Customer Segments
Segmenting the market is a primary step to creating a successful business model. When deciding which customers are the preferable audience, it is crucial to understand what they want from a product in contrast with what one’s deal can offer (Kumar, 2018). About a chair with ingrained temperature, the main audience would be office workers. Individuals that spend the majority of their time in a sitting position, unable to freely move or change their working location can find more convenience in a chair that offers adjustable heating.
My company will strive to find a balance between an average worker and a person willing to buy a chair for a more premium price (Alto). Furthermore, additional massage functions make the chair more versatile and resistant to being uncomfortable for long periods. People in other occupations that force them to stay in a sitting position may also benefit from this venture, for example, teachers or watchmen. The adjustable height of the chair further enhances its comfort, making it ideal for these types of employees.
Value Propositions
A value proposition is made primarily to explain the defining features of a product. The approach helps companies to define their work against the competition (Twin, 2020). The chair is made with both luxury and convenience in mind. The careful balance between its comfort and functionality brings all of its features to the forefront. The product allows me to offer people a chair that is beneficial to their daily life in terms of both health and convenience. Heat can work to make sitting more comfortable and alleviate back pain.
The heating mechanism can be used to adjust the sitting experience of an individual according to their personal needs, as well as their surrounding circumstances. The seat itself, made presumably out of cotton, offers durability and softness that is indicative of a high-quality product. Having an ability to work in relative comfort enhances productivity and worker motivation. Height adjustment and massage further bring benefit to individuals in expanding the possible variety the chair offers and relieving stress from long work hours.
Channels
Using effective channels to reach the desired audiences is just as important as finding potential customers and understanding the benefits of a proposition. In the current digital age, using the advantage of visual media and the internet to market the product is highly beneficial. The use of virtual channels in tandem with physical ones is proven to yield increased customer response, therefore increasing profit (Business Model Channels – How To Choose The Right Channels 2020).
An online store highlighting the benefits of these particular chairs while allowing customers to browse their selection and make orders seems to be most effective, especially taking into account the recent pandemic. A website as a channel allows people to engage with the product from the comfort of their own homes. Employing physical channels is also important, as it allows customers to interact with the chairs, better understand their measurements and usage. Ensuring a strong physical channel through several storefronts with products on demonstration can be effective in attracting a larger audience.
Customer Relationships
Customer relationships must be focused on creating a favorable impression and establishing a friendly relationship with each existing and potential customer. Through personal assistance during the initial sales phase, the brand can positively influence its customers. Specifically, assistants in physical locations and active customer service in an online storefront will serve to help individuals to choose the best chair for their needs and provide potential buyers with product information.
Customer service is emphasized during every part of the transaction, taking into account customer feedback to ensure the best possible customer experience. After purchase, customers ought to have the ability to further contact customer support upon any inquires or difficulties in using the product. This approach allows the business to establish an active and positive relationship with the client, who is then likely to return for additional services or recommend our chairs to their acquaintances.
Revenue Streams
There are several possible profit sources depending on the nature of a particular business. Asset sales, usage fees, subscriptions, rending schemes, licensing and brokerage fees, as well as advertising are all possible streams of revenue for a business. As my proposed venture is primarily concerned with selling a product, asset sales will be the main source of profit. Customers will acquire full ownership of chairs upon purchase, complete with a warranty and a money-back guarantee policy. Since lending furniture can be considered unfavorable and providing a subscription will be redundant, the direct sale method is the only one to guarantee consistent profit. By selling people products of sufficient quality, the venture will be financially beneficial.
Key Resources
The key resources to sustain the growth and development of the business include both human and material factors. In terms of physical resources, all necessary components to assemble a functioning chair are necessary, including the material for the seat, its carcass, the heating mechanism, the massager, and the height adjustment system. By procuring these resources the company can keep a steady production of new chairs (Key Resources). To acquire materials, however, monetary investment is necessary.
Finances are also required to pay for transportation and office costs. It will be gained through a combination of initial investment, bank loans, and product sales. Multiple spaces to assemble, distribute, and sell chairs are also necessary, with all of the additional expenses connected with operating in a building (electricity, equipment). Vehicles to transport both the materials and the assembled product can also be considered a type of resource. The last type of key resource is human resources, of course. Through employing people of differing specialties, transportation, assembly, management, quality control, counseling, and sales themselves are handled, which is especially important (Key Resources).
Key Activities
The key activities include creating a model for comfortable and cost-effective chairs, determining the types of material that will go into production, and organizing their delivery. Assembly and testing of the chairs is also key to creating a successful product, which is then transported to a location from which it will be sold to a customer. Research into the predicted customer base, their interest, and needs, as well as the buying capability to set correct prices aids in executing a company’s value proposition. Lastly, developing a proper strategy to create an optimal amount of products at the lowest cost and distribute them to the customers is also a part of the key activities.
Key Partners
Key partners for this venture are investors, consulting companies, material suppliers, and other furniture-producing companies. Through careful interactions between these partners, my business will be able to successfully establish its position on the market (Pereira, 2020). Investors will be responsible for supporting the financial well-being of the business and establishing the direction of a company’s development.
Consulting companies can provide expertise on best practices in promotion, marketing, and customer relations. Employing the expertise of an outside party can help in finding new business approaches and gaining a better understanding of the furniture market. Material supplier cooperation is necessary for securing the resources for continued production and providing possible monetary discounts on large purchases. The last key partner is other companies that aim at the same market. By collaboration, both parties can gain insight into market competition and the practices in this particular field.
Cost Structure
The cost structure is the most important, and final, consideration in a new business venture. Depending on the chosen cost structure, the main priorities and approaches of a company are determined, which allows participants to create an effective strategy to proceed (Imke, 2020).
The main expense for this business includes material purchasing costs, worker wages, and various service costs that are connected with assembling and transporting chairs. Taking into account the additional functions our chairs fulfill, I think that using a value-driven approach is more effective. Compared to regular office furniture, the chairs we plan to produce meet more needs of their customers and can be positioned as a relatively expensive luxury. This would allow the company to deliver greater customer value and prioritize buyer satisfaction.
References
Key Resources. Ecommerce Digest. Web.
Business Model Channels – How To Choose The Right Channels. Gary Fox. (2020). Web.
Alto, P. Office Furniture Manufacturer Business Plan – Market Analysis Summary. Bplans. Web.
Kumar, S. (2018). Nine Components Of Business Model Canvas. Web.
Pereira, D. (2020). Key Partners – Business Model Canvas. Business Model Analyst. Web.
Imke, S. (2020). Cost Structures and Your Business Model. How to Advice for your Side-Hustle or Small Business. Web.
Twin, A. (2020). Value Proposition: Why Consumers Should Buy a Product or Use a Service. Web.