Top easy-to-succeed business models and effective management methods

A business model is important for every business. It helps new businesses attract investment and motivate employees. For established businesses, the model helps them predict current and future trends and challenges.

The current business model includes the following main components:

• Product/service: This is the core part, providing value to customers and generating revenue.
• Customers: The business model needs to clearly define the target customer. This helps the business focus on developing and reaching customers in the best way.
• Distribution channel: This is the method that a business uses to bring its products/services to customers. Including retail stores, websites, agents, mobile applications, business partners, etc.
• Competition: A business model needs to analyze and understand the competitive market to come up with appropriate competitive strategies. This helps the business have a competitive advantage over its competitors. 
• Cost structure: Identify the costs involved in producing a product or providing a service. This helps a business manage its finances and price its products appropriately.
• Revenue: Identify potential revenue sources and customer acquisition methods to generate revenue. Revenue sources include sales, advertising, subscriptions, renewals, commissions, etc.
• Partners and resources: The business model may depend on establishing relationships with partners. At the same time, the model leverages external resources to accomplish business goals.

Top 10 popular business models today

Each business will apply a different business model. Here are the 10 most popular models:

B2B2C retail model

B2B2C (Business To Business To Customer) is a cooperation model between two business units (B2B) to bring products to the end consumer (B2C). This model takes advantage of the advantages of both models to optimize the business process. For example: Retail stores, agents, distributors will purchase goods from suppliers on a platform to retail to consumers. 

Franchise model

In this model, the franchisor provides business licenses, training materials and support to the franchisee. Including manufacturers, distributors, retailers, etc. The franchisee will pay royalties to use the brand name and sell the franchisor's products and services. In addition, the franchisee may also have to pay a percentage of revenue depending on the agreement between the two parties. For example: Chang Hi Tea, Ma Hai Fish Cake Bread, Trung Nguyen E-Coffee, etc.

Agency Model

Agency companies specialize in consulting and providing marketing and communication solutions for other units. They are experienced, well-trained experts and have the ability to create effective communication strategies.

The development model of a simple agency can be described as follows: 

• Build a steady pipeline of leads.
• Establish a professional team to manage and operate projects.
• Grow the agency through expansion and building next projects.

Online business model

The online business model is becoming more and more popular and vibrant in the era of technology development. This form of business is often carried out on platforms such as social networks, e-commerce platforms and websites. The online business model has many advantages over the traditional model. Including:

• Staff costs, cash costs are saved.
• Reach customers with a wide range.
• Customers can choose and pay more conveniently.

The online model is considered convenient for both sellers and buyers. Sellers can start their business easily and reach potential customers. Buyers can shop anywhere, anytime. This is the reason why online sales are considered the trend of the present and the future.

Affiliate Marketing Business Model

Affiliate marketing is a way to make money by advertising and introducing other people's products/services on online platforms. Marketers will receive a percentage of commission when customers click to buy or view product/service information through the link they provide.

For example, KOLs/Reviewers on Facebook, TikTok, etc. earn commissions by introducing products on the Lazada and Shopee e-commerce platforms. They attach the marketing product link to the article or video. When someone clicks to buy or view the product through the link. At this time, they will receive a commission from the product/service provider.

Education business model

This model is a niche product-based business model in the education sector. The business operates by combining the Freemium model and the subscription model. A typical example is the ELSA English application – an online English learning application. Users can download and learn some basic lessons for free. However, to have access to more lessons and use advanced features, users will need to subscribe to the medium paid version.

E-commerce business model

This model takes advantage of the internet, allowing buyers and sellers to connect and conduct transactions through online stores. In Vietnam, there are a number of e-commerce sites that have successfully applied this model such as Tiki, Sendo, Shopee, Lazada, …

Subscription business model

There are usually two types of subscription business models:

• Sign up to buy once and use the product for life
• Sign up to purchase monthly/yearly services/products.

For example, Netflix, Amazon (with its Prime service), and LinkedIn have used subscription models to generate revenue. However, to retain customers, businesses need to continuously provide new products/services or practical content.

Profit model from accompanying products

This business model focuses on creating customer passion for a specific product of the business. Once they have created interest from consumers, businesses will take advantage of the opportunity to cross-sell products of higher value. 

Freemium Business Model

This model is very popular among businesses that offer Software as a Service (SaaS) products. It works on providing free usage along with a paid service. The product can be free for a short period of time or only some basic features can be used. To continue using it for a long time or to have access to advanced features, customers will have to pay a fee.

For example, the Hanzii Dict Chinese dictionary app offers a free version with features like lookup, translation, and creating review flashcards. Once users upgrade to the paid version, they will have access to additional features such as learning statistics, ad removal, HSK test preparation, advanced specialized idiom handbook, etc.

Steps to build an effective business model

Building a business model plays an important role in orienting and creating a development strategy for the business. To build a business plan, you can refer to the following steps:

Step 1: Build a business model idea

The first step is to develop a creative and viable business idea. This idea must meet a market need and provide value to customers. To do this, you need to do the following:

• Market analysis: Identify current market needs and trends.
• Research your competition: Learn about businesses operating in the field you're interested in.
• Assess feasibility: Consider the resources and knowledge you need to implement the idea.
• Find a difference: Identify the strengths and differences of your idea compared to competitors. This will help your business be different, unique and attract customers.

Step 2: Set business goals

After developing a business idea, you need to set clear and specific business goals. Business goals need to be divided into different stages. Including long-term and short-term stages and at the same time ensure that they can be measured by specific numbers. For example, the number of products sold, revenue, profit, etc. The steps you need to take include:

• Define goals: Set specific, clear business goals for each stage of business development.
• Action planning: Identify specific actions that need to be taken to achieve the set goals.
• Monitoring and evaluation: Regularly monitor progress and evaluate results to make timely adjustments.

Step 3: Market Research

Market research plays an important role in helping businesses better understand customer needs and the factors that influence their purchasing decisions. This process includes:

• Customer needs analysis: Identify target customers, their needs and wants.
• Competitor Assessment: Learn about current and potential competitors and their business strategies.
• Identify challenges and opportunities: Assess external factors that may affect the business. Including market, legal, technological, economic, and social trends.

Step 4: Set up the SWOT model

The SWOT model is an important tool that helps businesses analyze their internal and external environments to identify their strengths, weaknesses, opportunities, and threats. The steps include:

• Strengths Analysis: Identify internal factors that give a business a competitive advantage.
• Weaknesses Analysis: Identify internal factors that hinder business growth.
• Opportunities Analysis: Identify external factors that the business can take advantage of for growth.
• Threats Analysis: Identify external factors that could harm the business.

Step 5: Build a business model and implementation

This is the most important step in turning your business plan into reality, and includes the following steps:

   ​Business model orientation: The business determines how it operates and creates value for customers.

• Detailed planning: Develop detailed plans such as marketing plans, production plans, human resource management, financial management, etc.
• Implementation: Assign tasks to specific departments and individuals. At the same time, ensure that plans are divided closely and effectively.
• Evaluate and adjust: Continuously evaluate results and make adjustments if there are small errors. This is to ensure that the business operates effectively and meets customer and market needs.

A business model is a foundation that needs to be built to achieve success for every business. Therefore, you need to consider, research carefully and take solid steps.