Business Models and Planning Chapter Questions Assignment

Business Models and Planning Chapter Questions - Assignment Example Typically, business models undergo significant adaptation to immediate business environments. This means that managers can employ an appropriate business model to counteract changes brought by actions of competitors and other market forces. Technically, business models strive towards maximizing profits by optimizing interrelatedness of production inputs. Practically, outcomes of adopting a given business model remains uncertain. Some model innovations may yield successful outcomes while others may lead to failure. Based on chapter 4 on business model innovation, it is undeniable that companies use different approaches in trying to increase profitability. Despite the immense competitive pressure exerted by active model innovations, most changes in those models are still radical as opposed to being specific2. In many cases, a firm may adopt a correct model but lacks technical framework of articulating the model’s principles into its marketing lines. One definite relation between model innovation and profitability features in the aspect of value proposition. Value proposition becomes instrumental whenever product and service firms understand essential behaviors of consumers in potential markets. All model innovation processes adopts the notion that value proposition plays a significant role in influencing consumers’ purchase decisions3. Inclusion of a concise and appealing proposition statement will not only attracts customers’ attention but also convince a new consumer into purchasing a product or service. In order to appreciate the importance of value proposition in marketing, one should acknowledge the influence exerted by service-profit chain. This chain establishes the relationship between customer satisfaction and profitability. Supposedly, model innovation aims at enhancing corporate profitability by addressing the needs of stakeholders, which in this context comprise