Business Model Canvas - Assignment Example

Business Model Canvas First of all, the company I have chosen is Groupon Task segments i) For whom are we creating value? We are creating value for people who want to access products and services at discounted rates. ii) Who are our most important customers? Our most important customers are individuals and companies who want to access and sell products and services. In this regard, we aim to bring value to customers while helping businesses grow and expand. Essentially, we act as a middleman, a kind of retailer that links consumers with businesses. Hotels, retailers, restaurants and other businesses are connected to customers through us. The most important point, however, is our ability to create value for customers (Wübben 35). Value propositions i) What value do we deliver to the customer? We make it easy for customers to access products and services at discounted rates. ii) Which one of our customer’s problems are we helping to solve? We save customers the hassle and time involved in looking for bargains. In essence, all one has to do is to join our website and gain access to a multitude of services and products offered by thousands of businesses (Papadopoulou 16). iii) Which customer needs are we satisfying? The need to find bargains online with the utmost ease. iv) What bundles of products and services are we offering to each customer segment? We have bundles consisting of (but not limited to): airline tickets, hotel and restaurant vouchers, and a wide range of merchandise (ranging from mobile phones to clothes). We also have utility services like cleaning, and just about any service in almost all service industries (Osterwalder, Pigneur & Clark 56). Channels i) Through which channels do our customer segments want to be reached? Mostly the internet (70%) and mass media (especially television). ii) How are we reaching them now? We have already perfected the art of online marketing which forms the core of our customer outreach strategy; this is what we use. Television is also a channel we have taken maximum advantage of. iii) How are our channels integrated? Channels are viewed as part and parcel of our services. They are present in all the efforts we make in order to reach our customers (Zimmerman & Deborah 19). iv) Which ones work best? The internet v) Which ones are most cost-efficient? The internet and radio. Television reaches a lot of people but it is expensive, therefore losing out to the internet and radio. vi) How are we integrating them with customer routines? The reality is that our customers do not have routines. The reason for this is that we are an online service, therefore it is impossible to work out customer routines. What we do is make sure that the channels are available 24/7, all-year round. You never know when customer X or Y might decide to log in and search for a particular service or product (Osterwalder, Pigneur & Clark 56). Customer Relationships i) What type of relationship does each of our customer segments expect us to establish and maintain with them? A customer service and support relationship and a marketing relationship. ii) Which ones have we established? We have established all the above mentioned relationships. iii) How costly are they? They are very costly. Adequate and well-motivated support staff, appropriate software and good management skills are required, and these are pricy. iv) How are they integrated with the rest of our business model? Our business is service-based and involves a lot of interaction and communication with customers, therefore the customer service relationship is employed as a tool for making communication and interaction possible. The marketing relationship helps the company track deals, responses, clicks and leads, which are the core aspects of our business. Revenue streams i) For what value are our customers really willing to pay? Fast, efficient, quality, and responsive services involving advertisement, transaction fees, co-marketing, and unit and volume selling. ii) For what do they currently pay? All the values mentioned above. iii) How are they currently paying? There a number of online payment methods available. These include PayPal, Payoneer, credit cards, and Moneybookers. iv) How would they prefer to pay? The systems mentioned above are the most common and preferred payment methods for most customers, and we have all of them. v) How much does each Revenue Stream contribute to overall revenues? In 2011, our overall revenue was $1.610 billion. Transaction fees contributed over half ($950 million) advertisement $350 million, unit and volume selling $210 million, and co-marketing $100 million. Key Resources i) What key resources do our value propositions require? Human and financial resources. ii) Our distribution channels? We are an internet-based company so distribution channels do not apply. iii) Customer relationships? Human resources. iv) Revenue streams? Financial and human resources. Key Activities i) What key activities do our value propositions require? Linking customers and businesses, sourcing for clients and conducting marketing campaigns to reach customers (Edelman & Sonia 52). ii) Our distribution channels? Not applicable. iii) Customer relationships? Communicating with customers, and offering support services like tracking their progress once they join the company. iv) Revenue streams? Just management, generally. Revenue streams have to be managed so as to make them sustainable. Key Partnerships i) Who are our key partners? Major League Baseball, eBay, Bravo (cable television network), among others (Wolny 105). ii) Who are our key suppliers? A couple of companies that provide technological solutions and products and stationery suppliers. iii) Which key resources are we acquiring from partners? Support services that help us branch out and explore new markets, and financial support. The most important “resource” we gain is exposure. iv) Which key activities do partners perform? Marketing and advertising our company and products on our behalf, as well as providing financial incentives when needed (Chiu 28). Cost structure i) What are the most important costs inherent in our business model? Human resource costs (in terms of wages and recruitment), internet costs, and maintenance services. ii) Which key resources are most expensive? Human resources and internet costs. iii) Which key activities are most expensive? Marketing and advertising Task 2 The business model I would associate with Groupon (to an extent) is the free as a business model pattern. Although its services are not free per se, the only point a registered customer is charged is if he/she decides to purchase a product or service by buying a deal. Essentially, all other services on the website are free until a customer decides to purchase a product or service. Also, there are no subscription fees, and one can be a registered member and still retain membership even if he/she is not buying anything. For instance, it is free to browse the site, check on available deals without paying anything. I am therefore convinced that the free as a business model is the closest model Groupon identifies with. Works Cited Chiu, Jessica Chi. Social couponing Groupons influence on brands. Austin, Tex.: University of Texas, 2011. Print. Edelman, Benjamin, and Sonia Jaffe. To Groupon or not to Groupon: the profitability of deep discounts. Boston: Harvard Business School, 2010. Print. Papadopoulou, E.. Word of mouth motives in collective buying business model case study of x discounts. Boston: Harvard Business School, 2010. Print. Wolny, Philip. Andrew Mason and Groupon. New York: Rosen Pub., 2013. Print. Wübben, Markus. Analytical CRM developing and maintaining profitable customer relationships discounts. Boston: Harvard Business School, 2010. Print. Zimmerman, Jan, and Deborah Ng. Social media marketing all-in-one for dummies. Hoboken, NJ: Wiley, 2013. Print. Osterwalder, Alexander., Pigneur, Yves., & Clark, Tim. Business model generation: a handbook for visionaries, game changers, and challengers. Hoboken, NJ: Wiley, 2010. Print. Read More