The business model

This is our Business Model 1.0

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The business model Canvas

1. Customer segment

Our product is targeted to what we called « people on the move ». Those people include commuters, travelers, adventurers, etc. But we will especially focus on two big customer segments:

  • the Students and
  • the workers

i.            Student’s needs: price, health, time(less than workers), tasty food

ii.            Workers need: price(less than Students), health, tasty food, quality food, TIME

Those two segments will be our most important customers:

Students often want to eat well and healthy but at a low price. The product will allow them to heat their own food on the go.

The workers often don’t have a lot of time to eat, but they still need healthy and high quality food. The product gives them the choice to eat what they want, as they can cook their own food, keep it fresh in the product, and eat it whenever they want.

In addition, the product will allow both of them to keep a healthy diet without spending a lot of money on restaurants and fast food, at work or on the go.

Finally, our lunch box will allow customers to reduce the waste of food that they didn’t eat from last meals. The lunch box will keep the food fresh until they want to eat.

Our global strategy is almost like targeting the mass market, as we will offer only one product (one size fits all) for the different customer segments. We characterize it as a mass market strategy also because we assume that students and workers have similar needs and problems in terms of food conveniences (they both need to heat the food on the go, to eat cheaper but also better, and to reduce the waste of food).

The only factors that separate them are:

  • the distribution channels and
  • The price they are willing to pay.

For the latter this is not distinguished in our business model as we plan to offer the product only at one single price for everyone.

2.    Value Propostitions

Nowadays people use lunch boxes to store the food during the day, but these lunch boxes are not really convenient for different reasons:

  1. There is no special material to keep the food fresh;
  2. The food can’t be heated directly from the lunch box;
  3. The box is in plastic, often takes a lot of space in the bag:
      • Customer have to buy different sizes,
      • Not costly efficiency

Our product has to be very convenient and usable, it will be the main value delivered to the customer. Therefore our value propositions are:

  1. Flexible, portable, practical box:Our lunchbox has a flexible material that can expand and adapt to the size of the food, so it doesn’t take much space. Customer will buy one box only, no need for different sizes.
  2.  Heating the food on the go thanks to its “plugability”:Our lunchbox can be plugged in different ways: usb, normal plug (house). So this allows heating the food wherever you go.
  3. Freedom of choice:Customer can chose the food they want to eat. Therefore it allows eating their preferred food, to save money and to eat healthy all at the same time.
  4. Low price point: We plan to sell the lunch box for 35 euros maximum. This replaces 7 average meals in a most universities and fast food restaurants. As the product allows for many years of use, we consider it as being low priced because it allows saving much more money than it costs.
  5. Stylish : We want it to have an attractive design for the customer but also to stay discrete, as most people don’t consider the product to be a “fashion” product.

 3.    Channels

We plan to use direct and indirect channels in order to reach our customers:

Channels      
DIRECT WEBSITE/WEB SALES:Customer will be able to buy the product through our product website STREET SALES (in-house sales force):We will sell the product in the streets, in front of universities and in commercial zones through:

  • Pop-up shops
  • Carts & vans

We will allow the customer to try the product directly before buying it.
INDIRECT PARTNER STORES:We will sell the product through specialized stores for home accessories PARTNER WEBSITES:We will take advantage of popular websites like amazon.com in order to increase our visibility as well as to allow people to review our product => increase the confidence of our brand.

 

 

4. Customer Relationships

“Self-service”

The product we offer doesn’t need to create a direct relationship with our customer, as it is very easy to use and doesn’t need further assistance after buying the product.

Therefore our company will maintain a “Self-service” type relationship with our customers.

 “co-creation”

Despite the fact that our product does not need a continuous interaction between both the company and the customer, we still need to create a strong relationship between the customer and our brand in order to both increase our visibility, and to ensure the future of the product(s).

Therefore, we think that the best way to create a durable relationship between the customer and the brand is to engage the customer into the development & improvement & design of our product.

To do this we will make available a blog and a community forum, where the company will listen to the suggestions and the feedback from the community.

Whenever a good idea is posted in the forum, we will give the opportunity to the community to vote “for” or “against”. Each month or year we will take the best new ideas and implement it into our product.

5. Revenue streams

We will generate revenue from selling the physical product. It is a one-time payment at the moment of the purchase.

Our price strategy is to have fixed price. As our product is the same for each customer segment (it’s obvious that we will not apply different prices for the same product).

NB: prices could change between countries, but not within a country.

6. Key resources

    • HR:

As our business will mostly be outsourced, we will mainly focus on human resources as our principal key resource. The sales management and the marketing will be made in-house and will be assigned to the entire process of production of our product. For the technical part of the production which is building the product, we will outsource it to partners in other countries that already use capital-intensive facilities as their principal resource of production.

    • Financing:

We will also need financing. Thanks to our business model we hope to receive a starting capital either from the bank, a business angel or from crowd funding.

    • Intellectual

We need to create a brand that will deliver real value to the customer, this means we need the brand to be a key resource that will allow us to sell more than our competitors.

In the same way, we will need to patent both the concept and the technology used so we can protect ourselves from the competition. This will be an important resource for the company.

7. Key activities

Our business model will require:

  • Strong management:
    1. Supply chain management (include outsourcing and relationship with partners)
    2. Sales force management
    3. Sales management (quantities, price, market analysis, strategy etc.)
    4. Finding financial resources
  • Production activities:
    1. Designing
    2. Website management
    3. Making the product
    4. Delivering
  • Marketing (Marketing makes one of the most important activities in our company as we need to create a strong and visible brand)
    1. Sales
    2. Branding activities (increasing visibility, improving brand image etc.)
    3. After-sales

 

8. Key Partnerships

Our business model is based on strong partnerships with suppliers (Buyer-supplier relationship will be important to assure reliable supplies), manufacturers and logistic companies.

We will rely on partners for key activities of:

  • Producing the product* (outsource to companies using capital-intensive facilities)
  • Logistics (to deliver the product to customers)
  • Buyer-supplier relationship will be very important to assure reliable supplies, as the product will be produced abroad – reducing the risk & uncertainty
  • Technology companies (for the technical part of the product, technical improvement of the product)
  • Delivering the product to customer through :

a)      Erasmus organizations & Universities**
b)      Specialized stores/companies that sell home accessories

*Outsourcing the product:

In the production process, the partnership with manufacturers will allow us to outsource our production, therefore reducing the cost by taking advantage of the economies of scale from specialized capital-intensive companies.

**Delivering the product through Erasmus organizations and universities

As our main customer segment is the Students, we plan to give reduction coupons for our product for each student from universities and from Erasmus organizations. If the university and/or the Erasmus organizations give a welcome pack we will try to include the product into the welcome pack.

9. Cost structure

Cost overview:

Our business model is in between cost-driven structure and value-driven structure. In fact we will try to deliver a great and innovative experience at a middle cost.

The price of our lunch box will be above the normal average plastic lunch box as our product is a great improvement from the basic one. In the other hand our product will be also more expensive to build compared to other lunch boxes first because of the advanced materials we will use and second because of the heating plates used to heat the food (Cost of goods sold).

The bulk part of the costs comes from the Marketing and the Production process.

 

NB:

  • The production process is separated in two different activities:

i.            The designing, making, delivering the product. In-house

ii.            The capital-intensive production. Outsourced

  • Our product is scalable and so we will take advantage of economies of scale through our partners. This will dramatically decrease the cost of production.

Other activities will be outsourced (logistics, technology…); they will represent a lower portion of the cost compared to marketing and production.

            Cost structure:

1. Fixed cost

Our fixed cost will be mainly salaries and renting the place, we will not need any expensive facilities to do our key activities.

  • Employees’ salaries and benefits
  • Gas, electricity & light
  • Property rent and taxes
  • Website maintenance

The biggest fixed expense will come from salaries as our business model requires a lot of HR.

 

2. Variable costs:

a)      Cost of goods sold: primary materials for the lunch box (largest variable expense):

    • Heating flexible plates
    • Lunch box flexible material
    • Electronic plugs (usb, car plug etc.)
    • Zipper
    • Others…

b)      Operating costs:

    • Transportation cost (FedEx, UPS, DHL, rail, trucking, boat companies…):

                                                         i.            From Website => cost of importing to the retailer + cost of delivery to the doorsteps

                                                       ii.            From specialized stores => cost of importing to the retailer

                                                      iii.            Other  (Pop-ups and carts) => cost of importing to the retailer

    • Commissions for sales force (based on total sales)
    • Commissions to partners retail stores.
    • Credit card fees
    • Others…

 

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