Discuss The Business Model For Soybean Oil Production
For any business to thrive, the business model of the specific business must be structured so that it is easy for them to scale up and undertake their business obligations effectively. This is the same for any soybean oil production business.
There are many different business models an effective soybean oil production business can take. For example, the business can employ a B2B model, essentially a business-to-business undertaking. On the other hand, soybean oil production can try a business-to-customer model, or B2C, which is almost always the case. Unlike B2B models, where businesses trade with each other, a B2C model directly addresses customers.
One other business model soybean oil production can take is a franchising model. In a franchising model, businesses can buy the intellectual property and trademark of an existing soybean oil production company and trade with them. This allows them to enjoy the benefits of an already established business. The article discusses how to structure a very effective B2C model for soybean oil production.
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Essential Elements of the Soybean Oil B2C Business Model
While there are different B2C businesses, the direct sellers model is one of the best ones that can suit soybean oil production. In such a model, the business manufactures and sells its product. By consolidating market control at every level of the market chain, the soybean oil production business can maximize profits and reduce its variable costs. Additionally, consolidating production in the different levels of the market results in significant economies of scale, leading to high profits even with low-profit margins.
Raw Materials
In such a business model, there are different essential elements. Firstly, the soybean oil production business must first control the productivity of the produce. For this to work, the business must have its soybean farms. Many arable lands have been dedicated to soybean farming in the United States. Therefore, it is not very difficult to farm one’s produce and obtain a very high soybean oil yield. This ensures that the business has raw materials for production at any given time.
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Production and Manufacturing
The next element of the business model, which is instrumental for production, is the manufacturing level of the production chain. At the manufacturing level, there are different aspects to consider. These include the chain of command regarding management, human resource management, and the employees who shoulder the bulk of the burden in the organization.
Management
An effective business model for production is the hierarchical model, which ensures that every level of the organization has responsibilities that must be undertaken for the connection to thrive. In a hierarchical model, the organization’s management all have specific individuals who work beneath them. These individuals at the management level are responsible for the division of work and enforcement of work standards. They also ensure that everything is done as expected through regular supervision.
Human Resources
Human resource management is responsible for hiring and recruiting workers and orientation and assimilation into the organization. While there is also a hierarchical organization for human resource management, the human resource team members are strictly part of the organization’s general management as they represent the hiring and enforcement element of the business.
Factory Production Employees
The factory production employees are the people responsible for the actual production of them being soybean oil. In most instances, the factory workers are workers with either apprenticeship skills or hands-on skills for handling the equipment in the factory. These employees walk the machines through creating premium quality soybean oil. Aside from the production employees, there must also be employees such as accountants and others who can manage their equipment to ensure that there is no downtime and that all records are kept effectively.
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Sales and Marketing
The sales and marketing department in the soybean production business is responsible for marketing and selling the products as manufactured in the organization. The marketing department focuses on developing strategies to build brand awareness and publicity for the various products the company produces. The marketing department also considers different techniques through which customers can sample or use the products for a time and give their reviews. This is part of market research.
On the other hand, the sales team ensures that the product is well placed in different stalls and shelves in supermarkets and that consumers can access them readily. Having an in-house sales and marketing team is beneficial and cuts many costs. However, you can also opt to outsource sales and marketing to an established organization with vast experience and workforce to handle an effective sales and marketing campaign.
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Final Words
After considering the various departments illustrated above, you can have a very effective system that consolidates market control at various market and production levels. With raw materials obtained from your own farms, you can save on the costs you would spend outsourcing raw materials. Additionally, having your distribution channels through an effective sales and marketing regime ensures that the soybean oil you produce reaches the market directly from your distributors. This results in large economies of scale, equating to high profits.
Thank you,
Glenda, Charlie and David Cates
