The concept of business models is well known, in summary, it is the expression of how a business makes money. It always involves a matrix of revenue generated, the fixed and variable costs of generating that revenue, and the choices that the business makes about its customers and how they will be serviced, and the way they incur the costs of that servicing.
Supermarkets are a great example of a number of seemingly similar competitors that have slightly differing business models. At a macro level they have strong similarities, relying on volume, price, and shopper numbers to succeed.
1. Revenue generation. Supermarkets generate revenue on both sides of the equation.
2. Cost management. Supermarkets work on very low percentage margins, relying on the volume to generate the cash margins.
Insights on managing FMCG and related businesses (Groceries, Supermarkets, Hypermarkets, Wholesalers) from Ameen Ahsan Strategy Consulting (AASC).
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