All Posts in Business Model

|In: Bangalore|Last Updated: | 9 Comments
There is a saying “Nothing in this world is constant except change”, on a similar lines there have been lot of changes in Bangalore; some good, some bad. However, one thing that has drastically changed is the “Public Transportation“. Remember the days when we only had blue colored BMTC buses but now with the introduction of Volvo buses, Public Transportation has gained momentum. Not to forget with the shift of the international airport to a so called remote place, the obvious choice of most of the Bangaloreans is the famous Vajra bus.

BMTC has done a great job by introducing Volvo buses for the right places and also setting the up the right frequency for the right routes e.g ITPL or Electronics City is a place which is filled with software companies and the frequency of Volvo buses is exceptionally great there !!!

Before writing this article, I interacted with a few people[who travel to ITPL] and most of them preferred BMTC over their own cars/bikes. Apart from the normal ways of generating revenue, there are many other areas where BMTC can look for more revenue:

Brand Promotion

Most of the times, there is FM being played on the radio in the bus but if BMTC manages to tie up with brands, radio can act as a great medium for marketing.It can be used to showcase offers in shopping malls, promote new brands, movies etc. Remember, there is Big Bazaar near ITPL; so this would be much useful in such cases !!!

Job Announcements

After the economy tumbled, many were laid off where some of them landed up in jobs out of no better choice. With Indian economy showing early signs of recovery, Volvo bus would make an excellent tool to showcase jobs again through radio or advertisements inside the bus. To make things better, these advertisements can be geo-targetted like buses from ITPL, Electronics City etc. would ONLY carry those ads.

OOH Advertising

Along with the convenience, the added advantage in Volvo is the additional standing space. The photograph shows the frontal view & there is definitely a big opportunity for Out Of Home advertising. There is space for 2 TVs [one in the frontal entry and other at the back entry]. With OOH growing at 20% annually , this is a big opportunity form BMTC to target the people travelling in the bus.

Photo Credit – Srinidhi Hande

To summarize, BMTC can replicate the Google Adsense model for the Volvo – RIGHT Ads Targeted for the RIGHT routes and obviously for the RIGHT customers !!!

Many of us would be travelling by BMTC buses, hence if you feel there is any other revenue generating opportunity BMTC is missing; please leave them in the comments section & it would be added to the article.

|In: Books|Last Updated: | 4 Comments
Few months back, I came up with an article titled “What before a Business Plan”.Today, we would focus on something which is inseparable from the Business Plan called “Feasibility Study”. It is true that once we have the B-Plan ready, the very next step is to get going and focus on how to achieve the optimistic figures mentioned in the B-Plan rolleyes However, few things mentioned the B-Plan is written keeping the investor’s in mind but along the entire journey; Customer is and will remain the HERO. !!! This leads to a report titled “Customer-Driven Feasibility Study” [from this point referred as Customer-Driven F.S. ] and my current read The New Business Road Test by John Mullins explained that to the core of it !!!

This article is divided into three parts namely:

  1. What is Customer Driven F.S ?
  2. Thin line of difference between B-Plan and Customer Driven F.S
  3. Contents of Customer Driven F.S

What is Customer Driven Feasibility Study
During the course of any opportunity, the Market Analysis/Study phase always remains iterative.However, at one point of time, the evidence gathered through the research would help us understand whether the opportunity is REALLY an opportunity.This feasibility study is Customer Driven because , unlike most organization charts which has the founder/ CEO at the top and people serving the customer at the bottom, the feasibility study begins with the target customer, without whom there would be no business. It is an internal document that should cater to the seven requirements which are discussed later.

Difference between Business Plan and Customer Driven Feasibility Study
Though there are a number of overlaps in the B-Plan and Customer Driven F.S , there are three major areas where they tend to differ :

1. Customer Focus :
The purpose of any business it to win customers and the Feasibility Study completely caters to that requirement which is quite different from that of most B-Plans – to win an investor. If there is no likelihood for customers, there would not be any investors.

2. Fundamental Economics :
The feasibility study addresses the fundamental economics of the business, by identifying the key drivers of cash flow: revenue, required capital investment, gross margins etc. If these drivers are satisfactory, than detailed strategies like marketing, operations and financing can probably be developed to make the venture economically viable.

3. Mindset :
The purpose of the study is not to sell the venture’s merit whereas a B-Plan organizes the answers delivered by the feasibility study and goes on to develop marketing, operating and financing strategies in an effort to sell the opportunity, in a focussed way, to the investors and other stakeholders.

7 step “Customer Driven Feasibility Study”

1. EXECUTIVE SUMMARY :
This briefly describes what follows [tells the reader(s) what you are going to tell them]

2. MICRO- level MARKET assessment :

  • TARGET market and it’s pain identified; benefits of your solution identified, with evidence that those in this segment are willing to pay a price that works.
  • Target market segment, size and growth rate.
  • Options to grow into other segments.

3. MACRO- level MARKET assessment :

  • OVERALL market size and growth rate.
  • Macro trends analysis to assess future market growth and attractiveness.

4. MACRO – Level INDUSTRY assessment :

  • Five forces analysis : Whether or not the industry is attractive.
  • Likely changes that may happen going forward.

5. MICRO – Level INDUSTRY assessment :

  • Any proprietary elements.
  • Any superior organizational processes, capabilities or resources identified that are not easily duplicated or imitated.
  • Economic viability of business model established :

– Revenue Forecast.
– Customer acquisition & retention costs and time required to obtain a customer.
– Gross margins.
– Break even analysis.
– Operating Cash Cycle characteristics.

6. TEAM assessment :

  • Team’s mission, aspirations and tendency for risk.
  • Team’s ability to execute the mission.
  • Team’s connectedness up, down and across the value chain.

7. SUMMARY and Conclusions :
Tell the reader(s) the key highlights of what you have told them – why this is/is not – opportunity attractive and future prospects of the opportunity.

|In: Business Model|Last Updated: | 2 Comments
Just came across an interesting and pictorial presentation on Business Models development.Excellent material but my “very” favourite slides were:
  1. Open Business Models # Slide 58
  2. Business process outsourcing “up-side down” in India # Slide 62

Enjoy the complete presentation wink !!!