By | Regina Thomas
A pure-play is a phrase used by investors to describe a publicly listed firm that concentrates its efforts and resources on a single line of activity. As such, the performance of its stock is strongly correlated with that of its industry or sector. A pure-play is a business that concentrates only on a single line of business. These are distinct from diversified businesses, which have a wide range of product lines and income streams. Pure plays have simple cash flows and revenues and often serve a specialized market. Pure plays often do badly in weak markets and carry a greater level of risk. The following are some of the primary advantages of a pure-play company.
1. Simple management procedure.
Due to the company’s narrow concentration on a single line of business, it is simpler to manage. A business process is a series of interconnected activities that culminate in delivering a service or product to a customer. Additionally, a business process has been described as a collection of actions and tasks that, when completed, achieve an organizational objective. The core business is comprised of operational processes. One advantage of simple business management is the ease at which you can develop business flows. And the rationale is straightforward: when properly designed, it is intuitive to understand and practical to produce and present to different levels of the company.
Not that the job is easy or trivial. On the contrary, developing an effective business process flow diagram that is helpful for understanding, mapping, and eventual process improvement requires considerable effort and skill.
2. Ease of analysis
Business analysis is a job that requires the application of ideas, expertise, and information to identify business requirements and solutions. Business solutions are intrinsically linked to business needs, such as user requirements, their characteristics, usefulness, resources, and so on. Many business methods emerge for each of these business issues. The majority of the successful individuals are business people. You can also learn to be an entrepreneur by researching how to start a business online on a variety of different platforms.
The process enables a better understanding of the organization’s capabilities and vision (purpose). It enables the organization to respond to what it wishes to accomplish and implement these actions through strategies and tactics.
3. You are in the business of providing value-added goods
For companies, the idea of added value is critical. Businesses that offer more value to their goods and services may charge their consumers more, which results in more income. This is because they offer more value to the same product than the other businesses.
When it’s tough to distinguish your solution from the competition’s, you often win by providing additional services, or Value-Added Benefits, to your customer. These are supplementary services that you offer and your main product or service at a fee to the customer.
Each market is unique. It may be due to variations in consumer preferences, local carriers, and payment or return policies that vary by nation. Consequently, many pure-play retailers choose to utilize a standardized set of fulfillment criteria, dubbed a ‘template,’ that they can ‘copy and paste’ from area to region. This enables them to grow more rapidly. However, the fulfillment logic must be customizable for each area. In this manner, you may benefit from economies of scale while still meeting regional requirements.
5. Distributional expansion
When you begin as a pure-play retailer, you usually operate from a single Distribution Center. However, as you expand, your fulfillment requirements increase. Certain shops will opt to extend their operations in the same area. However, if you have several distribution centers located across the country, you may keep your goods closer to your consumers.
Drop Ship Vendors are popular for two reasons. They enable you to increase your product offering as well as your fulfillment capability. Additionally, it enables you to test new items without paying for inventory upfront. It’s a win-win situation. However, while using DSVs, you must maintain a large amount of data in sync. This includes, but is not limited to, inventory data and order status. And the situation may get much more complex when it comes to refunds.
If you have the same stock in several locations, you’ll want to ship from the most advantageous location to optimize order routing and maximize profit on each order.
In the retail and eCommerce worlds, the term “pure-play” is becoming more popular. New ‘online-only businesses are eroding the market share of established brick-and-mortar shops and are often expanding at a tornado-like pace.