Business Idea and Using Different Models and Developing - Coursework Example

Business Idea and Using Different Models and Developing By: Professor: Class: University: City: State: Date of submission: Business Idea and Using Different Models and Developing Business Idea Overview During the entire study career, the interest has always been entrepreneurship and various challenges that it presents. With time, such interest developed into a business plan and profound interest in various business models. The aim of most people, in their professional careers is to start business. Hence, it is natural try to combine their interests in the business models and the aim of starting business. Moreover, the business plan in this case is “SEO Consultant” which I found interesting but I never know much about the market niche. The project is based on my interest and need for knowledge acquisition, the focus of the project plan will be establishing the manner in which the entrepreneurs in need of starting SEO Consultant could create successful SEO Consultant model that aims to attract various customers (Murray, 2004, 157). A successful business model enables the entrepreneur, in this case is the SEO Consultant, to support various business activities financially to ensure that it has the potential growth in the size and profitability. The plan will collect the data through analysis of the existing business entities operaring within online business industry based on the longetivity, and the size, ability to generate revenue and profit, popularity, and professionalism. From the results, the business will use various elements of the business model in developing the SEO Consultant business model. Business Opportunity SEO Consultants present numerous opportunities for investment. In this case, the business will be SEO Consultant. Such businesses offer services in digital form with customers accessing such offer at their convenience: home computers. In the modern business environment, the needs of the customers are continuously changing; therefore, efficiency, reliability, and effective are important. SEO Consultant presents numerous opportunities to both the consumers and business since it reduces the cost of operation and delivery of the products and services to the customers. Moreover, the online platforms offer the customers of asking their questions without having to visit the shop; as a result, the method presents the easiest way of doing business (Casadesus-Masanell & Ricart, 2010, 201). There are different businesses that operate online such as brokerage, gambling, and entertainment, online commerce support services, and social medial networks. Business Description Considering the ins and outs opportunities associated with the search engines and skills in various platforms such as Google Analytics, the business opportunity is the SEO Consultant. Most smaller companies have not been able to realize the significance of search engine optimization (SEO) on business performance. Therefore, the role of the consultant will be educating such businesses on the power of SEO in assisting to transform organizational websites into a more SEO friendly. With such opportunity, the business will use the skills in showing other business owners methods of reading and using their analytics data properly and the methods of using their keywords and structure content in getting more traffic (Surdak, 2014, 216). Primary data from potential customer segments Customer segments assist the entrepreneur in clarifying the customer group that the target with the value proposition. For value propositions, various questions could assist in creating customer segments linked to the problem to solve and the most important customers. For the business, it will serve both business-to-business market and business-to-business. Besides, the developed business model will focus on online business in serving business entities that have not been able to realize the significance of SEO. In every customer segment, the business will establish features of the customers to assist in separation of customers. Based on the geographic segment, the segment will be region, country, and urban, demographic factors include profession and income, and behavioural factors are personality, social status, lifestyle, attitude, opinions, and values. Archetype is also an important tool while developing the market segments as it reflects the stereotypic representative of the customers (Carson, Louiviere, Wang & Li, 2003, 101). Since the business will be operating in social media platform, it will not only focus on the already established that need advertisement services but also ensure that customers get their feedback for the services various affiliate institutions offer. Business Model Generation Business model tends to describe the foundation on the manner in which the business creates, delivers, and captures the value (Osterwalder and Pigneur, 2010). According to the definition of Johnson et al., (2008), business model aims at fulfilling the potent value proposition. While studying the business model, the no consensus of a single framework is evident. However, the frameworks depicts the contents of the business model. To perform the analysis of the manner of creating a successful SEO Consultant model, it is important to choose a model framework to serve as the foundation of the analysis. In this plan, Osterwalder and Pigneur’s business model has been used as it separates model creation from the competition, which is considered advantageous. The model canvas has two parts: right and left representing the downstream activities and upstream activities of the value chain. As a result, Osterwalder and Pigneur suggested various modes of progression while working on the canvas. First, it is important the business figures out the customer segments it needs to serve then establish the value propositions it needs to offer. Then, the business has to examine the available channels of reaching the market segments and the type of customer relationships that it needs to build (Baden-Fuller & Morgan, 2010, 161). Next, the business figures out its revenue streams and ways of creating profits from the value propositions. Moreover, it is vital to examine the key resources it requires to perform key activities for the creation of value propositions and deliver them to the identified segment of the customer. Thereafter, the business needs to establish key partnerships to acquire the resources. Finally, there is analysis of the cost structure of various components to ensure financial sustainability of the business model. Customer segment Customer segments assist the business entrepreneur in clarifying the customer groups that the business needs to focus on with the developed value proposition. The target could either be one or more segments based on the number of value propositions. Customer segment is either small or big depending on the business resources to fulfil the needs of its market. As for the value proposition, some of the important questions that would assist the entrepreneur in the creation of the customer segments include what problem the business needs to solve and reasons behind focusing on certain segments. Focusing on these questions assist the entrepreneur in ensuring that he/she know the target of the created customer proposition and determining whether there are segments considered important important more than the others. These activities assist in identification of the segment to target intensively and which to ignore or invest in with lower intensity. However, it is important to note that the customer segments are based on the needs of the customers, which are closely simultaneous, to the development of the value proposition. The business will use a multi-sided approach or diversified approach in market segmentation in serving the unrelated segments of the customers. Value propositions The SEO Consultant will offer its value proposition to specified segment of customers. The value proposition consists of mixed products and services meant fulfil the needs of the customer segments. Moreover, it is the major factor deciding when the customers choose a given SEO Consultant over the other. To ensure effective development of the value chain, it is important to identify the problem and establish the ways of solving it. The value proposition for the SEO Consultant are free search engine for the potential customers and offering advertisement platform for its potential customers (Adwords) which also forms the basis for the business’ marketing strategy. Moreover, the value proposition also allows the likelihood of to search direct advertising through the website and receive financial compensation every time the customers click on the Ads through the Adsense. Channels The channels tend to define the manner in which the entrepreneur would communicate with the identified segment of the customers and ways of delivering the value propositions. There are three channels for consideration: distribution, sales, and communication channels. The distribution channels cover the manner in which the value proposition of the SEO Consultant reaches the market segments. Such channels require consideration on the relations between various intermediaries and which of them needs to be involved to reach the market segments. The SEO Consultant could act as an intermediary between the business and consumers depending on the value proposition. The sales channels define various ways in which the business will sells the created value propositions to the customers segments in a profitable manner (Chesbrough, 2010, 357). According to the model, sales channels consist of web sales and sales force. Communication channels decide the methods of communicating the value proposition to the customer segments. Communication channels include offline marketing such as public relations, direct marketing, personal communication, events, and sponsoring and online marketing such as Google Ads, search engine optimization, social media optimization, and Google Adsense. Customer relationships Customer relationships are the mechanisms that the business will use in establishing effective relationship with the identified customer segments. Within the SEO Consultant, the most critical methods to build customer relationships are building trust and credibility, customer service, and adequately allowing the customers to evaluate the developed value proposition through reviews and rating. Customer services include support systems such as email support, chat, telephone, frequently asked questions (FAQs), and help forum. To build trust and credibility, the business needs to focus on elaborating business information, focusing on the quality and trust seals, and provision of both transaction security and legal information. Revenue streams Revenue streams are methods that the SEO Consultant will use in generating income from the identified segments of customer. Within the SEO Consultant, there could be numerous revenue streams due to differences in the segments of the customers. However, some of the identified segments might not yield the desired revenue; the model allows subsidization using the other segments. For example, Freemium business model for e-merchant enjoying bigger segment of the customer but non-paying (George & Bock, 2011, 107). For this plan, the revenue stream is traditional sales of services that involves selling the service either physically or digitally to the customer segment at a high price compared to the total acquisition cost; hence, the profit. Key resources This is the most important element as it ensures effective development of the whole business model. The element represents the resources required for the creation of value proposition, reaching various segments of the market, building effective relationships with the customers, and revenue generation. According to Osterwalder and Pigneur (2010), there are categories of key resources including physical, financial, human, and intellectual. Key activities Key activities are the most important activities associated with the SEO Consultant, which it has to undertake to ensure functionality of the business model. With the key resources, the key activities could differ depending on the type of the e-merchant and associated business concept. To develop the key activities of the SEO Consultant, it is important to define the activities associated with value proposition, channels, revenue streams, and customer relationships. For the SEO Consultant, the key activities include online marketing to attract the customers to various products and services offered based on the results rather than exposure, organizing various logistic elements to ensure adequate delivery of the value proposition to the customers, designing the website properly as it determines the level of impression. Key partnerships The element represents various partners and suppliers that the SEO Consultant requires to ensure adequate functionality of the business model. According to Osterwalder and Pigneur (2010), there are four partnership methods. These partnerships include strategic alliance that involves the non-competitors; joint ventures in which the partners have shares in a venture; “co-opetition” which involves corporation between the partners; and buyer-supplier, which is a traditional vertical relationship that occurs between the business and the suppliers. Moreover, there are three reasons why the business needs partners: optimization and economies of scale, acquisition of particular resources and activities, and reduction of risk and uncertainty. Cost structure Cost structure contains relevant costs within the SEO Consultant to ensure that the business long term sustainable. However, the cost depends on the other components of the model especially the resources, activities, and partnerships considering that the contents of these elements are large and constitute things, which have to be acquired. In the SEO Consultant, the focus will be both costs driven. Cost driven models intensively focus on minimization of the costs to offer the customers products at the lowest prices. Therefore, the models are based on the low-price value proposition, outsourcing, and automated process. In cost structure, important elements are budgets including setup costs budget and operational cost budget. Osterwalder’s Canvas of Business Idea The framework presented by Osterwalder and Pigneuris simple to understand and use. Moreover, framework also presents high consistency level between various elements. Figure 1: The Business Model Canvas The figure above represents the Business Model Canvas derived from the Osterwalder and Pigneur’s business model framework. The model is divided into various elements: customer segments, value propositions, cost structure, key activities, key partnerships, customer relationships, channels, revenue streams, and key resources. These nine elements are categorized into four main areas: Financial Viability, Customers, Infrastructure, and The Offer. Christensen and Malone method in Analyzing Osterwalder model The study undertaken by Malone et al. (2006) aimed at shedding some light on the Osterwalder’s business model through description and decomposition of the models that use the asset and type right framework. Moreover, the authors used the concept of modelling performance in evaluating the major factors considered to have significant impact on the performance of the business. The findings of Malone et al. (2006) could be used in assisting the start-up businesses and traditional companies that consider using business models. From the analysis of Osterwalder’s business model, it is difficult to determine its suitability within the start-up businesses. According to Osterwalder and Pigneur (2010), business model tends to describe the rationale on the manner in which the business could create, deliver, and capture the proposition value. Christensen, on the other hand, argues that a business model needs to be seen as a business blueprint for implementation. Such a view relates to Malone et al. (2006) where the business model is view as the product of strategy creation. In their aim to describe the business model, Osterwalder and Pigneur (2004) proposed the ontology of the nine building blocks that laid the foundation of their business model. These blocks show that the business is able to make money through provision of value proposition to the customers. According to Malone et al. (2006), a business model is built based on two main elements: unit of the business and the process advantages required to create such business unit. However, such concept could reflect the extra that the customers are willing to pay. Generated Business Model The SEO Consultant opportunity divides the model into four elements, which determines the profitability extent, which influences various activities associated with the business. From the model, the industrial factors tend to analyze the impacts of various business models such as the customers, competitors, and barriers. Business resources assist in the creation of value differentiation with the cost bringing the new value type, which is the low cost model. Moreover, positions involve looking at the rights places considered conducive for the business or unoccupied for delivering the business with new market and interesting values. Integration of these elements is important for the creation of the SEO Consultant business model considering that their uniqueness is the source of competitive edge. Description of the Nearest Competitor The major competitors are the social media consultants. With increasing level of competition within the market, social medal platforms play important roles in ensuring that businesses remain relevant and acquire the desired competitive advantage. Large companies are currently focusing on hiring agencies or full-time staff members to run their social media platforms. However, small business often handles their social media marketing which also present great competition for the business. With many responsibilities associated with SEO Consultantes, the owners are usually busy, overwhelmed, and undereducated on the significance of spending much time on the development and implementation of the social media strategy. Differences between the competitor’s and considered business models The competitor uses Free Business Model: Freemium. This type of model offers one or more customer segments the opportunity of to use different services free. Normally, one customer segment receives the directed offer free, which another customer segment finances. Freemium model allows many users have free access to the business website and the services provided with the groups paying for the premium services and website’s contents. The revenue that the business generates from people covers the total cost including those that are not paying (Johnson, Christensen & Kagermann, 2008, 142). However, the business aims to use the model that links two different groups of the customers together. The SEO Consultant also creates its value through facilitation of different interaction types between the two groups. However, the value of the customer group is decided through various customers. Moreover, the business model offers both the buyers and the sellers of various products and services secure method of conducting their businesses. Evaluation of strong and weak points The major strength of the model is the provision of simple, flexible, and intuitive tool that is developable rapidly and applicable to both the ongoing to iterate and refreshing of the business strategy. Moreover, the model provides an overview of the business through its offering, market, finances, and infrastructure. The model is a good guide or the building block to various business models as it allows the business to understand the manner in which other elements operate. The model also concentrates on the quality rather than quantity and centers on the creation of value proposition (Zott, Amit & Massa, 2011, 1025). The model also has several weaknesses such as exclusion of the organizational strategic purpose; the business model excludes the competition notion; and mixes various levels of abstraction. Conclusion The plan focused on the SEO Consultant in a bid to create an effective business plan. SEO Consultant presents numerous opportunities to both the consumers and business since it reduces the cost of operation and delivery of the products and services to the customers. Focusing on the field of business models, it is clear that there is no consensus of a single framework that depicts what constitutes a business model. To perform the analysis of the manner of creating a successful SEO Consultant model, it is important to choose a model framework to serve as the foundation of the analysis. Osterwalder and Pigneur suggested various modes of progression while working on the canvas. First, it is important the business figures out the customer segments it needs to serve then establish the value propositions it needs to offer. Then, the business has to examine the available channels of reaching the market segments and the type of customer relationships that it needs to build. References Baden-Fuller, C., & Morgan, M. S. (2010). Business Models as Models. Long Range Planning, 43(3), 156-171. Carson, R., Louiviere, J., Wang, P., & Li, S. (2003). Archetypal Analysis: A new way to segment markets based on extreme individuals. Marketing Research and Research Methodologies, Conference Proceedings Adelaide 1-3 December 2003. Casadesus-Masanell, R., & Ricart, J. E. (2010). 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