Industry Environment Business Model Essay

Submitted By gaby0113
Words: 938
Pages: 4

Lenny Marrero

How do changes in the environment affect the success of a company’s business model? Industry environment is not a natural process nor inevitable by the evolution of human cognitive faculties. It requires new innovated ideas, and a thorough pragmatism to put them to work. Multinational corporations such as Google, Walmart, Staple, among others, did not flourished in a vacuum, by luck, accidently, or just by simple matter of time. Their creators had to spent a lot of time and dedication to their companies and have the courage to think differently from others. Henry Ford is a great example of this. He began to mass-produce cars using an assembly-line process, something that dramatically reduced production costs and enabled him to decrease car prices and build consumer demands (pp.181). Thinking in new ideas and implementing new strategies is the beginning to create a new transforming industry environment which impulse to different companies to adapt their business model to a continuing transformation of the market. Long hours operating, Self Service, Chaining, Franchising, all of them are different strategies created by a business model affected by the industry environment, in this case (Technology).
The industry environment affects the business model of the companies in many ways. The ways in which different kinds of customer groups emerge and the ways in which customer needs change are important determinants of the strategies that need to be pursued to make a business model successful over time. The mature companies hold their leading positions because they have developed the most successful model and strategies in an industry (pp.190). This is why establishing a good business model is so important. Because business model is the foundation by which the company thrive. Nonetheless managers play a very important role that can bring success or failure to a corporation. Managers need to look for new strategies and understand the nature of customer’s needs in order to create a model that accelerate the demands of the product. Nowadays if managers want to lead their companies to success they need to have a wide knowledge that range from technology to behavioral economics in order to make it. It’s very important for managers to understand these sources because their choice of strategy can accelerate or retard the rate at which a market grows (pp.190) The best way to explain how industry environment affects significantly a business model is through examples of the history of different successful corporations. Sam Walton wouldn’t be able to track his wide inventory if he hadn’t new technology that enabled him to do so. We can take other great example of how industry environment affect business model. John D. Rockefeller sold oil that enabled the people of United States to have light in their lamps. The only way that in this time people could have light in their home is to use lamps that work with one specific oil. John D. Rockefeller own most of the oil that the American people used to turn on their lamps. He made a fortune from this market and became one of the richest men in the world. In contrast J.P Morgan discovered the genius of Thomas Edison which was working in a new technology never seen in his laboratory. J.P Morgan had an innovated idea and worked with Edison to bring light to different houses using electricity instead of gas. This new idea transformed the world and because of him we are able to have light in our homes in a very sophisticated way. However this new industry environment (technology) brought to John D. Rockefeller a huge problem. In order to keep his corporation he had to establish a new business model that could adapt to the new…