Business Model Assignment: Idea Of Smart Digital Planter
Task: Develop a business model assignment exploring the business idea of Smart Digital Planter which is based on IoT?
Introduction to the business model assignment
A business model in simple words provides an explanation of how the business organization creates, delivers and captures value in a given economic, cultural and social context(Joyce &Paquin, 2016). Business model sets out a strong vision for the organization and answers all key questions related to the business (Magretta, 2002). The business model assignment proposes a business idea, which is built on the foreground of technology, especially IOT and is called as Smart Digital Planter. Within the purview of the assignment, the problem statement will be discussed, against which the solution to the problem which is Smart Digital Planter is pitched, and an effective business plan is produced for its success in the future.
This is 21st century, and more than people talk amongst each other, this is the era where smart devices or electronic devices seem to be taking a control over our lives, and making it easier and more liveable. Individuals are so busy these days owing to work pressure, family pressure, societal pressure and other, that they barely having time for themselves (Gerhart, 2017). In such a scenario, when they do not have time for themselves, gods forbid what would happen to our precious environment and who would care for it. However, modern problems requires modern solution, hence the idea of Smart Digital Planter. The smart digital planter will communicate with other devices such as Smartphone, Tablet and other and let the users know that they need water, sunlight, nutrient or needs chopping or any other thing which will add to the beautification of the plant, and help in its growth. By communicating through device, the two fold problem of time constraint for customers and climate change for the environment can be tackled effectively, whilst leveraging the evolving technologies (Tan,et al., 2018).
Some of the key benefits of this business idea are:
- Better plantation habits amongst the consumer and growing concern towards the plants and care for the environment.
- Additions to the family of smart devices, all of which can interact, communicate and help one and another.
- Different colour variants for the Smart Planters will add on to the beauty of the house.
- Has a much longer life than any other plants, due to the features of interactivity and communication with the host.
Proposed Business Model
A business canvas model, which can be best understood as a shared language for describing, visualizing, assessment for the changing business model which also defines how the business organization creates, delivers and captures value for the customers (BMI, 2020) is being used herein business model assignment:
The three most important customer segments for the Smart Planters are Low Income Population, Middle Class Population and Upper Middle Class. The idea is to be launched as a pilot firstly in tier 1 & tier 2 in the cities across the selected geographical market.
The Smart Digital Planter is a communicative and interactive pot which uses IOT to communicate with the devices and lets the consumer know about its watering, sun and nutrient need. The value proposition here is that customers will now never forget to water the plant, which will make them more conscious to the environment and also make them more responsible. Plus, it is an innovative product, so the early adopters of technology would put their hands on the products first.
There are three revenue streams for the Smart Digital Planter:
- First time selling of the product
- Repair and maintenance services of the product
- After the full life cycle, we would take the product back in exchange for a gift card. The idea is to further use it in the circular supply chain economy.
The Target audience or the TG for the product is tech savvy audience, who uses social media, in the major portion of the day. Hence, the communication will only be done through social media platforms such as Instagram, Facebook, Twitter and blogs both on the website and other blog publishers such as Medium.
This is one of the most important aspects of any business and instrument for its long time success. Customer relationship is maintained in the following ways:
- 24*7*365 days online support through a couple of dedicated professionals (Payne &Frow, 2017).
- Chatbot integration on the website in case the customer support is busy.
- Social Media relationship building by replies, comments, customer feedback, emails and calls post sales (Hendriyani&Auliana, 2018).
The key activities involved in the present case of business model assignment are mostly related to strategy development for the product penetration, website and social media pages creation and updating, supplier relationship, working on new innovation with the R&D team and looking for newer segments and market to explore. It also includes the strategy towards effective circular economy model.
The key resources for the business can be seen as: Human Resources- Involved in the process of selling, marketing, business development, supplier relationship, customer support and other office work.
Financial Resources- Required sustaining and maintaining the business, along with the initial set up costs for the business, until the Break-even point is achieved. Technological Resources- IOT, Artificial Intelligence and Machine learning
Supplier and technology providers are the key partners in the present case of business model assignment. Besides this external stakeholders such as financial bodies and customers are also key partners for the business, and not to forget the most important internal stakeholders which are employee of the business.
The top most cost for the business is towards:
- Cost of suppliers which is recurring in nature and one time tech cost.
- Administration and Marketing costs
- Website development and Social media costs
- Costs of human personnel such as customer support, delivery and others.
- Cost of R&D team working on circular supply chain economy
- Miscellaneous costs in terms of order return, breakage, or tech failure
Operations & Finance- Operations cannot be run for the business in the absence of the fund management and financial planning. Hence, the most important interrelationship exists here (Gong, et al., 2018). Operations & Marketing-On the basis of the operations or the product development team, marketing team will create the communication plan for its customers.
Finance and Marketing- Allocation of marketing budgets to the departments. Human Resources & Finance- Hiring of employees, need of personnel and other things are to be done after looking closely at the balance sheet and budget allocation (Kiel, Arnold & Voigt, 2017).
The Critical Success factors for the Product considered in the present context of business model assignment can be seen as:
- Innovation-Smart Digital Planter is an innovative product which interacts and communicates with the customers using smart technology. Early adopters of technology will appreciate this product immensely (Holotiuk&Beimborn, 2017).
- Environmental Awareness-Climate change is a real issue, and customers have become more and more aware of it. The product will be their small contribution to the deteriorating environment.
- Smart device family-Smartphones, Tablets, Devices like Alexa or Google Home, Smart Refrigerators, AC and others are examples of smart devices and people are adapting to them rapidly. This will be an addition to their family of smart devices.
- Contribution to circular economy-The days of linear economy model which focusses on take-make-use and dispose are over. The focus is not on use/reuse and make/remake. The product passes the litmus test of circular economy and also serves as a factor of competitive advantage.
- Solution to customer Problem-Customers is engrossed in their daily lives that they forget the importance of environment in their lives. This product will help them to be conscious around their surrounding and help them to make smart choices (Yeoh&Popovic, 2016).
What are the critical risk & assumptions based on the present case of business model assignment? Some of the biggest risk attributed towards the product is:
- Technological Risk-In case of tech failure, the product will not be in a position to communicate with the customers, thus completing diluting the value proposition.
- Financial Risk-In case of sufficient funding or inability to secure the funding for international market expansion, the product penetration becomes a big challenge (Thompson &Pendel, 2016).
- Operational Risk-The R&D team for the technology and the product development team might fail to innovate in the stage of product development, which might be again a risk (Katz & Green, 2018).
- Supply Chain Management Risk-Supply chain has to be robust and agile for this, and must have infrastructure for the circular supply chain as well. In the absence of a well formed infrastructure, the product will collapse.
Feasibility of the Business Idea
In order to evaluate the feasibility of the business idea the important factors to be considered are market, competition, financial requirement, and innovativeness of the idea, key suppliers and others (Chen, Li & Zhu, 2018). And all of which have been discussed and harbingers to the success of the proposed business idea. Along with it, the reason why the product will be a big hit and popular in the TG is due to its innovativeness, tech friendliness and environmental sustainability. Furthermore, the TG is getting inclined these days towards bringing a change in the environment, and this can be the little help they can do for their planet earth.
The business model assignment on idea generation and business model development can be brought to a logical conclusion by creating a business model canvas and clearly identifying the 9 business elements of the model. Furthermore in the report the benefits to the customers and the unique value proposition positions Smart Digital Planet as an innovative and unique product which benefit for the environment. The feasibility of the idea is tested as a predicament of the novelty of idea and considering all the factors important for the success of the business. Risks pertaining to the business have been identified, which are mostly initial level risk, but with tactful strategy to tackle those risks, the business sure seems to be profitable in the long run.
BMI. 2020. Business Model Canvas [Online]. Retrieved from: https://www.businessmodelsinc.com/about-bmi/tools/business-model-canvas/
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Gerhart, N. (2017). Technology Addiction: How Social Network Sites Impact Our Lives. Informing Science, 20.
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Holotiuk, F., &Beimborn, D. (2017).Critical success factors of digital business strategy. Digital Businesses, 3, 12-18 Joyce, A., &Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Journal of cleaner production, 135, 1474-1486.
Katz, J. A., & Green, R. P. (2018). Entrepreneurial small business. McGraw-Hill Education, 4(2), 42-48.
Kiel, D., Arnold, C., & Voigt, K. I. (2017). The influence of the Industrial Internet of Things on business models of established manufacturing companies–A business level perspective. Technovation, 68, 4-19.
Magretta, J. 2002. Why Business Model Matter [Online]. Retrieved from: https://hbr.org/2002/05/why-business-models-matter Payne, A. and Frow, P., 2017. Relationship marketing: looking backwards towards the future. Journal of services marketing, 22, 12-42.
Tan, P., Wu, H., Li, P., & Xu, H. (2018).Teaching management system with applications of RFID and IoT technology. Education Sciences, 8(1), 26.
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Yeoh, W., &Popovi?, A. (2016).Extending the understanding of critical success factors for implementing business intelligence systems. Journal of the Association for Information Science and Technology, 67(1), 134-147.
· Tech Partners
· Key Suppliers
The key activities are mostly related to strategy development for the product penetration, website and social media pages creation and updating, supplier relationship, working on new innovation with the R&D team and looking for newer segments and market to explore. It also includes the strategy towards effective circular economy model
The Smart Digital Planter is a communicative and interactive pot which uses IOT to communicate with the devices and lets the consumer know about its watering, sun and nutrient need. The value proposition here is that customers will now never forget to water the plant, which will make them more conscious to the environment and also make them more responsible. Plus, it is an innovative product, so the early adopters of technology would put their hands on the products first
•24*7*365 days online support through a couple of dedicated professionals.
•Chatbot integration on the website in case the customer support is busy.
•Social Media relationship building by replies, comments, customer feedback, emails and calls post sales.
Middle class and,
Upper middle class
Financial and Human Resources
Twitter, Facebook, Instagram Blogs on Website and Third party platforms.
• Cost of suppliers which is recurring in nature and one time tech cost.
• Administration and Marketing costs
• Website development and Social media costs
• Costs of human personnel such as customer support, delivery and others.
• Cost of R&D team working on circular supply chain economy
• Miscellaneous costs in terms of order return, breakage, or tech failure
· First time selling of the product
· Repair and maintenance services of the product
· After the full life cycle, we would take the product back in exchange for a gift card. The idea is to further use it in the circular supply chain economy.