97 Understand Your Model
A thorough understanding of your firm’s business model is necessary for formulating and implementing strategy. The business model of an organization encompasses the realities that determine the profitability of the firm: volume and revenue, costs and profitability, and capitalization.
Volume is the driving force of a business model. Sales volume translates internally into the resources needed to deliver the expected amount of goods and services in a timely fashion.
Revenue is the result of volume and prices. Pricing strategies are generally among the most important decisions management makes, because they not only determine unit revenue but also impact the number of units sold and, hence, total revenue. Pricing is a crucial ...
Get The Complete New Manager now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
