Answer the following:
1. Business Model Innovation
2: Pankaj Ghemawat: CAGE framework to evaluate international trade opportunities
1: Business Model Innovation
The proper business model deals with the innovative plan that company considers. Business innovation models are only be done by the existing product which is made from technology existing in the running market. The proper business model is done with the continuous innovation of the company that helps them to run successfully for a long period. Innovations are mainly done by three methods, these are getting the innovative ideas that are not introduced before by anybody, the company successful running depends on the huge investment or resources and production of new innovative technology needs a wide range of gap. Innovation usually increases the value of a customer in a product or decreases the cost of the product. A company usually tries to gain their competition rate in the competitive market by proper implementation of techniques and skills in the business model. Taking the case of company Apple makes a huge investment in the new innovative technology to fulfill the demand of customers. Customers highly value with the innovation technology such as the company Dell tries to reduce the cost the product and service. Innovation mainly depends on providing the good customer service by increasing product sale and minimizing the production cost rate. A business model is mainly done by satisfying the target of the customers, facilities offered to customers, creating of the valued position and for generating of revenues. Adoption of innovation model in the company such as razor and blade techniques help the customer to accept the product easily having different features (HSGUniStGallen, 2013).
By taking the company of Gillette as an example, that gives the customer with a product of Razor and Blade Pattern gives a new idea of innovative planning in the business model. As the company Gillette launched from 1904, must know different innovative technology implemented in their products. Gillette Company’s innovative ideas must be as such that the customer can get the razor at a cheaper rate as compared to buying of blades. These innovative ideas help to grab the competitive market and can reach the customer demand easily. Espresso makes a coffee winding machine at a cheaper rate but the coffee is bit expensive. Espresso is taking the innovative techniques just like the Gillette. Proper innovative ideas are required for the good running of the company so that they can hold up the existing market. Innovation is getting ideas from other and making it cultivate in their own company. Espresso uses the innovation technique like the Gillette having the innovation technology. The proper ideas in the technical fields help to reduce the production cost and huge profit results for the betterment of the company. There are certain assumptions to keep in mind for the proper business model planning. Organization technicians must cultivate new innovative technique to give the best result in the business model. Customer demand will create for building up of new innovative ideas. Therefore, innovation of business model does not depend on a unique idea but also improvising of new innovative techniques and proper planning in their own business.
2: Pankaj Ghemawat: Cage framework to evaluate international trade opportunities
CAGE distance framework is the distance differences between many countries in which the organizations identifies the strategy in international level. It helps to understand the trade opportunity, flow of the citizen, finance and the wide information. Pankaj Ghemawat made CAGE framework. CAGE distance is a small framework that is based on the economics of trade in between two countries. In the CAGE framework, there are few abbreviations such as C stands for the Culture; A stands for Administrative; G stands for the Geographic and E stands for Economic having the general ideas with the trade between two countries (Carlson School of Management, 2015). It is based on the international strategy which is influenced between two countries and having the proper idea of framework cage. It also focuses on the culture of the country including languages, caste, and the ethics. In the bilateral country, CAGE framework lacks trust of the community, lacks the currency of the country, and lacks trading in the regional area. In an economic distance of bilateral country makes a huge difference between rich and poor; differences in natural resources standards; differences in monetary resources; differences in data resources. In the unilateral or multilateral country have the CAGE framework in the distance of culture is narrowness between the communities. In the distance administration there is a bias difference between foreign and home country; lacks groups in an organization in international level; it also lacks corruption between two countries. In distance of geographic it lacks huge difference in transportation and less communicating medium; lacks with the interior navigation. Distance in the CAGE framework for economic lowers the rate of income.
Country of Canada and Mexico makes a CAGE framework by evaluating of the international trade opportunity. It is all about the impact of a company between the unilateral and the bilateral countries. These influence cause for risk to grab the foreign market and if this risk is solved properly then a huge profit can be earned from both the countries. The US is the largest trading in the bilateral country. CAGE framework analysis the impact for the distance and provides dimensions that helps to earn for the huge earning of profit in the foreign market. Increased profit rate of the product increases the consumer's demand in the country. In the country between Mexico and Canada, the organization can grow up more with the bilateral trading It will grow up the dimensions while the analysis is done with the bilateral and unilateral company. It improves the growth rate keeping the cultural value in mind of their particular country. Government supports the CAGE framework having the opportunity in the trading with the bilateral and unilateral country. By getting the foreign currency, the country can grow up more in economically and socially. Therefore, a proper CAGE framework is required for evaluating the international trade opportunity between two countries.