Busineness Model

A local business whose services I frequently use is Wal-Mart. The main components of this company’s business model are business commerce, occupation, and organization.

The local company whose services I frequently use basically uses the business system. Business commerce is first. The definition of business commerce is the process through which people produce, exchange, and trade goods and services. Wal-Mart provides a service that allows the people a variety of products to purchase at a low price. Trade is involved here because people exchange products using money, to fulfill the people’s needs and wants. Business occupation is the acquired set of specialized skills and abilities that enable a person to create valuable goods and services. Wal-Mart tries to excel in their occupation to profit from the customers, so that they can increase their personal wealth. Next is business organization, in our text it says that this is the system of task and authority relationship which coordinates and controls the interactions between people so that they work toward a common goal. Wal-Mart has to hire people to do a job and in return the people hired get a salary. The people (employees) are assigned a task in exchange for their salary so that the company and its employees can work toward a common goal. Wal-Mart uses the business organization to reduce transaction costs and in the end it results in the production of larger quantities of the products. This increases the profitability of the company. It is important for the company to have business organization because then the company can pursue new opportunities and create profitable goods services for the people.