MGMT20143 Business Model Deconstruction Report Sample

MGMT20143 Business Model Deconstruction

Objective of Assessment 1

1. Develop, through independent research, an advanced and integrated understanding of the key concepts of innovation, business models, and new ventures in commercial, digital, service, and social contexts.

2. Critically analyse cases of disruptive innovation by applying lean entrepreneurship principles.

3. Critically discuss and reflect on the technical, financial, and organisational constraints for innovative new ventures.

Graduate Attributes: Assessment 1

1. Knowledge
2. Cognitive, technical and creative skills
3. Research
4. Ethical and Professional Responsibility

Task description

• You are required to prepare a business report that deconstructs the business model of a business and identifies the critical success factors that make the business sustainable.

• Your report should demonstrate your critical thinking skills and your ability to professionally articulate your findings.

• Use the Business Model Canvas proposed by Osterwalder & Pigneur (2010) - https://assets.strategyzer.com/assets/resources/business-model-generation-book-preview-2010.pdf

• Copy of the Business Model Canvas template is given on Moodle under assessment 1.

• An assessment exemplar (average submission) is also given on Moodle.

• To achieve a result that meets your study objectives, please ensure the business report addresses each of the assessment criteria given on the next slide, which are included in the marking rubric.

Solution

Introduction

Entrepreneurs develop business Models to bridge the market gap. New entrepreneurs are growing within the market by using technology to bridge gaps and enrich the experiences of both businessmen and customers. As per the MBA Assignment Experts, The report will deconstruct the milk Movement's business model, a Canadian start-up. Their main aim is to build a more profitable, sustainable, and equitable agriculture supply chain.

Business

The Milk Movement business helps solve issues in the Diary supply chain through using actionable intelligence. The company provides its services to business-to-business class and hence helps dairy farmers track their supply, which helps to end service valuable and of superior quality (Milk Movement. Com (2022a). The actionable intelligence helps all key players in the dairy industry in monitoring, production, tracking, maintaining quality, and producer payment (Sparviero, 2019). They provide consumers and clients with actionable intelligence to make informed decisions across their dairy supply chains and to build a kick-ass company that fosters diverse, and exceptional talent.

Industry

The company works in the dairy industry as an intermediate service provider that helps farmers and dairy businesses maintain their supply chain. This further helps avoid wastage, ensure on-time delivery, and helps customers to avail milk and related dairy products of superior quality. 
Markets

It deals with a business market of the dairy industry; hence since 2018, the company has worked with cooperatives, processors and transporters, and others. They tend to build lasting relationships with the consumers to achieve common goals
Thus, the services are not sold to direct customers but help the producers and manufacturers to optimize the supply chain (J. Ojasalo& K. Ojasalo, 2018). 

Products and Services

It offers services like collaborative tools (which enables producer track performance and quality along with managing route & performance of the driver), the producer portals help in acquiring access to critical information from all connected device, the software for the drivers are equipped with a simple interface which helps to complete pick- up in less than one minute(Milk Movement. Com, 2022b). Moreover, the software helps the meaningful producer information through features by acquiring real-time industry averages, tracking routes, driver performance, and producer payment (Moroni et al., 2015). With transportation monitoring, production tracking, quality monitoring and producer payment, Milk Moovement could be the only tool you need to manage a dairy supply chain.

Business Model Deconstruction (or Building Blocks)

Key Partners - The critical partners of the business are investors who are supporting the business by taking equity in exchange for value. The company is new as it was established in 2018; it is raising funds for expanding its business in Canada and globally. In recent times, Milk Movement has partnered with Next, which has provided it with building blocks that are helping clients is complete optimization of is raw milk transportation. 

Key Activities - The critical activities of the business include developing software from three perspectives: producer, cooperative, and drivers. Thus, it helps optimize the supply chain by providing SaaS to producers and farmers in the dairy sector. The services are only applicable for businesses operating in the production, transportation, and distribution of raw milk.  

Value propositions – Raw milk is a highly perishable commodity that is damaged shortly if not kept at a safe and appropriate temperature. For this reason, transport, distribution, and selling of milk are vastly affected. Data will help reduce gaps, low wastage, and reap new opportunities (Oliva&Kotabe, 2019). This start-up is cloud-based and helps distributors, producers, manufacturers in tracking, monitoring, and other factors related to the supply chain of dairy products. 

• It helps to optimize the supply chain.
• Provide accurate-time information on all operational fronts
• Helps to maintain the quality of raw milk while also understanding gaps related to driver performance, transportation, and others. 
• Payments can be easily made, and invoices can be generated in seconds; this helps ease accounting or financial management. 
• Since it is SaaS, it can be used in any country of the world. Thus, the service is not bounded by geographical limitations. 

Essential Resources - Humans are the primary resources that help customize the software as per client requirements (Kuschel et al., 2018). Other resources would include investors, a desktop, and a working office.  

Customer Relationship - The customer relationship is maintained through the customer support feature inbuilt within the application. Any issues with the mobile application or software will be answered through online chatbots or customer care support. Since the company sells customized software as per the needs and requirements of clients, relations with customers are strengthened (Wasserman, 2017). 

Channels - The services are offered only through online modes. The software can be accessed through desktop or via mobiles. 
Customer Segments- The customer segments are business-to-business clients in dairy sectors involved in milking, distribution, and selling raw milk. However, the functions differ depending on the supply chain level. For instance, the login portal for drivers will differ from that of the producer or distributor. Thus, the application is customized considering activities within the dairy supply chain. 

Cost Structure - The business spends approximately 10- 20 % of its software solving issues through research and development. The company spends approximately 5-6 costs on innovation, while the remaining costs are spent on testing the software (every time it is upgraded to newer versions). Although, the cost structure could be subdivided into capital (building and office), overhead (operational costs), and staff (recruitment, training, and retaining employee base). 
Revenue structure- Milk Movement has established its sales process through five steps for understanding existing operations and providing benefits of the application. The sale process would include Assessing problems, evaluating existing systems, gathering requirements, planning milestones, and proposals. The costs of the system range from liters or kgs of raw milk managed through the application.

Interrelationships

Milk Movement has raised two rounds of investments. So, investors are significant partners of the firm as the functioning of operations is highly dependent on financial resources. Also, the critical activities of the firm service are oriented through as it provides SaaS for producers, cooperatives, haulers, and others for managing operations related to raw milk. The SaaS has reduced inefficiencies in the supply chain and has helped the stakeholders manage the operations effectively. 

The features like real-time insights, payments, tracking, and monitoring have provided value in all operations of the dairy sector. To build its value proposition, the primary resources of the firm is human who also helps maintain customer relations by responding to queries and solving issues. Customer relations are also maintained by upgrading the software or innovating new features, for which 25% of the cost is spent on research and development. The customer segments are business-to-business customers, while it sells its products online via websites and mobile applications (Eshagh, 2021). This helps generate revenues charged on 100 kg or liters of raw milk management. The company has been expanding globally as its services are currently used in three countries, while it has already done 512 000 pick-ups with 1000+ producers. It has managed approximately 21. 2 billion pounds of raw milk. Thus, the efforts are remarkable as a start-up firm(Milk Movement. Com, 2022b). 

Critical Success Factors

The critical success factors are those which the organization must accomplish. Therefore, the business-to-business clients are its main critical success factors. Although, the diary sector is fragmented as it constitutes small farms of which the owners might prefer the traditional way of managing.
It requires raising awareness amongst small sectors, while training must also be given to owners, producers, and other stakeholders within the supply chain. Also, the company has recently raised funds of approximately US$3.2 million from a private investor named Dynamo Ventures (Real Agriculture, 2021). Together with funds of $1.5 million, Sustainable Development Technology Canada (SDTC) (Milk Movement, 2022 c). Thus, the company requires frequent up-gradation and extensive marketing to meet the demands of investors while the challenge and coping with the competition. 

Downside Risks

The size of the fragmented market is enormous as many small farmlands milk cows and buffaloes for earning income. Thus, the market expansion in Canada and other countries would be restricted, which will reduce the profit margins. In addition, the majority of the population is shifting to plant-based products and milk, which will also restrict the market for Milk Movement. 

Business Model Changes

The cloud-based architecture will benefit many customers; hence no changes are required. Also, because the government has been investing in technology and sustainability, the cloud-based business model will be supported through grants. Although, the business model requires a focus on its customer segments. The business model is an excellent example of disruptive innovation as it helps the clients manage their daily operations seamlessly.