Explain what is meant by a business model In general a business model describes in which way a company can generate revenue, and hereby makes profits from their respective operations. It is used by, for example, already established companies, which seek new forms of innovation strategies to put themselves in a stabile spot in the growing competitiveness among other companies. It is hereby also used by entrepreneurs, who are new to the business market, and want to be innovative and carve out their space to gain competitive advantage.
Explain Stewardess’s business model canvas theory The Business Model Canvas was initially proposed by Alexander Stewarded, and was based on his earlier work on Business Model Ontology. Stewarded discovered that there were many business models out there, but not one which was simple, with clear definitions. Therefore Stewarded wanted to propose a clear conceptual framework of the business model. He named it “Business Model Canvas”. The business model by Stewarded is divided by nine building blocks. Those nine blocks, is described as follows: 1.
The value proposition of what is offered to the market; 2. The segment(s) of clients that are addressed by the value proposition; 3. The communication and distribution channels to reach clients and offer them the value proposition; 4. The relationships established with clients; 5. The key resources needed to make the business model possible; 6. The key activities necessary to implement the business model; 7. The key partners and their motivations to participate in the business model; 8. The revenue streams generated by the business model (constituting the revenue model); 9.
The cost structure resulting from the business model. The value proposition of what is offered to the market; (http://buckminsterfullerene. Com/blob/2005/11 /what -is-business-model. HTML) Analyses your case company’s Business model by using Stewardess’s framework In order to analyze Newspapers, a daughter company of Nestle©, and one of the leaders in the coffee industry, I will firstly look at the value proposition. The value proposition is about what you do to the customer, and not on which features you build the respective product.
What Newspapers can offer is good quality coffee, and the value proposition consists of two different reduces, which are the popular Newspapers machines, and the other one is the Newspapers capsules, which goes out to two different segments. The segments are household costumers and business customers. The revenue stream is the machine sales, which goes directly to the key partners. The key resources are the distribution channels, which have ability to reach the customers by Newspaper’s website, their stores, or the call centers. The channels are important in order to decide how the product can reach your customers in the best possible way.
Newspapers uses a lock-in strategy, because when you are buying their coffee machines, you have to buy the capsules again eventually. Newspapers make special capsules, which you cannot get in another store, so that’s why it’s obligatory to buy them at Newspapers again. This goes under the block customer relationships. To build a loyalty between customer and seller, Newspapers have made a “Newspapers Club” card, where there are benefits provided to each returning customer. The main revenue for Newspapers is those repeating customers. One of the key partners is he coffee growers which are essential for Newspaper’s production manufacture.