business model projects final submission

8/12/2019 Business Model Projects Final Submission

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INSTITUTE FOR INTERNATIONAL

MANAGEMENT AND TECHNOLOGY

MODULE NAME:Entrepreneurial Development

MODULE LEADER:VIMAL BABU

TOPIC:Business model Innovation Project

Submitted by:-

PRABHAKAR JHA

PGPM (2011-2013) (4thSem)


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INTRODUCTION

The entrepreneurs are not made by born; they indentify the opportunity in the existing problem

of actual world. Business idea could be new technological advanced product or services, market

opportunity and other possible activity. The booming economy of India has led to a multitude of

business opportunities, and with deregulation, it has become easier to set up businesses. Owing

of business is dream of most people but some creative and innovative ideas turn dream into

action (Roy,2012). This report is based on the new business idea and relevant business model

with SWOT and environmental analysis.

INNOVATIVE IDEA

Innovative idea means find out some new thing with help of creative approach. New idea

greatly enhances the chances of success. According to Peter Drucker, Innovation is the specific

instrument of entrepreneur, the means by which they exploit change as an opportunity for a

different business

New innovative idea-MobileCharger withSound Energy


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Idea is based on technological factors that revels the mobile phone battery could be charged

through the sound energy. The mechanism of converting sound energy into the electrical energy

is the creativity of idea.

Justification of Idea

Sound power can be used as various novel applications such as cellular phone charger. It is

possible through the uses of tiny stands of zinc oxide sandwiched between two electrodes. A

sound absorbing pad on the top of the phone vibrates, when sound waves hit it, this causing the

tiny zinc oxide wire to compress and release. This movement generates an electrical current that

can be used as electric charger (www.telegraph.co.uk,2013).

Existing problems

In India most of the villagers, facing the problem of electricity supply, that leads the power

shortage. Due highly communicative environment, trend of mobile phones and higher of

migration from rural areas to metro cites generates the need of mobile phone for easily

communication. But the power shortage is huge obstacle of mobile phone communication and it,

is major issue of social life in city like Bihar, UP and Rajasthan. Demands trends of electricity,

shows that 8.1% deficit in base load requirement and 9.3% shortfall in peak load

(www.financialexpress, 2004). Approx 52.5% of rural have access the electricity and overall

electrification rate in India is 64.5% while 35.5% population still live without accesses the

electricity (Singh et al, 2007)

Opportunity identification

In modern scenario, people dont to restrict his/her communication boundary. Mobile phones

emerge as basic needs in modern technological world. As per above discuss, for mobile phone

users, a flat battery or lost charger are the part of frustration of modern life. Since, the

opportunity for this idea is to be good according to number mobile subscribers in rural India and

problem with electricity supply. According to repot of (Economic times report) approximately

100 million around 40 % users are likely from the rural areas of India. Electricity down flow
http://www.telegraph.co.uk/http://www.telegraph.co.uk/http://www.telegraph.co.uk/http://www.financialexpress/http://www.financialexpress/http://www.financialexpress/http://www.financialexpress/http://www.telegraph.co.uk/


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indicates that huge number of population facing the mobile charging problems (www.articles.economictimes.com, 2008)

Opportunity Area of new idea

Opportunity area of business defined the blueprint of business model and it creates the real world

environment for business. An opportunity may be the chance to meet a market need through the

creative combination of resources to deliver superior value, but opportunity describe a range of

phenomena that begin unformed and become more developed through time (Kirzner,

1997).There are generally opportunity identification also known as revenue avenues, which is

divided in to six most probable areas; customer, product, market, technology, value proposition

and synergy.

As per concept of opportunity identification for new idea, this business model would be based on

technology based opportunity area. Since the idea of business is directly based on new

technological use of zinc oxide sandwiched in mobile phone circuit. This technology is highly

applicable in mobile phone manufacturing system. The Problem with electricity and higher rate

of mobile users, lead to develop the new technology, which based on the mechanism of

converting sound energy to electrical energy. Means there is big gap between electricity problem

and automatic mobile charger; this creates the good market opportunity for the business.


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An opportunity for this idea would be based on new technology, on the basis of study on

consumer problem (Mobile charging problem in rural areas). This attractive technology would

apply to untouched market of mobile charger in rural areas.

Introduction of Business model

The term business model does not have any single definition. Term business model scroll in

many senses and it is reflected in various definitions like it could be market oriented, product

oriented and etc. According to (Magretta, 2002), a business model is system of specific

elements and assumptions about the industry, customers, their need, operations, value and profit

generations, etc., which should be interconnected to each other component . Researchers have

given various views about the component of business model, but the list is varying to each other.

According to (Johnson, 2010), a business model consists of four interlocking elements; customer

value proposition, key resources, key process and profit formula.

Business Model-1 (Unbundling)

As per opportunity area of new idea, the suitable business model should be help to generate the

revenue from the market segments. The Technologyopportunity area for mobile phone market

could be suitable in unbundling types of business model. This model is provides the customer to

unlock value in product by breaking it up into several standalone product. Sound battery charger

product is special application (Apps) for mobile phone (Including Smartphone) which could be

available in different categories. This business model for sound charger mobile apps included the

several components which are described in following ways:

Division of apps according to need of charging capacity: - The mobile phone soundcharger directly related to external sound or noise. So it would be available into the

different parts like; 2-Hour backup, 6-Hour backup, 24-hour backup and 30-hour backup.

Customer can buy any of them as per uses hour of phone.


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Each and every component of the product would be selling as complete product. Means6-hour backup mobile phone is separately design and applicable as complete phone

which can be charged through the sound waves of human as well as external noise.

Future plan of this business model would be increment of prices of apps and product ifthe growth of business could seems like that.

Business Model-1 Canvas

Osterwalder (2010) presented the canvas business model which had more component than the

Johnson model of business. It is divided into different categories of business component, which

could help in analyzing the actual performance and strategy required for business model.

There are eight components of business model has been described in Canvas map. Each of the

components tells about the particular business activity related to sound-charger product. All key

component of canvas model is discussed in fig-1, which shows the how different business

activity could be performed for this desires business model in term of technological opportunity

areas.

Key Activities: - It includes the manufacturing to delivery of products to end customers. It

included the promotional, after sales-services and demonstration of product through personal

selling.

Key Resources- Due to highly technical product, key resources of business model would be

highly skilled human resource, intellectual property rights and advanced software program.

Key partners As per product attributes, some strategic alliances require to penetrating of

market. Some most established brand joint ventures can promote as well as create a platform for

the business.


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Fig-1

Strategic

partners

Strategic

alliance with

Nokia and

Samsung.

Local

retailers and

mobile phone(Online)

stores

Key Activities

Manufacturing

Of Sound

charger

After sales

services

Software testing

and regular trade

shows for

villagers

Value

proposition

Saving of

electricity as well

as bill generated

through mobile

charging

Eco-friendly

product, easy to

use and portable

device

Customer

Relationship

Direct personal

assistance through

regular visit to target

market. Own service

center in every

target cities.

24*7 helpline

Number

Technical supportteam

Customer

Segment

Mass market

target segment.

Rural area by

geographically

unbounded.

Lower class-to

middle class

target group.

Key Resources

Technically

Strong manpower

Strong

distribution

Network and

strong financial

resources

Distribution

Channels

Direct- Sales force

Indirect- Own

stores, partners

stores and

Wholesaler of

mobile phones


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Cost

Manufacturing cost per unit is approx-1500

which included all fixed cost. Cost-driven

factor in special features of phone. Variable

cost like promotion and extra add on features

of product.

Revenues

Assets sale: - Providing the ownership of sound

charger to customers.

Lease or rental:- Incase, some customer require

only for some specific time, then it could be

possible to provide them on lease basis

Business Idea-2

Innovative Idea: Battery-free lamp for developing cities is powered by

gravity

Justification of idea:- This come to overcome of electricity problem in developing cites of

India like; Jaipur, Patna and etc. the principle of idea is to generate a electricity in lamp through

the gravity power of earth. The device would be attached to a weight, which is when lifted for a

few secound hamesses enough energy to power the light for 30 minuits. The main benefits of this


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gravity lamap would no deteriorating pats and means owners dont have to respend money to

keep running it.

Fig-3. Battery free lamp

Existing problem :-

The demand and supply of electricity in india is not balanced. Since some of the houshold uses

suffuring from big problem of elecrticity. Around 1.5 billion people who live in poor, remote

areas and have rely on dengerous kerosene alternative. Kerosene is very highly flaimable

chemicals which causes air pollution as well. This problem creats a gap between electricity

failure and innovative idea.

Opportunity identification

The proble arrises in small cites like Bikaner and other sub-urbaun areas of India faces a big

problem of electricity. Due higher rates of electricity bills and power cut at the night causes a

vital problem for poor people. As per above discussed, large numbers of people have to use

dangerous kerosene. So that opportunity comed under this problem to cater the need of needy

people through providing them a thecnological advanced self operated with battery lamp.


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Onother issue is with highly increment of prices of kerosene could lies the problem, since the

gravity operated lamp is best suitable solution and would have good market opportunity for

business model.

Opportunity Area

Among the six typs of opportunity area, this innovative idea suit as product based opportunity

areafor business. Because this product category which is operated through gravity force would

very new for the customers. This product found the gaps in current offering battery operated

lamp, and prosposing new value added product known as gravity operated lamp, to fill those

gaps. As per customer user analysis and product fetaures it could be say that business model for

this innovative idea is suit for product based opportunity area.

Business Model -2 ( Open Business Model)

As per product features and technology, opportunity area of business, the suitable business

model would be Open business model. Where the customer can improve over the product and

create additional features according to their specific needs. This business model is suitable for

this product in sevral ways. For example if the cutomer want a lamp whihch provides them 1

hour light they can advice directly to manufacturers via retailers for customized product.Main

advantage of Open business model for (Gravity charging Lamp)

The problem associated with product can be explored at compartively little cost, andoften very quickly thoruh techincal assistant of company.

The business can tap a wider range of customer need and promoters can gain first-handinsight about their customerss desires.

Highly demand of product can creates the fututre opportunity of product diversificationand market diversification as well.

Low cost factor would be benifical for both customer and producers.


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Business canvas map-2

Strategic

partners

Local lamp

retailers.

Strategic

alliances with

Havels and other

competitiors to

make sure themarket share of

the new prodcut.

Key Activities

Production and

desiging of

product as

customized basis.

Platform for

solving technical

issue with

product

Value

proposition

Eco-

friendlyproduct,

Saving of

electritcity and

creating value

with low cost

lamp, Newness

in product

Customer

relationship

Co-creation-

provides a review

form with each

product.

Personal

assistance (After

sale and POS

assistance)

Customer Segment

Semi-urban and

rural area customer

target.

Age group-18 to 50

year,

Influencers and

strivers


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Key Resources

Advanced

technology,

strong sales force,

Brand copyrights

and intellectual

property rights

for unique

technology

Dsitribution

channel

Producers-

wholesellers-

retailers-customers.

Communication

channel- National

T.V, Regionla

NEWS paper, All

India radio.

Cost

Fixed-cost- manufacturing and building cost

Variable cost- special requirment

Revenue

Highly valued product creates high revenue

Regular use of product influence customer to pay

because no additional cost required after

purchase.


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Business model analysis

The business analysis can be done through various techniques like internal and external analysis.

Internal analysis of firm means find out the key competencies and threads of the business. The

proper analysis of business needs set of question market in strength and weakness of the business

model. External analysis of the business tells about the

SWOT ANALYSIS OF BUSINESS MOEL-1 (Unbundling)

Strength: -Company with the unbundling business model can provided the recurringrevenue strength and frequent purchase of product (Sound energy charger).Due to tariff

free on semiconductor Device Company can generate higher margin on products. Due to

higher demand of mobile phones and limited resource of natural energy (Electricity and

all), this unique technology can create a positive strength for the business. Effective and

efficient production of business model matched with key resources of the firm like;

skilled labor, highly advanced machinery and quality of components. Customization is

biggest strength factor.

Weakness: -Marketing of rural market is very tough. Product is totally technical basesso that customer did not easily motivate from actual and augmented features. Small

market segment and newly introduced distribution network is the weak point of the

business model.

Opportunity:- Technology revolution is the key opportunity of this business mode. Asper changing in life style trend and increasing rate of tech savvy population creates the

brighter future business. Due to increasing rate of income in rural areas people are willing

to spend money on this type of innovative product. Initiator buying behavior of consumer

show the future forecast of the product.

Threats: - Due to highly technological innovation, major market leader of mobilecompanies can take over this business model through price or value centric approach.

R&D cost could be threatened for future prediction. The mobile phone with sound


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charger market could be not being saturated and competitors can be easily entered in the

market.

Macro Economic Environment

Macroeconomic environment includes; key trend, industry forces, market forces and

macro-economic forces of the business. It describes the key issues of market regarding

the particular product.

Macro-economic factors: The global market condition of mobile phone market isshown decline in year 2012. Around 17 percent of worldwide mobile phone sales have

been decline in year 2012. On the other hand Smartphone continued to drive overall

mobile phone sales (www.eandt.theiet.org, 2013). The Indian capital market has

shown tremendous growth in the post liberalization. Rising capital is a key factor of

Indian capital market, but the debt market still need to improve to invite capital inflow

needs for massive infrastructure development (www.pwc.in,2013).

Market forces: - Highly features Smartphone at low cost around 3,500 Rs in Indianmarket can affect the customer landscape. Customer satisfaction and after sales

service is the biggest need of electronic gadgets in current scenario, because

technology failure is the major issue now a days. Desirable features of sound-charger

mobile product is binds the customer to company and reduction of easy to use of

technology is key market forces of this business model

Industry forces: - The mobile phone market is very dynamic; technology can notrestrict the new business penetration in the industry. There are so many local players in

the industry but price discrimination and product diversification is the one of the

import key to sustain in the industry.

Key trends: - Indian government regulatory trends are in the favorable of electronicsitem manufactures. Budget-2013, shown a positive move for fabrication of zinc oxide

semiconductor component. This business model chosen as per the new technology of

sound energy to electrical energy converter. Social media become very popular in rural

areas also, according to data 40 percent of villagers using facebook on mobile phones.
http://www.eandt.theiet.org/http://www.eandt.theiet.org/http://www.eandt.theiet.org/http://www.pwc.in/http://www.pwc.in/http://www.pwc.in/http://www.pwc.in/http://www.eandt.theiet.org/


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Modernization of Indian rural and semi-urban area creates the better platform for this

business model.

CONCLUSION & RECOMMENDATION

One the basis of above two business model canvas map, it can be analyzed that the business

model-1 (unbundling) is the superior model for the current existing market. Product will be

generates the value of business through innovative feature. Electricity problem could not restrict

to talk or use of the mobile phone is rural and semi-urban areas. So the best suitable model

among the two models is sound-energy charger product which can be run through the unbundling

business model. Customization of product according to the need of customers is key factor of

this business model. It can be recommended that direct personal selling with free demonstrations

of product can create the market demand. The business model can be re-engineering and proper

R&D would be required to sustain in the market through the technological advanced product.

Pricing strategy should be customer centric and excellent technical assistance should be

providing to customers.


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REFERENCES

1. Financial Express, (2004). Get enlightened about electricity [ financial Express, 20 thDec, 2004] (Online) Available from .

2. Global market condition of mobile phone (2013) (Online) (Cited on 12thMay, 2013)Available from

3. Indian capital structure (2013) (Online) Available from the .

4. Johnson, M.W. (2010) Seizing the White space, Harvard Business Press.5. Kroner, I., 1997. Entrepreneurial discovery and the competitive market process: an

Austrian approach. J. Econ.Lit. 35, 6085.

6. Magretta J. (2002). Why Business Models Matter?. Harvard Business Review, May.7. Roy, R. (2012) Entrepreneurship (2ndedn) Oxford University Press, New Delhi, pp-12-

17.

8. Singh, A., Cust, J. and Neuhoff, K. (2007). Rural Electrification in India,Economicand Institutional aspects of Renewable,(Online) Available from .

9. Telegraph. (2013) (Online) (cited on 12thApril, 2013) Available from .

10.The Economic Times, (2008). Rural India Mobile users penetration, (Online) Availablefrom .
http://www.financialexpress.com/printer/news/122151http://eandt.theiet.org/news/2013/feb/mobile-sales.cfmhttp://eandt.theiet.org/news/2013/feb/mobile-sales.cfmhttp://eandt.theiet.org/news/2013/feb/mobile-sales.cfmhttp://www.pwc.in/en_in/in/assets/pdfs/Publications-2010/India-Captial-Market.pdfhttp://www.eprg.group.cam.ac.uk/wp-content/uploads/2008/11/eprg0730.pdfhttp://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttp://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttp://articles.economictimes.indiatimes.com/2008-12-02/news/28491724_1_rural-areas-mobile-subscribers-mobile-usershttp://articles.economictimes.indiatimes.com/2008-12-02/news/28491724_1_rural-areas-mobile-subscribers-mobile-usershttp://articles.economictimes.indiatimes.com/2008-12-02/news/28491724_1_rural-areas-mobile-subscribers-mobile-usershttp://articles.economictimes.indiatimes.com/2008-12-02/news/28491724_1_rural-areas-mobile-subscribers-mobile-usershttp://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttp://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttp://www.eprg.group.cam.ac.uk/wp-content/uploads/2008/11/eprg0730.pdfhttp://www.pwc.in/en_in/in/assets/pdfs/Publications-2010/India-Captial-Market.pdfhttp://eandt.theiet.org/news/2013/feb/mobile-sales.cfmhttp://www.financialexpress.com/printer/news/122151


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Turnitin Report

Originality Report

Processed on: 13-May-2013 2:12 AM IST

ID: 329347783 Word Count: 3075 Submitted: 1

Business Model Innovation projectBy Prabhkar Jha

Similarity Index

4%

Similarity by Source

Internet Sources:

4%

Publications:

3%

Student Papers:

3%

include quotedinclude bibliographyexcluding matches < 20 words downloadprint

mode: show highest matches together

1

2% match (Internet from 03-Feb-2012)

http://www.telegraph.co.uk

2

1% match (Internet from 02-Mar-2013)

http://www.springwise.com

3

1% match (publications)

Bhoyar, Raju, and Sachin Bharatkar. "Potential of MicroSources, Renewable Energy sources

and Application of Microgrids in Rural areas of Maharashtra State India", Energy Procedia,

2012.
http://changequoteexclusion%280%2C0%29/http://changebibliographyexclusion%280%29/http://changebibliographyexclusion%280%29/https://turnitin.com/newreport.asp?lang=en_us&oid=329347783&ft=1&bypass_cv=1https://turnitin.com/newreport.asp?lang=en_us&oid=329347783&ft=1&bypass_cv=1http://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttp://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttp://www.springwise.com/springwise/top-10-business-ideas-opportunities-2013/http://www.springwise.com/springwise/top-10-business-ideas-opportunities-2013/http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://dx.doi.org/10.1016/j.egypro.2011.12.1202http://www.springwise.com/springwise/top-10-business-ideas-opportunities-2013/http://www.telegraph.co.uk/technology/news/8500161/Mobile-phones-could-be-charged-by-the-power-of-speech.htmlhttps://turnitin.com/newreport.asp?lang=en_us&oid=329347783&ft=1&bypass_cv=1http://changebibliographyexclusion%280%29/http://changequoteexclusion%280%2C0%29/

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