Business model and industry analysis

Business Model 1：A Classical Processing business Model for metal-processing industry in China

Explain:

How to make profit?

Metal-processing company make profit from offering processing services for other industries’ products.

Requirement for starting：

You can apply or buy the license with permit of government if you have strong political connection with government.

Ownership：

You have 100% ownership with this factory.

Advantage：100% ownership,make it in control.You can see your money back once you finish the orders.

Disadvantage：High risk of market trends,You do not know how many orders you will receive or the products you processed is popular or not.Large amount of investment for starting business and updating treatment equipment every year.

For example,The advantage of cheap labor no longer exist in China and market prize of products vary quickly.You may make a large profit or lose your money caused by shortage of orders.So,there is a risk of marketing there.

Requirement :

Talk about this business model.How this classical processing business model make profit?what are the advantage and disadvantage?

Who is your customer of metal processing industry,For example:Car bearing manufacturer,lighting company?What are their requirements?

3While your company,a metal-processing company in China.Offer processing services to your customers.what kind of problems you may face?For example.overdraft from your customer,quality of processing, technology is not good?high cost of updating treatment equipment??Government issues to pollution company?