Anticipatory Business Models
Firms use two business models to respond to their customers’ needs. These models are anticipatory and response based method. Each method is unique and has its advantages and disadvantages. The major difference that distinguishes the two arise from each other is timing.
The anticipatory business model relies on forecasting and was commonly used when data on consumer behaviors and trends was not available. This meant that business people and manufacturers had to rely on predictions that the sales department used to make. These created problems because people involved in the distribution channel came up with different estimates creating excess inventories in the system. This was an indicator that it was very possible to estimate wrongly the customers’ requirements. This probably would lead to loses to the businesses (Dadzie, & Winston, 2007).
Response method relies on actual sales data to make projections about the customers’ requirement. This is achieved by sharing sales information by those involved in the supply chain. This information is then used to make projections about customer requirements. This ensures that the needs of the customer are properly and reliably catered for, as those in the distribution and supply chain easily share the information regarding their needs. With the development of information technology, it has become very easy to share information eliminating the need of making flawed assumptions. This has lead to higher satisfaction levels amongst the customers and lower costs to the businesses (Aastrup et al 2008).
The response method is popular amongst suppliers and producers of consumer goods such as beauty products that receive different views amongst the consumers. This is important because it enables them supply goods where there is a high demand eliminating the transport costs that could be incurred in areas where the products are not in demand. This enables them maintain a constant supply at minimum cost (Rossel, 2010).