This study module provides essential elements to develop an understanding of how a creative business generates, delivers, and capture value. The core concepts of knowledge were delivered throughout the Business model canvas structure. It is one of the most important frameworks as a tool to help managing and visualising the overall elements of the firm logic regarding company structure, company value, network and connections (Osterwalder and Pigneur, 2010). The model consists of nine building blocks which are key partner, key activities, key resources, cost structure, value proposition, customer relationship, customer segment, channels, and revenue streams.
Customer Segments defines a target group of people or organisations the business aim to serve. Value Propositions consists of innovative and specific offers through product or service for a particular segment of customers with added values from the business. Channels define the communication touchpoints to reach the customer and deliver experiences with value proposition. Customer Relationship helps the company to maintain with customer segment the relationship which can vary from personal to automated depending on how it integrates. Revenue Streams represents the money a company generates customer segments through streams of sales, fees, bargaining, auctioning, and etc. Key Resources is the most important assets that allow the firm to create and differentiate the value proposition, maintain a relationship with customer segments and finally generate revenue. Key Activities is the most important actions required to operate the business successfully. Key Partnerships are company alliances of suppliers and partners that help acquiring resources, reducing risk, developing new business, and optimising business model. Cost Structure refers to all costs incurred while operating the business and can be calculated when Key Resources, Key Activities, and Key Partnerships have been defined.
These nine components are expanded alongside the sessions within this study module. Business model is more concrete when applying with each lesson such as branding, Intellectual property, strategic planning, advertising, new venture development and should consider through financial aspects with internal and external funding.
To apply to the business, it is necessary to find what could solve customer problems and how to satisfy their needs. The value proposition will generate through the invention of Intellectual property that is specifically suitable for the business. By learning the Intellectual property subject, it brought together the concept of law we need to know to protect our core value of the business ‘the idea’. It is clear that our creative economy project can be able to generate wealth, jobs and opportunities. It also has to be aware of the agreement upon the use of the creative works which is the most important foundation to build a business within the creative economy. Furthermore, learning branding supports the business to develop the strength to differentiate the brand from others. I have learned not only the brand positioning, but the key elements of the brand perceptions from several perspectives such as consumer, producers, owners, and stakeholders.
The business strategy session made clear of the way to make the key activities happen. This session illustrates the number of tasks that are needed to perform throughout the journey from the beginning to the consumers. Moreover, it relates the relationship with customers which is one of the business model building blocks. Therefore, this session also helps the business to focus at the customer segment. The business needs to define the different groups of people or organisations an enterprise aims to reach and serve. When we know the market, we can justify activities to satisfy the market in order to make a sustainable income and profit.
Finance session is a realistic part of the business. It covers two blocks of the business model framework which are cost structure and revenue streams. To describe all costs incurred while operating under a business model, it can be calculated relatively after defining the key resources, key activities and key partnerships. It is important to scope the economy of the enterprise in order to make revenue streams. Throughout the finance class, it is necessary to think of overall revenue and how to generate it. There are several ways to make revenue streams which include asset sales, fees, licensing, lending, renting, or leasing. In reality, by knowing the break-even point of the sale level and financial ratios, it helps reducing risk in operating the enterprise.
Advertising session develops the understanding of how to use different channels to communicate with customers to reach customers segments and to deliver a value proposition. Channels can be direct and indirect. It can happen in the store, website, and many partner’s platforms. To develop an advertising campaign, the team has to understand the same picture of the brand, the message, the need of customers and why do they purchase. The most important thing I have learned from the lesson is to send a significant message to the target customer segment.
New venture development session covers the knowledge to manage the business key resource and the creative way to expand the possibilities. The business should manage its important assets carefully because it allows an enterprise to create and offer a value proposition, reach the market, maintain customer relationships and earn revenue. Therefore, it is important to understand not only physical assets but also Intellectual assets, human resources, and most importantly financial resource in order to produce the new venture development. I am able to see the whole picture of the business potential so that I can set the target to grow the business life cycle.
All the element in creative business are connected and affected with each other. Some part of it needs to practice in the real business to be clearly understood. Fortunately, I have the Game Simulation from a real business situation “ The Business Strategy Game”, online game reflect the real-world of the globally competitive athletic footwear industry.
My team take over the operation of an athletic footwear company against rival athletic footwear companies run by other team. In this day, the athletic footwear market becomes one of the big markets in the world. There are four geographic market regions to complete to be global market leadership. In each region have different characteristics such as buyer demand. As the real world, The price of athletic footwear is one of the factors to consider before purchase. Moreover, each channel also has different price. The athletic footwear brand has three distribution channels to reach the customer of athletic footwear. Wholesale is the principal way to generate revenue for the company. The retail such as department stores, retail shoe, and apparel stores are the primary distribution channel for merchandise the product. The second channel is Online sales from the company’s website. This channel grows rapidly in every regions. Private-label sales to big outlet retailer. it considers as the same selling as wholesale but the price and margin are lower. To operate this business we have to make a decision in every part of the industry from production until marketing. The industry’s process starts from production at a factory in North America and Asia Pacific region, then ship to a warehouse in all regions for brand distribution, advertising and marketing the product, distribution sell the product to consumer. All part are involved. Therefore, the strategy is the key to drive the decision. One decision that made was the performance of the company in one year. every company start with the same market share volume in year 11. The object is to increase net revenue and equity for attract more investor.
From the first part of the footwear industry, The heart of the business is the product. Therefore, production is important for consideration first. We start with define the position and branding of the company. We set our position at a high price with high quality over the market. By using superior material and enhanced styling and features. Moreover, the production process need to improve such as the use of new equipment, spending for sigma quality control, practices training worker, Higher supervisor salaries. In addition, We focus on the reject rate by reducing the number of model/styles. The model produce, the more the mistake happen. We decide to reduce the number of model than increasing incentive pay per pair. For the production facilities, the existing facility space will expand in the second year. The new facility space will construct in Europe-Africa and Latin America in year 15. The decision to build or expand come from demand of footwear in four regions. After the production process, every pair will be shipped to one of the four region warehouse.
The role of a warehouse is to ensure having enough models and sizes in stock to fill online orders and deliver to retailers. Third part process is to marketing for sale to the buyer. To create brand image and reputation, Celebrity endorsement and brand advertising are significant for marketing. Each celebrity influence consumers in different regions. For the market, in the internet market segment, free shipping is very attractive to online consumers. However, it will impact the cost of sale. A wholesale market segment is different from internet market segment. Because of selling to retailers,
delivery time to the retailer is affected by the distribution’s stock. The last segment is the private label segment. Although, The cost of production for private-label footwear is lower than our brand footwear. The quality and model still meet the specification.
it was a good chance to apply the knowledge that learning from the module. BSG game help understand module from the real situation that happens in the simulation. The market share is not the only measurement that determines the revenue. Moreover, margin is the importance factory which generates profit to the company.