Business Models
Organizations use different types of business models, generic strategies an have different market segments. A business model is used to describe a rational of how an organization can create, deliver and get value. A business model is part of business strategy. A business model can be used to categorize businesses. Managers use business managers to explore different possibilities in the company that they can exploit in future so as to enhance development. The business models include cost leadership business model, differentiation business model etc. The business model used in HBI is differentiated business model. The differentiation business model is aimed at creating products that customers see different from competitors’ products in some way. The products developed by the company are different in quality and other attributes from the products manufactured by other firms. The differentiation business model has helped the company increase its sales by attracting more customers and retaining existing customers (Griffin, 2006).
Apart from using the business model, the organization uses different types of generic strategies. The main determinant of a company’s profitability is the attractiveness of the industry it operates; most companies have devised various strategies to position themselves in the industry. A company can position itself by taking advantage of its strengths. The strengths of a company fall into two classes. That is cost advantage and differentiation (Griffin, 2006). This is according to Michael porter. Michael porter has used the two categories of strengths to develop various generic strategies. There are three types of generic strategies. That is cost leadership strategies, differentiation strategy and focus.
Most businesses have applied the strategies at different levels. The strategies are called generic strategies because they do not depend on the company or industry.
The cost leadership strategy involves the selling of products at an average price. Most companies that have used cost leadership strategies have managed to make huge profits than their competitors. Apart from selling their products at an average price, the companies sell their products at a price that is below the average price in the industry so as to increase their market share. The cost leadership strategy is used to target a large market segment. The cost leadership strategy has been effective in the company as the company has been able to increase its market share (Jones &Hill, 2009).
Apart from cost leadership strategy, the differentiation strategy has also led to huge profits in the organization. HBI has used differentiation strategy to develop unique products and offer unique services. The products are designed to meet customer needs. The products and services offered are different from the products offered by other companies. The company has also been able to meet the needs of people in different market segments by developing products that meet customer expectation in that market segment (Jones &Hill, 2009).
The focus strategy has also been good. The focus strategy has allowed the company to target its market segments. This has made it easy to satisfy the needs of the customers as the company targets different market segments. All the market segments targeted by the company have been successful. The profits from the market segments are high and hence the overall profit in the organization (Jones &Hill, 2009).
Reference
Jones,G.,&Hill,C.(2009).Strategic Management Theory: An Integrated Approach. Cengage Learning
Griffin,R.W.(2006).Management. Cengage Learning, 2006
Is this your assignment or some part of it?
We can do it for you! Click to Order!
