Business Models
Content
Institute of professional education and research PGDM-2009-11
Assignment On
|BUSINESS MODELS OF VARIOUS COMPANIES}
SUBMITTED TO:Prof. Mahesh soni
SUBMITTED BY:Praveen Mayar(21)
Airtel¶s Business Model
USP s-Innovation,widest network coverage
Airtel
Telecom services
DTH service
Broadband services
Cellular services
Tele services
Retailer
Customer
SWOT Analysis Bharti Airtel
Strengths
y y
y
y
Bharti Airtel has more than 65 million customers (July 2008 ). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers. Other stakeholders in Bharti Airtel include Sony -Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world. The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base .
Weaknesses
y
y y
An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start -up business had to outsource to industry experts in the field . Until recently Airtel did not own its own towers, which was a particular strengt h of some of its competitors such as Hutchison Essar . The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.
Opportunities
y y y y y
The company possesses a customized version of the Google search engine which will enhance broadband services to customers . The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian fo r Google Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions. Despite being forced to outsource much of its technical operations in the early .
Threats y
Airtel and Vodafone seem to be having an on/off relationship .
y y y
Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market.
Porter five force model
Substitutes
Landline
CDMA Video Conferencing VOIP - Skype, Gtalk, Yahoo Messenger e-Mail & Social Networking Websites
DELL
Dell¶s Business Model
USP s:- Customization Procurement
DELL
Retailer
Internet
Revenue
Customer
Revenue
SWOT Analysis of Dell Computer
Strengths
y y
y
Dell's Direct Model approach of enables the company to offer direct relationships with customers such as corporate and institutional customers Dell Computer's award-winning customer service, industry-leading growth and consistently strong financial performance differentiate the company from competitors(Price for performance,customization,Reliability,service and support). The company's application of the Internet to other parts of the business --including procurement, customer support and relationship management -- is growing at a rate of 30 percent. The company's Web site received at least 25 million visits at more than 50 countryspecific sites.
Weakness
y
y
Dell s biggest weakness is attracting the college student segment of the market. Dell s sales revenue from educational institutions such as colleges only accounts for a measly 5% of the total. Dell s focus on the corporate and government institutional customers somehow affected its ability to form relationships with educational institutions. Since many students purchase their PCs through their schools, Dell is obviously not popular among the college market yet. For home users, Dell s direct method and customization approach posed problems. For one, customers cannot go to retailers because Dell does not use distribution channels. Customers just can t buy Dell as simply as other brands because each product is custom-built according to their specifications and this might take days to finish.
Opportunities
y
y y
Personal computers are becoming a necessity now more than ever. Customers are getting more and more educated about computers. Second-time buyers would most likely avail of Dell s custom-built computers because as their knowledge grows, so do their need to experiment or use some additional computer features. Demand for laptops is also growing. As a matter of fact, demand for laptop has overtaken the demand for desktops. This is another opportunity for Dell to grow in other segments. The internet also provides Dell with greater opportunities since all they have to do now is to visit Dell s website to place their order or to get information. Since Dell does not have retail stores, the online stores would surely make up for its absence. It is also more convenient for customers to shop online than to actually drive and do purchase at a physical store.
Threats y
In a volatile market such as personal computers, threats abound. Computers change in a constant sometime daily basis. New software, new hardware and computer accessories are introduced at a lightning speed. It is essential for Dell therefore to be always on the lookout for new things or introduce new computer systems. The threat to become outmoded is a pulsating reality in a computer business. Not only that, companies must produce products that are high in quality but low in price. This is one challenge that Dell contends with. One of the biggest external threats to Dell is that price difference among brands is getting smaller. Dell s Direct Model attracts customers because it saves cost. Since other companies are able to offer computers at low costs, this could threaten Dell s price-conscious growing customer base. With almost identical prices, price difference is no longer an issue for a customer. They might choose other brands instead of waiting for Dell s customized computers. The growth rate of the computer industry is also slowing down. Today, Dell has the biggest share of the market. If the demand slows down, the competition will become stiffer in the process. Dell has to work doubly hard to differentiate itself from its substitutes to be able to continue holding a significant market share.
y
y
y
y
Technology dictates that the most up-to-date and fastest products are always the most popular. Dell has to always keep up with technological advancements to be able to compete.
Porter s Five Force Model
The competitive force of substitute products The competitive force of substitute products matters when customers are attracted to the products of firms in other industries. Substitute products are a strong force when the sales of substitutes are growing rapidly and/or the producers of substitutes are planning to add new capacity. Typically, we will find that the profits of the producers of substitutes are up, adding incentive for them to compete more aggressively. Competitive pressures from substitute products are strong when: prices of substitutes are attractive and they are readily available buyers' switching costs are low buyers believe substitutes have equal or better features. Competitive force of suppliers Suppliers are a strong competitive force when the item makes up a large portion of product costs, is crucial to production process, and/or significantly affects product quality. Generally in such cases it is costly for buyers to switch suppliers, which have good reputations and growing demand. Suppliers also have a competitive edge when they can supply a component cheaper than industry members can make it themselves. They are in the strongest position when they do not have to contend with substitutes themselves. When these factors exist, buying firms are not important customers. As a general principle of competitive markets suppliers are a stronger force the more they can exercise power over: prices charged; quality/performance of items supplied; and, the amounts and delivery times. In summary, the key factors determining the competitive force of powerful suppliers are: few suppliers unique product high switching costs threat of forward integration supplier has cost or quality advantage unimportant industry for supplier.
Dabur FMCG COMPANY Usp s- Herbal products,R&D
Upstream partners
Dabur
Downstream Partners
Retailers
Consumers
SWOT of Dabur
Strength
y y y y
Having alliance with other strong and popular business is a major plus point for dabour India as it help bring in new customer and make business more effective. Being a market leader as dabour India is, is key to their success as it boost reputation profit and market revenue Competitive pricing is a vital elements of dabour indias overall success, as this keeps them link with their rivals Dabour India has a extensive customer base, which major strength regarding salces and profit.
y Dabour India s reputation is strong and popular, meaning people view it with respect and believe in it.
Weakness
y y y y
A series weakness for dabour India is the fact their product/services are of low quality. Meaning people have better quality substitute. Over pricing setting to high price for dabour India s product/services make them uncompetitive. Problem with stock is major weakness as they need to keep up with demand. Onion presence is a vital for success these days and lack of one is limitation for dabour India. Dabour India is a limited product lion is major weakness.
y
Opportunities
y y y y
Dabour India could benefit from government support, in the form of grant, allowances training etc. Looking at export opportunities is way for dabour India to raise profits. As the economic climates improve so do the opportunities for dabour India. Reaching out into other markets is a possibility for dabour India and big opportunities
y Structural change in the industry opens the other doors and opportunities for dabour India. Threats
y y y y
Consumer life style change could lead to less of a demand for dabour India s product/services. Change in demographic could threaten dabour India. Extra competition and new competitor entering in the market could unsteady for dabour. Raising cost could major downfall for dabour as it would eat into profit. Substitutes product are available in the market present a major threats for dabour.
Substitutes of Dabur y Kerala hub of ayurveda. Foreign products, HUL products,
Mcdonalds
Business model Usp s:- Value for money,customer delight
Upstream partners
Mcdonalds
Raw materials
Franchise
consumer
SWOT analysis
STRENGTH
Large market share Strong supply chain Strong brand name, image, and position Strong financial position and performance Affordable price and high quality product Nutritional information available on packing Specialized training for manager known as the hamburger university Strong global presence & performance in the global market
WEAKNESS
Seasonal Legal action related to health issue, use of Trans fat & brief oil Customer losses due to fierce competition Location of outlets are sometimes are not to closer to storage center so due to which it affect on quality Break even sales can generated after operating for a certain number of year only Low cost menu that will attract the customer Joint ventures with retailer (supe rmarkets) Focus on middle class income group customer with low price quality goods will enhance the profit margin Growing health trend among consumer
THREAT
Focus by consumer on nutrition and healthier lifestyle Anti-American segment Relation between corporate level McDonalds and the franchise dealer Environmental pressure Competitors threatened the market share of the company both internationally and domestically.
PORTERS FIVE -FORCE MODELS
COMPETITION Restaurant industry is highly competitive industry. There are many fast foot business in the industry who may fight with each other to improve there customer base McDonalds is not the exception. McDonalds came out with the breakfast to compete with the existing business serving the breakfast. Hence this industry is extremely competitive and MDC should be up to dated with the customer taste and preference.
EASE TO ENTER Although it is hard to enter into the restaurant business and to established it brand name. There is high cost of entry in the market and there is high research and development cost, large strong company with strong brand identity such as McDonald do to make it more difficult to enter and succeed within the marketplace new entrant find that they are faced with price competition from existing chain restaurant SUBSTITUTES There are many substitutes in the industry. Since there are wide varieties of product that people can choose, they could either be substituted by MDC burger, beverages dairy products and other. SUPPLER Power of supplier within the fast food industry would be relatively small. Unless the main integrants of the product is not readily available BUYER Relatively strength of buyer is low in the industry
HUL
.
BUSINESS MODEL USP s-Distribution channel
HUL
CARRYING & FORWARDING AGENT
DISTRIBUTION STOKIST
WHOLESALLER
RETAILER
URBAN RETAILER
CONSUMERS
SWOT ANALYSIS
STRENGTH
Wide distribution channel with over 3400 distribution and 16 main outlets growth rate is high Innovative Aspects Presence of Established distribution network in both. Strong R& D
Highly skilled HR Effective CSR
WEAKNESSES
Strong Competitors Low Export Level (At Present) Changing consumption pattern High advertising costs
OPPORTUNITIES
Large domestic Market Untapped rural Market Changing life styles & rising income levels
THREATS
Tax & Regulatory structure Mimic of brands New Entrants Increasing cost of raw material.
Assignment On
|BUSINESS MODELS OF VARIOUS COMPANIES}
SUBMITTED TO:Prof. Mahesh soni
SUBMITTED BY:Praveen Mayar(21)
Airtel¶s Business Model
USP s-Innovation,widest network coverage
Airtel
Telecom services
DTH service
Broadband services
Cellular services
Tele services
Retailer
Customer
SWOT Analysis Bharti Airtel
Strengths
y y
y
y
Bharti Airtel has more than 65 million customers (July 2008 ). It is the largest cellular provider in India, and also supplies broadband and telephone services - as well as many other telecommunications services to both domestic and corporate customers. Other stakeholders in Bharti Airtel include Sony -Ericsson, Nokia - and Sing Tel, with whom they hold a strategic alliance. This means that the business has access to knowledge and technology from other parts of the telecommunications world. The company has covered the entire Indian nation with its network. This has underpinned its large and rising customer base .
Weaknesses
y
y y
An often cited original weakness is that when the business was started by Sunil Bharti Mittal over 15 years ago, the business has little knowledge and experience of how a cellular telephone system actually worked. So the start -up business had to outsource to industry experts in the field . Until recently Airtel did not own its own towers, which was a particular strengt h of some of its competitors such as Hutchison Essar . The fact that the Airtel has not pulled off a deal with South Africa's MTN could signal the lack of any real emerging market investment opportunity for the business once the Indian market has become mature.
Opportunities
y y y y y
The company possesses a customized version of the Google search engine which will enhance broadband services to customers . The tie-up with Google can only enhance the Airtel brand, and also provides advertising opportunities in Indian fo r Google Global telecommunications and new technology brands see Airtel as a key strategic player in the Indian market. The new iPhone will be launched in India via an Airtel distributorship. Another strategic partnership is held with BlackBerry Wireless Solutions. Despite being forced to outsource much of its technical operations in the early .
Threats y
Airtel and Vodafone seem to be having an on/off relationship .
y y y
Vodafone which owned a 5.6% stake in the Airtel business sold it back to Airtel, and instead invested in its rival Hutchison Essar. Knowledge and technology previously available to Airtel now moves into the hands of one of its competitors The quickly changing pace of the global telecommunications industry could tempt Airtel to go along the acquisition trail which may make it vulnerable if the world goes into recession. Perhaps this was an impact upon the decision not to proceed with talks about the potential purchase of South Africa's MTN in May 2008. This opened the door for talks between Reliance Communication's Anil Ambani and MTN, allowing a competing Inidan industrialist to invest in the new emerging African telecommunications market.
Porter five force model
Substitutes
Landline
CDMA Video Conferencing VOIP - Skype, Gtalk, Yahoo Messenger e-Mail & Social Networking Websites
DELL
Dell¶s Business Model
USP s:- Customization Procurement
DELL
Retailer
Internet
Revenue
Customer
Revenue
SWOT Analysis of Dell Computer
Strengths
y y
y
Dell's Direct Model approach of enables the company to offer direct relationships with customers such as corporate and institutional customers Dell Computer's award-winning customer service, industry-leading growth and consistently strong financial performance differentiate the company from competitors(Price for performance,customization,Reliability,service and support). The company's application of the Internet to other parts of the business --including procurement, customer support and relationship management -- is growing at a rate of 30 percent. The company's Web site received at least 25 million visits at more than 50 countryspecific sites.
Weakness
y
y
Dell s biggest weakness is attracting the college student segment of the market. Dell s sales revenue from educational institutions such as colleges only accounts for a measly 5% of the total. Dell s focus on the corporate and government institutional customers somehow affected its ability to form relationships with educational institutions. Since many students purchase their PCs through their schools, Dell is obviously not popular among the college market yet. For home users, Dell s direct method and customization approach posed problems. For one, customers cannot go to retailers because Dell does not use distribution channels. Customers just can t buy Dell as simply as other brands because each product is custom-built according to their specifications and this might take days to finish.
Opportunities
y
y y
Personal computers are becoming a necessity now more than ever. Customers are getting more and more educated about computers. Second-time buyers would most likely avail of Dell s custom-built computers because as their knowledge grows, so do their need to experiment or use some additional computer features. Demand for laptops is also growing. As a matter of fact, demand for laptop has overtaken the demand for desktops. This is another opportunity for Dell to grow in other segments. The internet also provides Dell with greater opportunities since all they have to do now is to visit Dell s website to place their order or to get information. Since Dell does not have retail stores, the online stores would surely make up for its absence. It is also more convenient for customers to shop online than to actually drive and do purchase at a physical store.
Threats y
In a volatile market such as personal computers, threats abound. Computers change in a constant sometime daily basis. New software, new hardware and computer accessories are introduced at a lightning speed. It is essential for Dell therefore to be always on the lookout for new things or introduce new computer systems. The threat to become outmoded is a pulsating reality in a computer business. Not only that, companies must produce products that are high in quality but low in price. This is one challenge that Dell contends with. One of the biggest external threats to Dell is that price difference among brands is getting smaller. Dell s Direct Model attracts customers because it saves cost. Since other companies are able to offer computers at low costs, this could threaten Dell s price-conscious growing customer base. With almost identical prices, price difference is no longer an issue for a customer. They might choose other brands instead of waiting for Dell s customized computers. The growth rate of the computer industry is also slowing down. Today, Dell has the biggest share of the market. If the demand slows down, the competition will become stiffer in the process. Dell has to work doubly hard to differentiate itself from its substitutes to be able to continue holding a significant market share.
y
y
y
y
Technology dictates that the most up-to-date and fastest products are always the most popular. Dell has to always keep up with technological advancements to be able to compete.
Porter s Five Force Model
The competitive force of substitute products The competitive force of substitute products matters when customers are attracted to the products of firms in other industries. Substitute products are a strong force when the sales of substitutes are growing rapidly and/or the producers of substitutes are planning to add new capacity. Typically, we will find that the profits of the producers of substitutes are up, adding incentive for them to compete more aggressively. Competitive pressures from substitute products are strong when: prices of substitutes are attractive and they are readily available buyers' switching costs are low buyers believe substitutes have equal or better features. Competitive force of suppliers Suppliers are a strong competitive force when the item makes up a large portion of product costs, is crucial to production process, and/or significantly affects product quality. Generally in such cases it is costly for buyers to switch suppliers, which have good reputations and growing demand. Suppliers also have a competitive edge when they can supply a component cheaper than industry members can make it themselves. They are in the strongest position when they do not have to contend with substitutes themselves. When these factors exist, buying firms are not important customers. As a general principle of competitive markets suppliers are a stronger force the more they can exercise power over: prices charged; quality/performance of items supplied; and, the amounts and delivery times. In summary, the key factors determining the competitive force of powerful suppliers are: few suppliers unique product high switching costs threat of forward integration supplier has cost or quality advantage unimportant industry for supplier.
Dabur FMCG COMPANY Usp s- Herbal products,R&D
Upstream partners
Dabur
Downstream Partners
Retailers
Consumers
SWOT of Dabur
Strength
y y y y
Having alliance with other strong and popular business is a major plus point for dabour India as it help bring in new customer and make business more effective. Being a market leader as dabour India is, is key to their success as it boost reputation profit and market revenue Competitive pricing is a vital elements of dabour indias overall success, as this keeps them link with their rivals Dabour India has a extensive customer base, which major strength regarding salces and profit.
y Dabour India s reputation is strong and popular, meaning people view it with respect and believe in it.
Weakness
y y y y
A series weakness for dabour India is the fact their product/services are of low quality. Meaning people have better quality substitute. Over pricing setting to high price for dabour India s product/services make them uncompetitive. Problem with stock is major weakness as they need to keep up with demand. Onion presence is a vital for success these days and lack of one is limitation for dabour India. Dabour India is a limited product lion is major weakness.
y
Opportunities
y y y y
Dabour India could benefit from government support, in the form of grant, allowances training etc. Looking at export opportunities is way for dabour India to raise profits. As the economic climates improve so do the opportunities for dabour India. Reaching out into other markets is a possibility for dabour India and big opportunities
y Structural change in the industry opens the other doors and opportunities for dabour India. Threats
y y y y
Consumer life style change could lead to less of a demand for dabour India s product/services. Change in demographic could threaten dabour India. Extra competition and new competitor entering in the market could unsteady for dabour. Raising cost could major downfall for dabour as it would eat into profit. Substitutes product are available in the market present a major threats for dabour.
Substitutes of Dabur y Kerala hub of ayurveda. Foreign products, HUL products,
Mcdonalds
Business model Usp s:- Value for money,customer delight
Upstream partners
Mcdonalds
Raw materials
Franchise
consumer
SWOT analysis
STRENGTH
Large market share Strong supply chain Strong brand name, image, and position Strong financial position and performance Affordable price and high quality product Nutritional information available on packing Specialized training for manager known as the hamburger university Strong global presence & performance in the global market
WEAKNESS
Seasonal Legal action related to health issue, use of Trans fat & brief oil Customer losses due to fierce competition Location of outlets are sometimes are not to closer to storage center so due to which it affect on quality Break even sales can generated after operating for a certain number of year only Low cost menu that will attract the customer Joint ventures with retailer (supe rmarkets) Focus on middle class income group customer with low price quality goods will enhance the profit margin Growing health trend among consumer
THREAT
Focus by consumer on nutrition and healthier lifestyle Anti-American segment Relation between corporate level McDonalds and the franchise dealer Environmental pressure Competitors threatened the market share of the company both internationally and domestically.
PORTERS FIVE -FORCE MODELS
COMPETITION Restaurant industry is highly competitive industry. There are many fast foot business in the industry who may fight with each other to improve there customer base McDonalds is not the exception. McDonalds came out with the breakfast to compete with the existing business serving the breakfast. Hence this industry is extremely competitive and MDC should be up to dated with the customer taste and preference.
EASE TO ENTER Although it is hard to enter into the restaurant business and to established it brand name. There is high cost of entry in the market and there is high research and development cost, large strong company with strong brand identity such as McDonald do to make it more difficult to enter and succeed within the marketplace new entrant find that they are faced with price competition from existing chain restaurant SUBSTITUTES There are many substitutes in the industry. Since there are wide varieties of product that people can choose, they could either be substituted by MDC burger, beverages dairy products and other. SUPPLER Power of supplier within the fast food industry would be relatively small. Unless the main integrants of the product is not readily available BUYER Relatively strength of buyer is low in the industry
HUL
.
BUSINESS MODEL USP s-Distribution channel
HUL
CARRYING & FORWARDING AGENT
DISTRIBUTION STOKIST
WHOLESALLER
RETAILER
URBAN RETAILER
CONSUMERS
SWOT ANALYSIS
STRENGTH
Wide distribution channel with over 3400 distribution and 16 main outlets growth rate is high Innovative Aspects Presence of Established distribution network in both. Strong R& D
Highly skilled HR Effective CSR
WEAKNESSES
Strong Competitors Low Export Level (At Present) Changing consumption pattern High advertising costs
OPPORTUNITIES
Large domestic Market Untapped rural Market Changing life styles & rising income levels
THREATS
Tax & Regulatory structure Mimic of brands New Entrants Increasing cost of raw material.
