Exploring The Airwallex Business Model Canvas

Question

Task: To be completed individually, you are required to prepare a business report that deconstructs an organisation's business model and identifies the critical success factors that make the business sustainable. Your analysis will demonstrate your critical thinking skills and your ability to professionally articulate your findings.
Before commencing, you must seek your lecturer's approval to undertake an analysis of the business you have chosen. The type of organisation that should be identified for study is one that is relatively new, innovative in how they operate, and have most likely been established in the last five years.

Answer

Executive Summary
The present report is focused on developing the Airwallex business model and discussing the nine building blocks of the model in a detailed manner. Airwallex Pty is a platform for convenient online payment and currency exchange using advance technology that saves users’ time and money. They have a well-structured financial model canvas that is committed to assist the business personas and their target consumers. Since starting from 2015, this organization manages to be crown as global fintech leader and creates its extensive influence in Australia and avail their service for 23 countries by applying the nine fundamental components of Osterwalder and Pigneur’s Business Model Canvas.

Airwallex can still reform its business strategy for a higher approach amongst contemporary entrants. Those recommended features based on the Airwallex business model that can help grow their business rapidly are-

• AP can approach a frequent endorsement of their service to reach potential customers more easily
• It should develop instant customer service assistance for users’ better experience
• Should get regular updates of the fast-changing market demand
• Should open their local branch in some business centred countries like India, UAE and other middle-east countries.

1. Introduction
Jack Zhang initially owned a cafeteria has established Airewellx Pty Ltd in Australia. AP’s headquarter is situated in Hong Kong in 2015 and later extended its international office over eight countries. It provides a seamless banking experience to exporters and importers throughout a more extensive network and ensures the accuracy of transactions and privacy. It claims to be a global digital solution for small to medium business organizations. A reliable media has reported that AP has recently integrated with Xero to enable a better customer service for the SMBs (small to medium business). This global e-commerce payment solution organization specializes in working with SMB firms. They’ve occupied a leading position in Australia since they were the first organization to take such initiative. For ensuring their users’ security, they provide secure socket layer encryption. They host local payment options in their affiliated region. 

2. Osterwalder & Pigneur’s Canvas: Airwallex business model
a) Customer Segments:
This block of Airwallex business model signifies that the company’s unique initiative of assisting SMBs in digital transactions creates a significant impact on the startup investors, exporters and importers. Their recent launching of Xero amplifies an extensive network amongst the e-commerce retailers (Narendra & Aghila, 2020).

b) Value Propositions:

1. The Airwallex business model examines that the company brings digital transaction solution for small to medium business associates and the exporters and importers in support of quick and smooth money exchange
2. This innovative online e-commerce retailing helps to save time and money at the same time as it charges less on per transaction comparatively.
3. They offer 50 different countries’ currency exchange at a time so that the merchants don’t face labyrinth while dealing internationally
4. AP is provide remittance service globally so it’s easy for the dealers to exchange fund across the world
5. Users can also save their fund securely in personal AP wallet
6. AP has kept their application convenient and user-friendly in favour of their users so that they don’t face issues while using it
7. AP is concern about their user’s security, thus they have encrypted RSA key and 2 phase authentication verification to make it a secure online transactions platform (Mimouni, 2017).

c) Channels:
Herein Airwallex business model, it is mentioned that AP has recently associated with Xero to help growing SMBs (small to medium business). Not only transactions, they start consultation for their users to assist them enlarging their international exports and imports. Within 5 years, AP has expanded branches all over the globe with efficient staff support (Yun & Zhao, 2020).

d) Customer Relationships:
AP values their consumer’s needs thence they solve their customer query promptly. They helm constant and reliable individual customer assistance. Since it direct deals with liquid money they’re enterprising team ensure security against any money laundering and fraudulence (Hoverstadt, et al., 2017).

e) Revenue Streams
In March 2019, AP has risen to $US100 million turn over and became Australian third-ever unicorn. They are planning to implement a project of 500% revenue growth.

f) Resources:
According to the research conducted to prepare this Airwallex business model, AP has a strong financial structure with advance technology and reliable key features. AP believes in manpower thus it has proficient team to wield its impression.

g) Activities
Involving in direct dealing with finance and global currency, they ensure the security of each transaction and remittances by encrypting RSA key and Secure Socket Layer.

• With AP’s two-factor authentication- user id and password, next code generated physically by the user, can be accessed into it for their remittance. AP also executes recovery mode in case any user forgets his ID or password. Also beside instant merchandise, users can store their fund accordingly in their personal AP wallet.

h) Partnerships:
Signing up with their website and connecting with users’ local banking area is the primary key to access this transactions method. 

• The company used to build this Airwallex business model have associated with many giant techs such as Tencent, DST Global, BCA, Gobi China, SqaurePeg Capital, and Sequoia etc.
• It has expanded its branches across eight-plus territories such as the UK, US, Australia, Canada, Hong Kong etc.

i) Costs:

• Being a start-up organization AP has obtained the second-largest Australian fundraiser in 2018 with total turnover of $US80 million. Recently they have added to more backers in Hillhouse Capital and Kong-based Horizon Ventures and in Indonesia’s Central Capital Ventura as well that have raised their total fundraising up to $138 million.

3. What is the interrelationship between the building blocks of Airwallex business model?
Airwallex Pty Ltd was founded in Australia in 2015. Later, it set up headquarter in Hong Kong. Soon, for rapidly increasing demands amongst the SMB’s within five years they have launched new branches across eight countries and have been associated with 23 plus countries like India, UK, USA, Pakistan, China, Bangladesh, Indonesia etc. Hence, in 2018 it manages to achieve an Australian unicorn reward for their fantastic turnover as illustrated in this block of Airwallex business model.

4. Factors Behind Critical Success

AP has achieved rapid success through following the Airwallex business model canvas. Their strategic management model creates well-formed buyer-provider relationships to emphasize the fundamental core of their business. Since AP deals with money, there’s always the risk of money laundering and fraudulence. To reduce the risk factor and to gain customers’ trust, AP emphasizes on making the partnership with giant platforms like BCA, Gobi China, DST Global, and Tencent. 

AP’s variety in launching different products accordingly with customers’ requirement helps to sustain their value compare to contemporary competitors. They start to offer 50 countries currency exchange at a time. 

To ensure proper service, they have a super-efficient team for constant support. It ensures individual assistance for their target based and regular customers. Besides making every possible of consumer support, they have made a simple application so that users can access and operate it easily. To view from customers’ perspective, AP manages to arrange a communication program between client and service providers so that through direct interaction, they can establish individual perspectives and opinion on further progression.

AP has maintained professional ethics of integrity while generating their revenue stream. They have researched trending market price along with their cost structure of endorsing, advertising, licensing, brokerage fees, lending subscription fees and asset sales. They follow the characteristics of cost structures illustrated by Osterwalder and Pigneur in the Airwallex business model. They create segments of changing and unchanged finance chart. Fixed cost is applicable in salaries, allowances and rents and the changing cost depend upon their product and its estimated growth.

AP has applied reasonable fees in different segments of products in an order with multiple customers’ needs, such as they charge only 3 to 4 percent while changing currencies.

5. Factors Behind Successful Airwallex business model

Dealing with raw money transaction often tends to go through a rollercoaster ride of downside risk because of its globally changing rate. Low rates in exportation often push the business into a downfall. 

AP’s strategic business behaviour as obtained from the Airwallex business model leads its business to tremendous within a concise period. Still, it can be remunerated through some subtle components. Customer compliance should have emerged more efficiently. There should be more options for language selection because most of the small town business holders have their native target based audience, and generally every individual fell comfortable using native language. Installation of the mobile app would be an advantage for both the clients and the organization.

6. Conclusion
The though behind AP’s establishment is the outcome of innovative ideology in support of social welfare. The effort AP’s team is continuously giving lead it to the top of its rapid success within a short time. For more customer satisfaction, the way AP has been coming up with new ideas is dictating their potential long term success. Yet, the method is not risk-free, especially as it is dealing with currency (Joyce & Paquin, 2016). 

7. Recommendations basis the Airwallex business model

• Since AP’s affiliation is increasing, it needs more human resources for engaging in constant customer services.
• Dealers or the buyer personas often prefer using their native language in order to maintain convenient merchandise, thus AP must add native language options.
• AP always proves itself trustworthy to its users still it’s expected to continue with the integrity to the cost structure with no particular order.
• It is never risk free while dealing with raw money so further strict customer authentication process will help users to rely on AP’s work efficiency more.
• Sooner or later, AP must increase number of countries’ currency they offer to exchange.

8. bibliography
Airwallex. (2020, 04 12). Retrieved from https://www.airwallex.com/

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Hoverstadt, P., Loh, L., Ackoff, R., Allan, N., Beer, L., Bateson, G., et al. (2017). Customer Intimacy and Other Value Disciplines. In P. Hoverstadt, L. Loh, R. Ackoff, N. Allan, L. Beer, G. Bateson, et al., Patterns of Strategy (Vol. 1, pp. xv-xix). Lanchester Press Chicago.

Joyce, A., & Paquin, R. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Airwallex business model Journal of cleaner production, 135, 1474-1486.

Mimouni, K. (2017). Currency risk and microcredit interest rates. Emerging Markets Review, 31, 80-95.

Narendra, K., & Aghila, G. (2020). Securing Online Bank's Big Data Through Block Chain Technology: Cross-Border Transactions Security and Tracking. In K. Narendra, & G. Aghila, Security, Privacy, and Forensics Issues in Big Data (pp. 247-263). IGI Global.

Osterwalder, A., Pigneur, Y., Smith, A., & Etiemble, F. (2020). The Invincible Company: Business Model Strategies From the World's Best Products, Services, and Organizations. John Wiley & Sons.

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