Introduction
The SIMM Labs is an electronics company focused on manufacturing new smartwatch devices with similar digital smartphones. Following the decline of the traditional wristwatch, Diego, an innovative entrepreneur in the technological industry, introduced the concept of digital wristwatches that hold a user’s web data. By utilizing the ever-evolving technology, Diego introduced the smartwatch in the electronics industry, initially intended for male technophiles. Smartwatch products gradually began to gain demand, and more investments were directed to the development of wearable technology. However, SIMM Labs is struggling to grow and develop due to its existing business model. The essay below highlights a new and effective business model the company can employ to prosper and offers a value proposition statement and a well-detailed business model canvas.
The Value Proposition Statement
The partnership will be essential in ensuring that the financial needs of the company are met and that the clients’ issues are promptly addressed without any prejudice or favoritism.
Key Partnerships
To stimulate the growth of SIMMS Labs, venturing into strategic partnerships is a prudent approach to achieve the objective. Many companies support electronic companies and devices; however, it is strategic to choose a company that supports smartwatch technology. Resco company is, therefore, the ideal company to venture into a partnership with for strategic benefits. Resco company is a leader in the development of cross-platform mobile software resolutions across the globe.
The company provides a conducive environment for other companies to enter into a mutually beneficial partnerships. Resco company provides its partners with flexible and straightforward opportunities to enable them to change their approach to handling customers. Therefore, the Resco company is the most strategic and convenient partner for SIMMS Labs to collaborate to achieve market growth and competitive advantage.
Key Activities
Moreover, SIMMS Labs can engage in various innovative activities that create value for the consumer. First, SIMMS Labs can engage in the development of creative smartwatch designs. The majority of the smartwatches in the market are not attractive, while others are built using inferior plastic that resembles toys. In this regard, SIMMS Labs can gain a competitive advantage by embarking on designing and creating smartwatch products that are attractive to wear and meet consumer expectations. Unlike most smartwatch producers, SIMMS Labs can differentiate itself by engaging in activities to create more value for its market.
Value Proposition
There are various scenarios in which a smartwatch can avail value to customers. SIMMS Labs can offer smartwatch products that enhance productivity, optimize processes and ensure worker safety for employees. The company develops smartwatches that are more convenient and appropriate in scenarios that contemporary smartphones and laptops are not suitable for. SIMMS Labs improves the experience of its customers by integrating utilities and other features that are crucial in satisfying customer needs and wants. The features mentioned above satisfy trending customer needs and hence create value.
Audience Relationship
SIMMS Labs can develop a healthy relationship with its clientele and investors. The company can stimulate a significant relationship with its customers through active engagement in social media. SIMMS Lab can develop such a relationship by constantly addressing customers’ queries through social media platforms such as Facebook, Twitter, and Instagram. Also, the company should value every feedback, whether it is positive or negative. SIMMS Labs can also manage and meet the expectation of its investors. The company can establish a contractual relationship with investors that encourage it to meet its expectations for favorable funding. The company should therefore establish a relationship that is beyond a transaction or contractual relationship which is more beneficial for any company.
Audience Segmentation
Additionally, the smartwatch should satisfy and exceed the needs of its users, or else it will barely survive in the electronics industry. SIMMS Labs should provide value to customers by engaging in extensive research and development to discover valuable features and predict new trends in consumer taste and preferences. Also, the company should satisfy the interest of its investors. Investors are only concerned with generating and expanding their investment capitals. Thus, SIMMS Labs should implement products that attract high consumption rates and sales. Consequently, the company will achieve a high-profit ratio through increased sales of smartwatch products.
Distribution Channels
SIMMS Labs can utilize both direct and indirect distribution channels. The company sells directly to consumers through physical retail stores. As a result, consumers can ask questions for clarification and receive after-sale services, such as repairs. Also, the consumers can learn about how to use the smartwatch and its features, thus providing a valuable shopping experience for the consumers. The company can utilize indirect distribution channels by selling to wholesalers and retailers in bulk quantities. Consequently, the smartwatch products can reach far-away markets and reduce costs and risks associated with transport and warehousing.
Key Resources
There are various materials used to develop new smartwatch commodities. First, stainless steel is the most used material to produce quality wristwatches across the globe. SIMMS Labs can utilize stainless steel to manufacture products with long-lasting durability and resistance. The company can also design unique patterns to enhance the smartwatch’s outlook by utilizing design resources such as layout specifications and sketch guides. Also, the company can utilize sophisticated processing systems that ensure high-quality output.
Cost Structure
The cost of the SIMMS smartwatch should cost the least amount to produce, as a proportion of the sales price, compared to competitors. The costs incurred in research and development, transport and storage, and marketing are not included in the product price—the cost of integrating the essential components of the product sum up to determine the total cost. For instance, the least costly watch component should be the power source, which costs $1, while the most expensive of the category is the touch screen display, which costs $19.25. The cost of the product should be a fourth of the market price. Therefore, the cost should be less than the product price to facilitate the achievement of significant profits.
Revenue Profit/Substitutes
Significant profits determine the survival and success of a company in any industry. The company should therefore generate commendable revenues that will facilitate the expansion of production and satisfy company investors. The company should set the product price depending on the cost of production. The market price should be three times the production costs. Consequently, the company will realize significant profits that will facilitate company growth and investor satisfaction.
Value Proposition Canvas
Benefits
Resco company has new initiatives that support the smartwatch sector. The company has an innovative initiative that facilitates the tracking of indoor activity. SIMMS Labs can gain crucial data on body location, activity, and function to develop features that create value for the consumer. Also, Resco company has the Resco inspection initiative, a mobile solution that facilitates data collection and streamlines workflow. SIMMS Labs can benefit from the feature mentioned earlier that is easy to integrate, implement, and customize. Consequently, SIMMS Labs create value for customers by enabling them to access digital features and data at any time. Resco’s voice control feature can be implemented in the SIMMS smartwatch to enable users to use the device without touching the display screen, hence creating value. Therefore, Resco offers digital features that prove useful and practical to customers in scenarios where smartphones and tablets are inconvenient.
Features
SIMMS Labs can develop a smartwatch that hosts unique features that provide value to the diverse needs of the customers. A SIMMS smartwatch should have a desirable outlook that matches the different tastes and preferences of consumers. Also, the software programs inherent in the smartwatch should be diverse to exceed customer expectations. The features could include; a calling feature with data plan management, a heart monitor feature for consumers with heart conditions, and a customizable AI feature unique to its user. A smartwatch creates value for a customer when it has inherent features that are useful in the satisfaction of the diverse needs of its user.
Products
The SIMMS smartwatch is a wearable technology that utilizes contemporary smartphone features and is worn on the wrist. Contemporary technophiles utilize the smartwatch for various functions. The product serves as a powerful competitor of digital smartphones and tablets because they are convenient in areas where the latter products are not. Also, the SIMMS smartwatch incorporates the latest features into its operating system and is affordable; therefore, it creates significant value for its consumer.
Experience
The SIMMS smartwatch should do what other devices cannot, providing a unique experience to smartwatch users. Furthermore, the company can offer a proactive experience for the customer. SIMMS Labs can offer smartwatches that can predict user needs by integrating artificial intelligence in apps. Consequently, the apps can update themselves according to the user’s current needs, making the smartwatch reliable and convenient. SIMMS Labs is unique in its approach to introducing new product features in the market. The company focuses on customer experience and then works backward to develop the appropriate functionalities and features.
Ideal customer
The SIMMS smartwatch can be utilized by any user familiar with advanced technology on a broad scale. Also, any user of contemporary smartphones can appreciate the SIMMS smartwatch. However, by considering the unique features of the smartwatch and its slightly high price, the ideal customer of the SIMMS smartwatch is well equipped with technical knowledge and is a medium or high-income earner. The ideal customer can also be determined in terms of the special models of the SIMMS smartwatch. For instance, a medical patient is an ideal customer for the SIMMS smartwatch with special medical features inherent in its software. Therefore, the ideal customer is dependent on the various features of the smartwatch.
Wants
Generally, consumers have diverse wants that they aspire to address. From product design to smartwatch capabilities, the wants of customers are numerous. SIMMS Labs can utilize authentic materials such as stainless steel, quality leather, glass, and aluminum, colored according to the consumers’ taste. Also, the company can integrate smartphone features into the smartwatch operating system. SIMMS Labs can utilize alert and notification features, apps, and calling capabilities. Consequently, the company will create value for the customers through the satisfaction of wants. Therefore, market research is crucial for determining and predicting customers’ wants to develop smartwatch features that address those wants.
Needs
Moreover, the needs of customers are diverse and insatiable. The SIMMS smartwatch does not simply aim to satisfy the wants of its user; it also aims to meet the customers’ real needs. The product aims to solve critical problems that consumers face. For instance, the smartwatch has an inherent medical feature, the heart monitor, which helps a user with heart disease track his heart’s activities. Therefore, the SIMMS smartwatch should satisfy the latent needs of its user, hence ascertaining value.
Substitutes
Furthermore, various substitute products can be used alternatively to the SIMMS smartwatch. There are many competitors of SIMMS Labs who also offer innovative smartwatches in the market. Competing firms such as Apple and Huawei offer diverse smartwatch products in their outlook and software features. The companies mentioned above integrate long battery lifespans, and advanced voice control features convenient for consumers. Additionally, tech giants like Samsung have developed a contemporary smartwatch that utilizes traditional wrist-watch designs, attracting many customers. Therefore, the SIMMS smartwatch has numerous competing products that consumers can prefer. Thus, SIMMS Labs should develop innovative products that reduce the threat of substitute products.
Fears
The SIMMS Labs is susceptible to various risks. First, the SIMMS smartwatch has outstanding competitors who can dominate a larger market share. Also, the use of indirect distribution channels is a risky approach. It is risky because large distributors serve competing firms, hence increasing the severity of competition. Also, due to the dynamic nature of technology, the SIMM smartwatch can become obsolete; its inherent features are not updated. Therefore, there are significant fears the company should strive to address and neutralize.
Conclusion
Therefore, it is clear that SIMMS Labs needs to adopt a new business model to experience significant growth in its operation. SIMMS Labs can; venture into a strategic partnership with Resco company, integrate efficient vital activities, and align company objectives with the value proposition. Also, the company should utilize proper distribution channels, employ the relevant resources, and minimize costs to set the optimum product price to enjoy market growth and profit. Therefore, the company stands to benefit from implementing a new business model.
Reference
Pavol Luptak. (2020). Smartwatches in the enterprise: Everything you need to know about this evolving market. Web.