Strategic Decision Making Underwater Hotel Essay

Strategic Decision Making Underwater Hotel - Essay Example However, other elements, particularly the individual actions that supported the goals and objectives of the model, are deficient. Components like cost structure or key activities are also ill-placed, especially when the model should provide a logical and structured framework where the hotel’s characteristics and potential can be clearly converted into economic outputs. (Chesbrough, 2011: 94) This must have been what Neely (2007: 200) had in mind when explaining how a model improperly grounded in the performing unit as a phenomenon will most likely overlook the variables that influence how the system functions. Because of these cited weaknesses, the business model will fail in the areas of theoretical and operational coherence. To address this, an improved framework should be adopted. An appropriate framework is outlined below. Fig. 1: Suggested Framework (Osterwalder, 2009: 44) The model shown above has been perfected by Osterwalder and could actually be modified into several other versions to accommodate the differences in both components and objectives. What the model offers is not only an effective framework description, but also the capacity to be flexible and envision alternatives. Hence, this particular model can optimize processes for underwater hotel ventures and its objectives, especially in the long term. II. Integration of the Business Model In terms of integration, the business model is quite efficient. The framework outlines clear practices and activities as well as future objectives and visions. This strengthens the business model, especially considering the fact that the venture is entering into the market for the first time. However, as has been previously cited, the model—in effectively integrating components—must provide nodes to depict their relationships and connections. Jaakola, Kiyoki and Tokuda (2008: 154) identified this as the node structure, an element in business models that explain processes such as value creatio n and business transactions. III. Feasibility of the Business Model Elements unique to a business model add to the complexity of how framework should be examined in the context of its feasibility. The most important criteria, however, is economic viability. This should made a crucial precondition, because without it there is no reason for existence, as the project being undertaken cannot be supported by the market. The project, as defined by the business model, should be profitable. What this means is that rewards must either equal or surpass the expectations of diversified investors on a risk-adjusted basis from investments made and resources consumed (Johnson, 2007: 42). Currently, the business model lacks value-added development and thus misses out on the profits available. Another important aspect in a business model is the way it creates value or shared value among business partners. According to Vermeulen and Cotula (2010: 35), there are four criteria that should be used to de termine how a business model shares value: 1. Ownership of business equity shares 2. Ability to take part in decision–making process 3. Commercial risk and other types of risk such as political and reputational risks 4. Sharing of economic costs and benefits and other financial arrangements All of these variables are related to each other. One may be linked or is responsible for the existence of another. Nonetheless, these elements collectively bring about value and, hence, must be present in a business