Journal - MARKETING STRATEGY AND BUSINESS MODEL
Knowledge on marketing function has informed my understanding that marketing strategy begins after obtaining a solid business model which is defined by marketing targets and the organization’s operations capabilities which include limitations on its resources. Even so, a good business model enables a firm to know how to adapt itself internally or by forging alliances with external business units and thereby increasing its flexibility to the target market (Lavie, 2006, 368). I consider a good business model to be one that can enable an organization to develop workable marketing strategies. I have learnt that resource based view theory as being very common in formulating efficient business models whose foundations are strategic alliances. Business models based on strategic alliances may be aimed at maximizing a pool of resources so that the involved partners can gain competitive advantage against their rivals (Priem & Butler, 2001, 39). I perceive that many alliances may be aimed at a kind of revenue generation but revenue on its own may not be the real objective of the firm. From such a perspective, I consider a business model based on strategic alliance as being critical to the creation or maintenance of a core competency which will be a source of competitive advantage to the firm. An effective business model ensures that the adopted strategies work against present and future competitors in order for the business to maintain or grow its market share across the identified market segments (Machado & Davim, 2016).
After a thorough study on this topic, I have understood that the essence of any business model is found in the definition of the way in which an organization delivers value to consumers, convince them to pay for that value and transforms the payments made into profits. I think that any marketing strategy, including strategic alliance must address customer value and the strategies employed by competitors serving the same market segment. In addition , though a firm may consider sources of advantage such as cost leadership as being essential , other factors can also come into play and define market competition altogether. I think using the internet to develop a business model is a strategic way of gaining foothold in a competitive market. The business model would involve an internet based marketing strategy which allows diversification into both related and unrelated business. It would also allow a good alliance with suppliers and intermediaries in order to position the firm’s products in a competitive environment. I found out that strategies may not means what is understood at face value. For instance, price leadership does not always refer to low prices but could also be a price that is most valuable to the customer, considering the long-lasting value that they attach to the product. Moreover, such strategies must be carried out together instead of focusing on a single one, so as to efficiently prevent rivalry competition in a market arena that is managed well.
Therefore, I understand a business model as being more generic than a marketing strategy and combining the strategy with a business model is important so as to guard any competitive edge that may arise from such efforts. Combining an analysis of the competitive marketing strategy with that of the business model calls for segmenting the market, and developing a value proposition for every segment created (Machado & Davim, 2016).
Reference
Lavie, D 2006, 'The competitive advantage of interconnected firms: An extension of the resource-based view', Academy Of Management Review, 3, p. 638, Academic OneFile, EBSCOhost, viewed 21 October 2016.
Priem, R, & Butler, J 2001, 'IS THE RESOURCE-BASED "VIEW" A USEFUL PERSPECTIVE FOR STRATEGIC MANAGEMENT RESEARCH?', Academy Of Management Review, 26, 1, pp. 22-40
MACHADO, C., & DAVIM, J. P. (2016). MBA: theory and application of business and management principles. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=1165001.
