Pick an end goal for your business. If you plan to keep your business write down what your business will look like and why. For example, you way want a lifestyle business (https://www.entrepreneur.com

CASE 6 3

Case 6

Name:- Reem Alogaidi

Class:- ENTREPRENEURSHIP

Institution:- Eric Westreich

Date:- 13/06/2020

Case 6

Cost Structure

A cost structure is the specific expenses and costs that an entity will incur while operating a specific business model (youtu.be). Ninety per cent of companies fail in the first three years because they failed to understand their expenses or what it will take to develop the goods/services they have indicated in the value propositions. It is, therefore, important for companies to evaluate and understand the cost of developing and delivering their value propositions, creating revenue and focus on customer relationships.

There are two major categories of cost structure: cost-driven and value-driven structure. Cost driven structure focuses on keeping expenses and costs down. A value-driven structure, on the other hand, focuses on creating more value in the product. Green Drive Logistics Company will embrace a cost-driven structure. The company will use outsourcing and automation to keep costs low. We believe by keeping the costs down, we will gain a competitive advantage in terms of pricing like McDonald's and Walmart.

The company’s cost structure will have the following attributes: economies of scope, economies of scale, fixed costs, and variable costs. Economies of scope signify cost savings that the entity will enjoy as the scope of its operation grows (Belyh, 2015). Economies of scale, on the other hand, signify cost-saving that the entity will enjoy as it grows. Fixed costs are the costs that the company will incur despite the volume of the products/services. Variable costs, on the contrary, are the costs that vary relative to the volume of products/services produced.

Before deciding on the kind of cost structure that the company will embrace we considered the following aspects: the fundamental expenses derived from the business model, the key resources, and the key activities of the business model.

References

Belyh, A. (2015). Cost Structure Block in Business Model Canvas. Cleverism.

https://youtu.be/IP0cUBWTgpY

https://investor.fb.com/corporate-governance/code-of-conduct/default.aspx

http://media.corporate-ir.net/media_files/IROL/25/254008/cg/AppFolio%20-%20Code%20of%20Business%20Conduct%20and%20Ethics%20for%20Employees%20and%20Directors.pdf

Munim, A. (2017). 18 of the best Code of Conduct Examples. I-Sight.