Having the correct business model can drive you to success even more than the product would. To be successful in business, you need to use the right materials and the right method at the right place and time; this will give you explosive results.
We take a look at some of the best business models that have been very successful. This list is not exhaustive though, and it is not given in a particular order. It gives some business models that are most interesting and influencing.
Just in Time (JIT) model: This model was developed by Toyota in the 60s. It involves ordering for what you need when you need it so as to keep inventories at the lowest level.
Dell has used this method successfully. Its customers place their order then pay. Dell then orders the parts required from the suppliers to build the customized PCs. This reduces its cost of holding inventory.
Dell combines this method with a direct-to-consumer process which has made it cut out the retail middlemen thus further cutting down on costs.
Growth First model: In this model, the entrepreneurs aim to grow first before they start scooping profits.
A good example is that of Bezos who started Amazon in the 90s but it was not until the early 2000s that he started seeing profits. His business model proved the axiom “slow and steady wins the race”.
Lifestyle takeover model: This model concentrates on the consumers’ lifestyle. In this case, you provide what the customer needs even before they anticipate them.
It works well for Google and Apple. Their products focus on our homes, businesses and our need for entertainment. They serve people of all ages and their prices are reasonable. The prices keep the companies afloat and at the same time are affordable.
Name-your-own-price model: This is a model in which vendors bid to meet the prices customers set. It is mainly used for air tickets and hotel stays. Bookings offered under this program are not disclosed by name or itinerary. This is to protect the suppliers by not linking then to the discounted quotes that would change the prices they regularly charge
The concept has been used successfully by Priceline, a travel site that also offers conventional travel planning services.
Listing deals and prices model: In this case, the business lists the prices of all deals and prices so the customers can compare and choose what suits them.
It has been used successfully by Kayak, eBay, Amazon and Invisible Hand. Amazon has even combined regular and offer-aggregate sales into its pricing for every product.
One day best deal model: This involves making a limited amount of one product available at an attractive price each day.
It has been used successfully by Woot, LivingSocial, Groupon and Moolala. Woot has delved into the social networking interests of its customers. It gives them a chance to play online adventure games so as to earn deal information. Groupon, Moolala and LivingSocial provide discounts on products, meals and services with local merchants.