Osterwalder Business Model

1) It is stated in the article that the purpose of business company should be producing/manufacturing satisfactory products for the customers. But, why should the organization consider the customer more than its profit?

The question aroused in my mind because until now I never thought that one way of being successful in business is to care more about the customer than its revenue. Hence, the revenue is linkeed to the customer; if the customer is satisfied from the product, s/he buys it and therefore the company earns money.

2) The article states that earning profit it not a purpose of business, than why does it give an example such as ; it’s something that it crucial like breathing even though we are not obliged to breathe?
Before I read the article I thought that what business aim is on earning more money than they spent for manufacturing their products. However, it is stated in the article is that yes businesses have to make profit in order to supply their expenses. The question aroused in my mind because I couldn’t exactly find a satisfactory solution to it.


3) Is the Osterwalder business model the only model that business organizations must follow?
The question aroused in my mind because, while I was reading the article I thought that there this is the only particular model that the companies can use in order to be successful because there were no other examples given.

Why is this model useful?

The Osterwalder template may be very useful because each part/section of the diagram is linked to the 8 other. For example customer relationship is linked to value proposition, target customer and distribution channel, which are linked to other sections. Thus, the template provides a practical approach to success in business. It helps the managers to keep track of the changing business environment and adapting to these changes. This template clearly shows how to create, deliver and capture value of its own.
Another reason why the model might be useful is that it allows us to comprehend how a company does business, earns money and makes profit without going through all the details of all its strategy, processes and systems.

Can it be applied to non business organizations?

Non business organizations can also have a business model, because every organization needs management. The business model would ease the process of managing the organization. The only different among the organizations is (business& non-business) that non business organizations don’t aim to make profit. Thus, the simpler model applied to this type of organizations help them to be more successful in business.

Kellogg's Company

1. Name the three sectors of the supply chain. On what occasions could certain sections of the primary sector operate as retailers?

The supply chain is consisted of 3 main sectors; primary/extractive sector, secondary/manufacturing sector and the tertiary sector.
Often the Raw materials suppliers sell coal to power stations. In this case the primary sector operates as a retailer.
Another example of such a situation where the primary sector acts as a retailer is hunting. When the hunter sells its hunt to a customer without sending it to the manufacturer, he would be operating as a retailer.

2. Give three examples of how Kellogg’s demonstrates good supply chain management. How can Kellogg’s make improvements both for its business and for the environment?

Kellogg’s company has a good supply chain management, which I can support with several examples. Firstly, to provide an effective stock inventory system Kellogg’s implement a system called “just-in-time”. By the use of the system just enough products are produced and a limited stock is kept. The company produces goods according to order to prevent holding significant stocks. Next, Kellogg’s has an efficient distribution system to prevent the distributors working with the competitive companies. The distributers place the products in stores. Waste of time and fuel happen in situations like delivering the products to a waiting customer by a half-empty vehicle. To prevent this happening, Kellogg’s works with several transportation companies. The last example is that it focuses on cost-effective systems ensures its prices are competitive.
To make improvements in both business and environment Kellogg’s should increase its revenue growth, this can happen only if the employees work in corporation to maximize the profit earned. Environmental improvements can happen if wastes are reduced at high rates. The most important waste that has to be diminished is water. Nowadays water shortage is a big problem, and if big companies and factories can reduce waste of water, this problem can lesson. Kellogg’s is a company which can help solve water shortage, because it’s a worldwide company.

3. Why is it important for Kellogg’s to build good relationships with businesses in the tertiary sector?

Kellogg’s cares about having good relationships with its retailers in the tertiary sector such as Tesco, Makro and ASDA. The retailers help Kellogg’s create a good relationship between the supplier and the customer. For example Tesco has a good display of the goods. The companies developed a Shelf Ready Unit which prevents the staff to spend a lot time for the products of Kellogg’s. It also helps the consumers to choose easily from the shelf.

4. Evaluate the benefits of large manufacturers like Kellogg’s handing over the logistical side of their business to specialist companies like TDG.

There are several advantages of handing the logistical side of businesses to specialist companies, like Kellogg’s does to TDG. TDG is a specialized in end-to-end supply chain management. By working with a professional company it makes it easy for Kellogg’s to distribute its products all around the world and concentrate/specialize on its own work as manufacturing the goods.

During the experiment, I learnt several things which led me to a discussion. I ended up as the following;

I always thought that big companies had a great stock incase something happens to their production or manufacturing, thus they have to use products from their stock. But the article revealed that Kellogg's has a stock investory system called "just-in-time" which allows the company to only have an enough(limited) stock, just to supply the orders. They also have a computerised stock holding system which alerts when the shelves are empty so the market fills them again. Therefore there is no waste of products or time.

Another thing that suprised me while completing the activity was that waste can be identified by "lean production", which is eliminates waste. It also diminishes inefficiency. I learnt that the company double checks its production methods so that everything is right and in order, so that maximum profitability can be reached by minimum cost.