Unit 1 AOS 2 KK3 Flashcards
Business model
The way in which the business will run its operations to generate a profit. As circumstances change, the business model may need to be adapted
Online business strengths
They exist solely on the internet
able to avoid expenses associated with brick and mortar such as rent and wages
Increases accessibility
Online business disadvantages
may be higher number of dissatisfied customers since they haven’t seen the product in real life.
Businesses may expose customer across the globe
Types of online businesses
Advertising-based websites, Freemium, Brokerage, Merchant
Advertising-based websites
Free public access and generate revenue through advertising
Freemium
Some applications such as spotify attract large customer base with free service offers
Brokerage
Websites such as eBay brings buyers and sellers together in exchange for a fee when a sale is made
Merchant
Online sellers who operate through their own independent website
Brick and Mortar
A physical location such as a store in a shopping centre
Brick and mortar disadvantages
Far more expensive to establish and maintain
Many f these businesses have to adapt their busines model to stay competitive
harder to compete
Bricks and Mortar strengths
Customers are able to see the products in real life
Better customer connection
Direct to consumer business
businesses that sell their products directly to consumers without any intermediaries such as retailers or wholesalers
Features of DTC
can take form of bricks and mortar and online retail businesses, they have a strong focus on connection with their customers, which leads to customer loyalty
Advantages DTC
lower costs
strong connection to customers
Disadvantages DTC
can be time consuming and less efficient than selling to retailers, business relies on online selling
if businesses rely on online websites they are at risk of exposing customer credit information
Franchising
The business owner (franchisor) grants another (franchisee) the right to use their trademark or trade name, business systems, and processes
All franchisees should sign a legal document
Franchising advantages
Already have a well-recognised name
Don’t have to build your businesses reputation from the start
Franchising disadvantage
you need to pay a fee, need to follow the franchise model can’t make it to your taste.
Import and Export
Imports are goods and services produced overseas and sold to australian consumers. Exports are goods produced in Australia and sold overseas
Imports features
Importers source goods from overseas that will be competitively priced on the Australian market due to quality, cheaper production cost, lack of visible alternatives. THey need to factor in shipping distributions and taxes on imports known as tariffs.
Import and Exports advantage
cheaper cost of productions
access to products that are not available locally
Import and exports disadvantage
Need to ensure the goods and services meet Australian standards
Foreign exchanged
