Module 0-Introduction-Conducting business in the 4th industr

1.1Types of traditional business models

Below is a diagram showing the different types of business models. We won’t look at all the areas in the detail. This will give you an idea of the different types of traditional businesses and the different functions that are needed within a traditional business to make it effective.

Finance

Sales / Retailer

Franchise

Traditional Business

Marketing

HR

Operations / Manufacturer

IT

Manufacturer The manufacturer business model makes use of raw material to create products that are then sold to the market. This business model involves the assembly of pre-manufactured items. The products are either directly sold to customers (e.g. car manufacturers) or to another business to sell to customers (e.g. a wholesaler). Distributor This distributor business model buys products directly from the manufacturer. The company then sells the bought materials to customers or other businesses (retailers). Retailer A retailer business model buys products from the wholesaler or distributor. They then sell the stock to the public. For example, a shopping centre that sells food to customers. Franchise In this situation, the company buys the franchise of a successful brand and promotes the brand’s products or services to the general public. The franchise is a popular way to build awareness across the country. For example, you could have a franchise in Joburg, Cape Town and Durban. McDonald’s is an example of a very successful franchise.

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