Business model is an important basis for the success of a business. Because it helps businesses determine their strategies and development goals. In Vietnam, there are many popular types of business models that have been applied successfully. So what types of models are they? Together Viindoo finds out now!
What is the business model and its main components
Business model is the way a business organizes and carries out activities to create value and profit. It describes the way businesses build, deploy, and manage their business operations. Including identifying products/services, target markets or cost provisions to meet customer and market needs.
Business models help businesses predict future trends
Business models play an important role for every business. It helps new businesses attract investment and provides motivation for employees. For long-standing businesses, the model helps them predict current and future trends and challenges.
The current business model includes the following main components:
- Products/services: This is the core part, providing value to customers and generating revenue.
- Client: The business model needs to clearly identify target customers. This helps businesses focus on growing and reaching customers in the best way.
- Distribution channel: This is the method that businesses use to bring products/services to customers. Including retail stores, websites, agents, mobile applications, business partners,...
- Compete: One business model It is necessary to analyze and understand the competitive market to come up with appropriate competitive strategies. This helps businesses have a competitive advantage over their competitors.
- Cost structure: Determine the costs associated with manufacturing a product or providing a service. This helps businesses manage finances and price products reasonably.
- Revenue: Identify potential revenue sources and methods to attract customers to generate revenue. Revenue sources include sales, advertising, subscriptions, renewal services, commissions, etc.
- Partners and resources: The business model may depend on establishing relationships with partners. At the same time, the model takes advantage of external resources to accomplish business goals.
Top 10 popular business models today
Every business will apply one business model differently. Here are the 10 most popular models:
B2B2C retail model
B2B2C (Business To Business To Customer) is a cooperation model between two business units (B2B) to bring products to the final consumer (B2C). This model takes advantage of the advantages of both models to optimize business processes. For example: Retail stores, agents, and distributors will purchase goods from suppliers on one platform to retail to consumers.
The B2B2C model optimizes costs for the end user
Brand franchise model
In this model, the franchisor provides business licenses, training materials and support to the franchisee. Including manufacturers, distributors, retailers, etc. The franchisee will pay royalties to use the brand name and sell the franchisor's products and services. In addition, the franchisee may also have to pay a percentage of revenue depending on the agreement between the two parties. For example: Chang Hi sweet soup, Hai cheek fish cake bread, Trung Nguyen E-Coffee,...
Business transfer model
Agency model
Agency companies specialize in consulting and providing marketing and communication solutions for other units. They are experienced, well-trained professionals capable of creating effective communication strategies.
The Agency model is simple and has a clear system
The development model of a simple agency can be described as follows:
- Build a stable potential customer system.
- Establish a professional team to manage and operate projects.
- Develop the agency through expansion and construction of subsequent projects.
Online business model
Online business models are becoming increasingly popular and vibrant in the era of technological development. This form of business is often done on platforms such as social networks, e-commerce platforms and websites. Online business model has many outstanding advantages compared to the communication model. Include:
- Staff costs and cash costs are more economical.
- Reach customers with a wide range.
- Customers can choose and pay more conveniently.
The online business model has many outstanding points
The online model is considered favorable for both sellers and buyers. Sellers start their business easily and reach potential customers. Buyers can shop anytime, anywhere. This is the reason why online selling is considered a trend of the present and the future.
Affiliate marketing business model
Affiliate marketing is a method of making money through advertising and introducing other people's products/services on online platforms. Marketers will receive a commission percentage when customers click to make a purchase or view product/service information through the link they provide.
Marketers receive a percentage of commission when someone clicks on the link they provide
For example, KOLs/Reviewers on Facebook, TikTok,... earn commissions by recommending products on the Lazada and Shopee marketplaces. They attach the marketing product link to the article or video. When someone clicks to buy or view a product through a link. At this time, they will receive a commission from the product/service provider.
Education industry business model
This model is a form of business based on niche products in the field of education. The business operates using a combination of Freemium and subscription models. A typical example is the ELSA English application - an online English learning application. Users can download and learn some basic lessons for free. However, to have access to more lessons and advanced features, users will need to subscribe to the paid medium version.
The education industry business model requires registration and payment to use high features
E-commerce business model
This model takes advantage of the internet, allowing buyers and sellers to connect and conduct transactions through online stores. In Vietnam, there are a number of e-commerce sites that have successfully applied this model such as Tiki, Sendo, Shopee, Lazada, ...
Shopee and Lazada use e-commerce business models
Subscription business model
Business model Registration usually comes in 2 forms:
- Register to buy once and use the product for life
- Register to buy services/products monthly/yearly.
Netflix uses a subscription model to make a profit
For example: Netflix, Amazon (with its Prime service) and LinkedIn already use subscription models to generate revenue. However, to retain customers, businesses need to continuously provide new products/services or practical content.
Profit model from accompanying products
This business model focuses on creating customer passion for a specific product of the business. Once they have created interest from consumers, businesses will take advantage of the opportunity to cross-sell products of higher value.
Create trust to sell accompanying products that generate high revenue
Freemium business model
This model is very popular in businesses providing Software as a Service (SaaS) products. It works on providing free usage along with paid services. The product can be used for free for a short time or only with some basic features. To continue using for a long time or gain access to advanced features, customers will have to pay a fee.
For example, the Chinese dictionary application Hanzii Dict offers a free version with lookup, translation, and review flashcard creation features. Once a user upgrades to the paid version. They will have access to expanded features such as learning statistics, ad removal, HSK test preparation, advanced specialized idioms handbook, etc.
Freemium model requires payment to use upgraded features
Steps to building an effective business model
Building a business model plays an important role in orienting and creating development strategies for businesses. To build a business plan, you can refer to the following steps:
Step 1: Build a business model idea
The first step is to develop a creative and viable business idea. This idea must meet market needs and bring value to customers. To do this, you need to perform the following operations:
- Market analysis: Identify current market needs and trends.
- Research competitors: Learn about businesses operating in your area of interest.
- Evaluate your ability to perform: Consider the resources and knowledge you need to execute your idea.
- Find the difference: Identify the strengths and differences of the idea compared to competitors. This will help your business differentiate, be unique and attract customers.
Step 2: Set business goals
After developing a business idea, you need to set clear and specific business goals. Business goals need to be divided into many different stages. Include long-term and short-term phases and make sure they are measurable with specific numbers. For example, number of products sold, revenue, profit, etc. The steps you need to take include:
- Determine the target: Set specific, clear business goals for each stage of business development.
- Make an action plan: Identify specific actions that need to be taken to achieve the set goals.
- Monitor and evaluate: Regularly monitor progress and evaluate achieved results to make timely adjustments.
There are 5 basic steps to building a business model
Step 3: Market research
Market research plays an important role in helping businesses better understand customer needs and factors that influence their purchasing decisions. This process includes:
- Analyze customer needs: Identify target customers, their needs and desires.
- Evaluate competitors: Learn about current and potential competitors and their business strategies.
- Identify challenges and opportunities: Evaluate external factors that may affect the business. Covers market, legal, technological, economic and social trends.
Step 4: Set up a SWOT model
The SWOT model is an important tool that helps businesses analyze the internal and external environment to identify weaknesses, strengths, opportunities and threats. Steps include:
- Strengths analysis (Strengths): Identify internal factors that help businesses have a competitive advantage.
- Weaknesses analysis: Identify key internal factors that hinder business development.
- Opportunities analysis: Identify external factors that businesses can take advantage of to grow.
- Threats analysis: Identify external factors that can harm the business.
Step 5: Build a business model and implementation work
This is the most important step to turn a business plan into reality, including the following steps:
Business model orientation: Businesses determine how they operate and create value for customers.
- Detailed planning: Develop detailed plans such as marketing plans, production plans, HRM, financial management,…
- Implementation organization: Assign tasks to each specific department and individual. At the same time, ensure that plans are divided strictly and effectively.
- Evaluate and adjust: Continuously evaluate results and adjust if small errors are made. This is to ensure the business operates effectively and meets customer and market needs.
Viindoo business management software - Modern business model management software
Viindoo provides a very diverse and comprehensive set of business management products. Thereby helping businesses optimize work processes and improve business efficiency. Below are some of Viindoo's main management software, along with outstanding features:
- Viindoo Accounting: The center receives, manages and processes all accounting data in real time.
- Viindoo HRM: With Formula "Taking people as the center" to create competitiveness for businesses. This is a solution that meets all needs of management, operation and promoting comprehensive business development.
- Viindoo Omnichannel: Manage sales activities effectively, support customers anytime, anywhere on any device.
- Viindoo E-Office: Digitize all operations and business management activities, increasing work efficiency.
- Viindoo MRP: Manage, improve and automate all production activities of the enterprise.
- Viindoo SCM: Connect every aspect of the supply chain with standardized processes and automated rules.
- Viindoo Marketing: Attract potential customers, increase conversion rates and develop appropriate marketing strategies.
- Viindoo Website: Build brand trust, seize all chances to capture and turn visitors into leads.
Viindoo - an address that provides effective business models
Business model is a foundation that needs to be built to achieve success for every business. Therefore, you need to consider, research carefully and take solid steps. NIf you are still having difficulty knowing which business model to use, please contact Viindoo via hotline: +84 225 730 9838 right away. Sure Viindoo will provide you with an effective startup model.