Critical Evaluation Of Digi Business Model Canvas

Question

Task: The objective of this individual assessment submission is to learn how to develop your own business idea, complemented by research and observational insights that detail why the need is compelling. Please submit a 1500-word business report of your idea, a detailed business model (BM) canvas, discussion of the interrelationships among the BM components that are essential to success, critical risks and assumptions, and overall feasibility. The business model canvas must be discussed in the report and included as an appendix.

Answer

Introduction
This report focuses on deconstructing Digi business model along with a new business idea of online buying and selling platform of old products. This innovation will be beneficial for the consumers to sell or purchase old and used products like mobile phones, household equipments, clothes, jewels, furniture, automobile and other equipments in good condition. Along with this, e-database and platform would help the customers to buy the products at affordable prices. The objective of this innovative business idea is to fulfill the requirements of consumer and traders for the products at one place. Digi.com is the name that would be decided for this new business venture. With the help of this innovative platform, the company would be able to target domestic as well as international customers.

Discussion
Problem statement
It is observed that people face lots of issues for selling their old products and equipments as they are not able to get good prices for those used products. Generally, they are also not able to find the customers who want to buy used and second hand products in the market. Along with this, people are also facing issues in purchasing new products due to high prices (Lake, 2020). So, people are looking for old products in good condition so that their needs and requirements can be fulfilled. Further, condition and quality of second hand products are also one of the big problems for buyers. Thus, digital innovation is required to help buyers and sellers so that they can buy or sell their second hand products at the reasonable prices (Zhu & Gao, 2019).

Benefits
In case of benefits, both buyers and sellers would get several benefits from this e-database and digital platform. Along with this, the idea of providing an e-database would also be beneficial for business also.

Competitive advantage- This is one of the key benefits for the company while operating the business. The company would get competitive advantage as there is very limited competition for e-database service in the market. Along with this, there are few websites which are providing this innovative service to the consumers (Demirkan, 2015).

Profitable business- Second benefit for the company is profit in future. This digital platform would be profitable for the company as this platform would act as cost and time saver for buyers and sellers. By expanding the market of this e-database for used products, focus of the company would be on earning maximum profit in future.

Digi business model
In order to gain success in this innovative venture, it is essential to prepare and implement an effective Digi business model. This would keep a track of day-to-day business operations and activities. Along with this, the Digi business model would provide proper understanding of services and strategies to reduce expenditure and generate more revenue in the business. The blocks of Digi business model for e-database are discussed below:

Key activities- In case of business activities, the company would operate its business with various second-hand products to achieve the desirable position in the market. Key activities of the business would include marketing, selling and support after sales. E-database would have the list of used of products in different categories for convenience of buyers and sellers. Other activities would include inventory control, customer satisfaction, and managing distribution channel (Gavrrilova, 2014).

Key partners- For this business, key partners would be both buyers and sellers. The invitations would be sending to them to register on the data so that potential customers can be identified easily. Further, designers and suppliers would also be key partners of the business.

Value proposition- For adding more value in the business, free registration facility on database would be provided to the potential customers. Along with this, the database would be designed in such a way that customers can access and operate it easily which buying or selling products.

Key resources- This block of Digi business model illustrates that in order to operate the business successfully, key resource would be website maintainer and software development. Further, brand value would also be an important resource to target potential customers effectively.

Customer relationships- The Company is required to maintain a string relationship with the customer to get desired success in the market. In this manner, the company would use its website and other media channels to provide important and accurate information to its customers (Mason, 2015).

Key channels- This block of Digi business model mentions that for targeting potential customers, there are some effective channels that would be used by the company. The relevant information would be provided through different media channels so that customers can be attracted in global markets. For this, some media channels like official website, social media platforms, TV and print media will be helpful.

Customer segments- For this e-database, the segmentation of customers would be done on geographic and demographic basis. In geographic segmentation, the customers of metro cities, urban and suburban areas would be targeted. Further, low-income group who want to buy second-hand products and average income group who want to buy products in good quality.

Cost structure- In this Digi business model, there is a variety of functions for which the cost is required. Salary of designer and employees and marketing of e-database would include operating cost. Along with this, there are some other costs in business like maintenance cost, domain and promotional cost (Dudin, 2015).

Revenue- For gaining profit in business, the company would focus on various medium to generate revenue. By providing the platform for selling and buying products, the company would take commission from the service providers to generate its revenue.

What is the interrelationship between the blocks of Digi business model?
The interrelationship of Digi business model is discussed below:

Marketing and finance- Proper financing is required for marketing and promotional activities of e-database. On the other hand, marketing enhances sales and consumer awareness that leads revenue generation in effective manner (Ramanujam &Tacke, 2016).

Finance and operations- Funding is important to operate the business activities effectively. Budget allocation is helpful for the business to manage the business operations with the decided amount.

Finance and employees- Finance department is responsible for providing salaries and other bonuses to the employees. They are important to operate the business so that more revenue can be generated.

Operations and employees- each employee has different knowledge and skills to manage the business operations. Employees are accountable to achieve set goals and objectives of business operations.

Success factors
In case of new business, there is some success factors on which the company should focus. The company needs to understand these factors so that competitive advantage can be achieved in the market. Some of critical success factors considering the Digi business model are discussed below:

Customer retention- This is one of the vital success aspect for the business. It is essential for the company to retain its potential customers by offers effective customer services such as product differentiation, free registration and support after sales. This would be helpful for the company to generate more profit (Makanyeza, 2015).

Marketing- In order to target potential customers, marketing of e-database through various channels would be beneficial for the company. Promotional tools and channels like social media, print advertisements and television would be helpful to spread awareness among buyers and sellers effectively.

Branding- For attracting large customer base, branding of e-database would be helpful for the company. Internet, advertisement campaigns, social media channels, and attending feedbacks are some ways by which the company can enhance its brand value (Kim and Min, 2015).

Risks and assumptions
In case of starting a new business, there might be some risks that could be faced by the company. It is important for the company is to conduct proper market research and focus on effective promotion of e-database to make the customers familiar about this. Some of the assumed risks based on the Digi business model in this new business are as follows:

• There can be the risk of capital insufficiency in the business and this could be the reason of inefficiency in meeting the needs of customers. Insufficient capital would also impact on business activities and revenue generation in negative manner.
• Further, threat of competition can also be a risk factor. There are lots of existing players and brands in retail sector and they are trying to gain market share by technological innovations and customer retention (Ingram, 2020).

Feasibility analysis
Based on feasibility test, the need of this e-database and platform in the market would be analyzed. Along with this, the response of customers on this business would also be recorded. It is observed that people are interested in buying and selling used products at affordable prices. The reason is that new household and electronic products are costly and those are not affordable for the customers with low-income groups. So, the market has high potential for the business.

The feasibility in-terms of customers would be analyzed by focusing on purchasing power of customers, making the customers attentive about this new business and growth potential of target market. Customers and target market also have high potential in this business. Further, found related and industry related issues have moderate potential in the business. Overall, this business idea has high potential to operate.

Conclusion
People are facing difficulties in buying and selling used products. So, this new venture of developing e-database would provide an innovative platform to consumers who want to purchase and sell used products at reasonable prices. The report provides Digi business model to operate various business activities in effective manner. Further, interrelationships in Digi business model, key success factors, risk and assumptions in business are also discussed in the report.

References
Demirkan, H. (2015). Special Section: Enhancing E-Commerce Outcomes with IT Service Innovations. International Journal Of Electronic Commerce. 19(3). 2-6.

Dudin, M. N. (2015). The Innovative Business Model Canvas in the System of Effective Budgeting: Asian Social Science. 11 (7). 290-296.

Gavrrilova, T. (2014). Modern Notation of Business Models: Visual Trend: Foresight-Russia. 8 (2). 56–7

 Ingram, D. (2020). Challenges Faced in Selling Consumer Products. Retrieved from https://smallbusiness.chron.com/challenges-faced-selling-consumer-products-73572.html

Kim, S. and Min, S. (2015). Business Model Innovation Performance: When does Adding a New Business Model Benefit an Incumbent. Digi business model Strategic Entrepreneurship Journal. 9(1). pp.34-57.

Lake, L. (2020). Reasons Why Customers Are Not Buying From You. Retrieved from https://www.thebalancesmb.com/top-5-reasons-customers-aren-t-buying-from-you-2295720

Makanyeza, C. (2015). Consumer Awareness, Ethnocentrism and Loyalty: An Integrative Model. Journal of International Consumer Marketing. 27(2). pp.167-183.

Mason, H. (2015). Trend-Driven Innovation: Beat Accelerating Customer Expectations. John Wiley & Sons.

Ramanujam, M., &Tacke, G. (2016). Monetizing innovation: how smart companies design the product around the price. John Wiley & Sons.

Zhu, G., & Gao, X. (2019). Precision retail marketing strategy based on digital marketing model. Science Journal of Business and Management, 7(1), 33-37.

Appendix 1
Digi Business Model Canvas

Appendix 2