Joan Magretta carries the idea of assumptions into her focus on business modeling, which encompasses the activities associated with both making and selling something. Businesses make assumptions about who their customers and competitors are, as well as about technology and their own strengths and weaknesses. Instead, Drucker’s theory of the business was a set of assumptions about what a business will and won’t do, closer to Michael Porter’s definition of strategy. Many people believe Peter Drucker defined the term in a 1994 article as “assumptions about what a company gets paid for,” but that article never mentions the term business model. Previously, the approach is ‘to sell what is produced’, but now the approach is ‘to produce what is demanded’.A look through HBR’s archives shows that business thinkers use the concept of a “business model” in many different ways, potentially skewing the definition. it has been turned from producer oriented activity to consumer-oriented activity. Further, commerce encompasses two types of activities, trade and auxiliaries to trade.įrom the past few years, the entire concept of business has undergone a drastic change, i.e.
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