Business Model for EasyJuicy - Market Analysis, Unique Value Proposition, Product and Service Solutions - Case Study Example

Running Head: BUSINESS MODEL ANALYSIS: EASYJUICY Business Model Analysis: EasyJuicy Introduction This analysis is based on a reflection about a business model and evaluation of its feasibility. The model in question is on a business of selling a special type of orange juicer that shall be introduced to the market under the brand name EasyJuicy. This is a product that offers fast orange squeezing without the need for cutting or peeling the oranges and can be used in homes and cafés. The reflection, analysis and evaluation of the business model is based on the core components of a business model which are as follows: (1) customer value proposition; (2) market segment; (3) revenue model; (4) growth model; and (5) the capabilities of the business. Opportunity Opportunities for start up ventures are created as a result of an entrepreneur identifying a specific need and devising an innovative, viable and profitable means of meeting the need (George & Bock, 2012, p. 31). In this business model, it can be seen that the opportunity for launching a business venture that sells EasyJuicy, the new and innovative orange juicer, arises from a situation in the market where there is a need for a small juicer that is both efficient and innovative. Whereas there are many individuals who would like to make orange juice in their homes fast and without the need to cut or peel their fruit, they lack a machine that is affordable and can fulfil this function. It is not within households only that there exists the need for such a machine; small cafes which act as vendors of orange juice are also in need of such a machine. For such cafes, although there are several alternatives, most of the commercial machines are expensive and this is an inconvenience to them. This new machine will solve this problem since it will enable users to make orange juice from oranges pretty fast and without the need to peel or cut the fruit. The size of the market for orange juicers can be well understood when one considers the overall size for the market for home appliances. According to Statista (2014) this is a multi-billion dollar market with 583 million appliances being sold globally in 2013. The market segment for juicers falls under two major categories: commercial and domestic users. Commercial users are small-sized cafes who act as vendors of fresh orange juice. Although there are different types of such vendors, including large-scale outfits such as supermarkets and restaurant chains, only small-sized cafes will be targeted by EasyJuicy. Domestic users include all individuals who make and consume fresh orange juice in their homes. Market Analysis Generally, the outlook of the market for home appliances remains positive. For example, according to a research by Krause Fund Research (2014, p. 1), it is expected that the market for home appliances will become concentrated in the near future. This will be important in shaping the strategies that will be adopted for marketing EasyJuicy. Several trends are shaping the market for home appliances in general and that for kitchen appliances in particular. However, one notable trend according to Intertek (2009, p. 4) is the growing demand for smart products. Smart products can be defined as appliances that have been specially manufactured so that they consume less energy when in use and are more ergonomic to users (Intertek, 2009, p. 5). Since the demand for such products has been rising in the recent past and manufacturers and retailers have responded to the rising demand, this is a trend that will shape the industry for a considerable length of time. Segmentation of the market for EasyJuicy depends heavily on the overall market for orange juice. This is because it is the manufacturing and retail outlets for juice that will form the market for the product. Generally, the outlook of the market for orange juice has been positive for a long time with the penetration of juice consumption at the domestic level remaining high (Abate, 2005, p. 1). From the model, the primary market segment is composed of individuals who are interested in making large amounts of juice from their homes. The second segment is small-sized vendors of orange juice. Since Abate (2005, p. 3) observes that this type of vendors have posed a rising challenge to traditional manufacturers of orange juice who are mainly large global companies, this will be an important segment. Therefore, the marketing mix for EasyJuicy will be prepared with these two market segments in mind. Although this has not been established, there is the possibility of marketing EasyJuicy to small institutions. If so, such small institutions will form an alternative market segment for the product. Unique Value Proposition The unique value proposition of the company lies in the unique ways in which it meets specific needs of the clients in the market. From the business model of selling EasyJuicy, there are several ways in which the unique needs of the customers will be met. First, this will be done by the attributes of the product. It has already been stated that the juicer that is to be introduced to the market will be made in such a manner that a user will not have to peel off oranges before using the device to make juice. This attribute will make the juicer convenient for customer use. The second reason why EasyJuicy will be different from the competition arises from the pricing that will be used. Ideally, many electric juicers that are in the market currently retail at an average price of US$ 400. These are medium-sized juicers that can be used within homes where heavy juicing is carried out and in small cafes. However, it is seen that EasyJuicy will retail at a price that is less than US$ 400. Therefore, the new product will be unique in that it will offer clients the benefit of technological innovation that will enable them to make orange juice easily and much faster while at the same time spending much less on the juicers. Solutions (Product/Service) There are several alternative products that the company can offer. This is because many manufacturers in the industry have been established as makers of a wide range of kitchen and general home appliances. Therefore, from the business model, it is possible for the company to manufacture other kitchen appliances such as toasters, coffee makers and mixers. Just as is the case with EasyJuicy, the alternative products will be differentiated from the competition by having the highest level of technological innovation yet retailing at prices that are considered average. This approach will be used to target a market similar to that targeted in the marketing of EasyJuicy. This way, the company will benefit by diversifying its revenue streams – a process that can be used to speed up its growth and expansion. Unfair Advantage (Competitor Analysis) EasyJuicy will compete with a number of other leading brands that are manufactured by global manufacturers of home appliances such as Electrolux, Whirlpool and LG. Some of the major competitors include Acme 6001, Champion 2000+ and Breville JE 98XL Juice Fountain. These brands are direct competitors because they retail at an average price of US$ 300, can be used to extract juice from other fruits apart from oranges, and have been made to target a market segment similar to that for EasyJuicy. The company will have several competitive advantages. First, the advanced use of new technology in the design and manufacture of EasyJuicy will be an important competitive advantage since by using it, the company will be able to offer consumers in the market products that are superior to the other brands. Second, intense use of information and communication technology will be an important competitive advantage since it will enable the company to keep up with the trends of online shopping. The third competitive advantage would be the small size of the company since this will allow for lean and efficient manufacturing practices as opposed to what other large scale competitors are using. Profitability In theory, there are different types of revenue models form which an organisation can choose. Such models include asset sales, leasing, advertising, subscription fees, and brokerage fees (Afuah, 2014, p. 8). From the model, it is clear that the company will derive its revenues from the sale of the products to clients using the retail model. It will be important for the company to develop an appropriate pricing approach for the juicers. This is because the price at which the juicers will be offered will not only determine the volume of revenue and consequently the level of profitability, but will also become an important competitive advantage in the market. Conclusion The business model of manufacturing and selling EasyJuicy, a new and innovative type of orange juice, is feasible. There is an opportunity for such a product in the market and using the right marketing mix, the business idea can be successfully implemented regardless of the stiff competition that is currently being witnessed in the market for kitchen appliances in general. References Abate, G. (2005). The market for orange juice – challenges and opportunities. MSU Working Centre Working Paper 2 – 102605. Retrieved from http://productcenter.msu.edu/uploads/files/orangejuice.pdf Afuah, A. (2014). Business model innovation: Concepts, analysis and cases. New York: Routledge. George, G., & Bock, A., J. (2012). Models of opportunity: How entrepreneurs design firms to achieve the unexpected. London: Cambridge University Press. Intertek (2009). Evolving smart technologies across home appliance and consumer electronics market. Retrieved from http://www.appliancedesign.com/ext/resources/AM/Home/Files/PDFs/EvolvingSmartTechnologies.pdf Krause Fund Research (2014). Home appliance – Whirlpool Incorporated. Retrieved from http://tippie.uiowa.edu/krause/spring2014/whr_s14.pdf Statista (2014). Statistics and facts about the home appliances industry. Retrieved from http://www.statista.com/topics/1068/home-appliances/ Read More