

With reference to the essay, integrated business models are also ideas in the field of communication. Other models such as online and offline business strategies can be deployed in organization to improve communication. Although offline communication is limited in terms of distance of conveying message, it is essential since it involves specific people in an organization. The importance of these models is that they increase human interpersonal relationships in organizations (Asefeso, 2012). Online model involves cyberspace or virtuosity while offline model involves reality (Asefeso, 2012). The main distinction between online and offline models is that the former is a computer-aided communication model while the latter is a face-to-face communication. Linking the two business models result in an all-inclusive communication model. For instance, the online model provides virtual communication with stakeholder from across the globe. The Offline model provides interpersonal communication where critical issues can be discussed. As a result, to two models are complements of each other.

Embracing more than one business model in organization is possible since it leads to operating model improvement as well as cost benefits. Each model has specific upside or downside affects the performance of an organization. While some of the upside impacts include reduces costs and increased speed, they two factors must be balanced to ensure that price and product qualities are retained. Increased adoption of business models may lead to increase in operating costs. The costs may be balanced by the capacity of the business to retain existing customers or win new markets. Such tradeoffs should be aligned with the growth opportunities and overall financial objectives of the organization.

References

Asefeso, A. (2012). Online Marketing for Start-ups and Offline Business. Kansas: AA Global Sourcing Limited.

Girotra, K., & Netessine, S. (2014). The Risk-Driven Business Model: Four Questions That Will Define Your Company. USA: Harvard Business School Publishing Corporation.

Szaky, T. (2011). How Many Business Models Can One Company Have? – Sustainable Report. New York Times.