BMA202 Business Strategy

Models in virtual business

Business model

Business models represent the content, framework, and governance of business activities. These models allow a company to take advantage of new opportunities by creating value. For a model to succeed, it must have a successful business strategy and techniques.

Business model Components

Value network

Connecting the company with various stakeholders is an important part of the business concept. Suppliers, consumer data, and interpersonal ties all fall under one umbrella. There is much more to the network than just information and goods and services (Grover 2019).

Strategic choices

The business model's strategic decisions are how the company plans to meet that customer demand. Customers, pricing structure, revenue and pricing techniques, corporate identity, product diversification, and strategy competition decisions are all included in this list of considerations (Solaris 2020).

Capturing the value

The business model entails lowering the cost of operation while raising the profit margin and other financial elements of the company's operations.

Creating value

The business model entails adding greater value to the organisation. This is accomplished through growing the firms' resources, assets, and the method by which their goods are manufactured.

Virtual business model

A virtual business has the least amount of physical structure, one that runs and performs the majority of its operations over the internet. How a virtual firm uses its creative, strategic ways to market its business and produce new ideas and innovations is the focus of the virtual business strategy. Its business network approach has allowed them to get more customers (Herciu 2020). The corporation may make much money by selling to many people online. Feedback from customers in this marketing strategy helps the corporation make product evaluations and raise expectations. Companies operating entirely online may find it useful to use the virtual shop concept.

Amazon Virtual storefront model Strategy

With a virtual storefront, a business can offer its products or services online without worrying about setting up a physical location. There is an enormous online market for third-party merchants and individual shops to offer their items via the business's virtual store. To distribute e-books and other e-reader content, Amazon may employ the virtual storefront concept (Hewage et al. 2018). Customers will be able to do product research, place orders, and complete payments on Amazon's website. Consumers of Amazon, for example, may look for books, read reviews about them, and then buy it. Using this technique, Amazon can interact with its consumers on its website, therefore recognising what the consumers need and satisfying their aspirations (Tou et al. 2019). Amazon's supply chain benefits from the strategy since it expands its offerings to include groceries and food. A variety of items will assist Amazon to improve its profits by using the concept.

Advantages virtual business

The approach is cost-effective since the firm has fewer retail locations and lower overhead costs such as insurance. The concept enables the company to adapt to changing market conditions (Haque, Saber and Shah 2018). A large number of potential clients are brought into contact with the company. As a result, resulting in increased profitability.

Disadvantages virtual business

Employees of a corporation with a virtual business model lack cohesion since they are spread out around the globe. As a result, employees become less disciplined and less productive since they can work from home.

Conclusion

Businesses have developed a new model to better take advantage of emerging market opportunities. To maximise the business profitability, the virtual business model demands making a strategic decision that will allow them to add value to their network and product range. In order to get a competitive edge over its competitors, Amazon, a virtual firm, can use the virtual storefront strategy. However, the approach can lead to the productivity of staff.

References

Grover, N., 2019. Enabling shift in retail using data: Case of Amazon.

 Herciu, L., 2020. The Impact of Virtual Collaboration Attributes on Business Strategy Alignment (Doctoral dissertation, Drexel University).

Hewage, T.N., Halgamuge, M.N., Syed, A. and Ekici, G., 2018. Big Data Techniques of Google, Amazon, Facebook and Twitter. J. Commun., 13(2), pp.94-100.

Solaris, J., 2020. Virtual events need a better business model.

Tou, Y., Watanabe, C., Moriya, K., Vurpillat, V. and Neittaanmäki, P., 2019. A new concept of R&D in neo open innovation: transformation of R&D triggered by Amazon. International Journal of Managing Information Technology, 11(1).

Haque, T.U., Saber, N.N. and Shah, F.M., 2018, May. Sentiment analysis on large scale Amazon product reviews. In 2018 IEEE international conference on innovative research and development (ICIRD) (pp. 1-6). IEEE.

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