Week 4: Business Model

This week MB362 has assignment about the problem faced by Jurong Bird Park. And we are told to present our proposed solution. The problem faced by Jurong Bird Park is non-English speaking visitor can not enjoy the show and the information in the signage is not enough to describe particular bird. There are many interesting ideas from the presentation of other group. My group's idea is to use sms and phone call, it looks a bit out of date but everyone can use it. =p
Other group also have idea not quite different. Some have the idea to use bluetooth which is a terrific idea. At the end of all our presentation, the Prof discuss the problem with us. In the discussion the Prof pointed some problem with our idea such as is everybody know how to use bluetooth? how about our mother? The Prof also mentioned the use of java application to make it more interesting by having a game with the visitor and also it is possible for market segmentation. JBP can have a different price for the customer. More expensive for visitors who wants better service or faster connection.

Then we move on to the next topic which is the "Business Model". Actually business model concept is a new concept but now is very popular concept and is very important for the business world. The function of the business model :
1. to articulate value proposition
2. to identify market segment
3. to define the structure of the firm's value chain
4. to specific revenue generation mechanism
5. to describe the position of the firm in the value network
6. to formulate the company competitive advantage strategy.

For a company to profit, it has to gain competitive advantage. Not only gaining competitive advantage but also have to sustain it, in order to gain more profit in the long run. A product must offer value proposition. What is value proposition? the benefit we get from the product. Simple example as an undergraduate student, the value proposition is the credential, knowledge, skill and networking. Identify market segmentation is crucial to serve our customer better. Last semester I learnt that for a new emerging company, is best to serve the market segment that is not well covered by other company. Like what Starhub did when they enter the telcom service provider. Their market segment is the people who want a cheaper service provider.
Business model have many elements:
1. customer value
2. scope

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3. pricing
4. source of revenue
5. connected activities
6. capabilities
7. implementation
8. sustainability

Each of the elements is very important. The shift in on component can change the respond of the customer. e.g. pricing: if your product pricing is depends on how much is the usage, people is more reluctant to use your product since there is uncertainty. People do not like uncertainty.

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Source of revenue is also an important factor. From where your company will get the revenue, the revenue may not necessary the money paid by customer like in Amazon. The buyer pay for the book before the shipping. But Amazon only pay the supplier much later. The money they get will be invested for a short period and they get their revenue from short term investment.