Business Model Analysis of Afterpay Touch Group Ltd

This report analyzes the business model canvas of Afterpay Touch Group Ltd and recommends changes to enhance its competitive advantage. It offers an insight into enhancing consumer relationship marketing that enhances business productivity.

Running head: BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
Business Model Analysis of Afterpay Touch Group Ltd
Name of the University:
Name of the Student:
Authors Note:

1BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
Executive Summary
After pay Touch Group Ltd offers a unique service and the business was found to address
consumers’ best interest when it comes to make certain retail purchases. From analyzing the
canvas, it is evidenced that the focus of its after pay’s major business is on provision of retail and
financial services to the upper and middle income groups. After attempts to offer better
consumer relationships through its value propositions such as quality services and additional
payment benefits after completing a purchase all over Australia. Certain changes must also be
considered regarding merging the visa with other cards together for enhancing the organization’s
financial services along with enhancing efficiency of customers that visit the store and purchase
from its store.

2BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
Table of Contents
1. Introduction and Business Description............................................................................3
2. Business Model Canvas...................................................................................................3
9 building blocks..............................................................................................................3
3. Interrelationships among Nine Building Blocks..............................................................7
4. Analysis of Critical Success Factors................................................................................8
5. Aspects Resulting in Downside Risks.............................................................................9
6. Estimated Changes in Business Model..........................................................................10
7. Conclusion.....................................................................................................................10
References..........................................................................................................................11
Appendix............................................................................................................................13
Business Canvas Model.................................................................................................13

3BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
1. Introduction and Business Description
Effective business planning facilitates companies in proper implementation of the
business conducts. Taking into account such scenario, business models proficiently shapes the
management and marketing (Antikainen, Aminoff, Paloheimo & Kettunen, 2017). The report is
focused on offering an insight to enhance the consumer relationship marketing that enhances the
business productivity. In addition, the assignment also offers certain advantages that can be
attained through consideration of the business idea.
After pay Touch Group Ltd offers a unique service and the business was found to address
consumers best interest when it comes to make certain retail purchases (Cheng & Yu, 2015).
After pay offers an exceptional service of “buy now, pay later” that can facilitate consumers to
complete purchases at identical prices and for them over four equal fortnightly installments are to
be paid. After pay business has been developed to support Australian’s budget without needing
to enter into a credit product or traditional loan.
2. Business Model Canvas
The business canvas model forms an integral part of the organization and tends to help a
business in understanding the different strengths as well as the weaknesses of the enterprise.
9 building blocks
The business canvas model comprises of nine different building blocks whereby each of
them help in the analysis of a different component of the business model. The different blocks
will be elaborated on as follows:
Key Partners

4BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
The key partners in a business can be described as those corporations which go a long
way in assisting the enterprise to become successful in the long run of the business. Hence, the
key partners of the company Afterpay are the ones which assist it in the retail dealings which it is
required to incur in order to ensure that the enterprise is successful and that the operations run
smoothly. For After pay the key partners of the business are as follows:
 Westfield
 Touch Corporation
These two organizations help the After Pay Company to deal with after pay delivery
payment methods. The companies help After Pay in dividing the risk between the different
parties.
Key activities
The key activities of the company are the primary operations of the organization which
assist the business organization to produce and provide service offerings for the different
customers. They different activities for After Pay are:
1. Creation of user accounts and online payment methods
The company helps the different users to create their accounts with After Pay which will
then assist them to help paying in installments (Mentink, 2014). Moreover, Afterpay also pays
the different retailers on behalf of the company which will then assist the customers to purchase
the items.
Customer Segments

5BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
The customer segments can be described as the target market of the firm. These are the
customers which the company aims to target and aims to ensure that the organization is
successfully able to carry out its operations. The customer segment which the organization caters
to has been given as follows:
Online shoppers: The majority of the customers of the firm include the online shoppers who like
to shop from the different e-commerce websites.
Working professionals: The working professionals who do not get time to engage in different
activities will be the primary customer segments.
Value proposition
The value propositions aspect in the business model can be described as the manner in
which the offerings of the organization are unique for the enterprise. The value which the
organization creates for the customers is essentially described in the given aspect. The value
proposition which the company aims to offer to the customers are as follows:
Easy purchases: The customers who have been running on a strict budget will be able to incur
easy purchases and can make the payments later.
Review of services: The Company helps the customers to review the services being purchased.
Constantly updated websites: Lastly the organization continuously upgrades the websites so as to
ensure easy usage (Mentink, 2014).
Customer Relationships

6BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
The customer relationships form a crucial part of the organization and any company who
aims to ensure that the company is successful in the long run will be required to see to it that the
company has strong relationships with the different customers. The company takes in the
following activities to maintain strong relationships
Website Chat support: The Company uses website chat support in order to ensure that customer
relationships are maintained.
Direct marketing: The Company also engages in direct marketing activities.
Social media marketing: The Company also engages in social media platforms to maintain
sound relationships with the different consumers.
Cost structure
The cost structure of the organization can be described as the costs incurred to run the
various aspects of the business canvas model.
The different costs as incurred by the business are as follows:
 Application and website development prices are a major portion of the costs incurred by
the organization (Cheng & Yu, 2015). It goes a long way in assisting the company to
ensure that the operations run smoothly.
 The human resource costs also add up to an essential aspect of the organization as it goes
a long way in assisting the individual to ensure that they achieve success in the long run.
 Advertisement- The advertisement costs also add up to the costs of the organization
Channels

7BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
The channels can be essentially described as the medium of exchange between the
customers and the company. The company makes use of the following channels:
Advertising by means of direct and marketing channels.
The company tends to make use of both the direct marketing techniques as well as the
physical marketing techniques to make the service poplar.
Key Resources
The key resources of the firm can be described as the resources the firm makes use of to
carry out its operations. The key resources of After Pay are as follows:
 The 180 staff members are the primary assets of the organization which tend to assist it in
achieving success in the long run (Lüdeke-Freund & Dembek, 2017).
 Moreover, the website also forms an essential resource for the company.
Revenue stream
The revenue stream can be described as the sources of the revenues for the firm:
 As per the annual report, 80% of the revenues come from the commission as paid by the
retailers by facilitating their sales
 20% of the revenues comes from the late payment fees as made customers when they fail
to make payments
3. Interrelationships among Nine Building Blocks
Pay Company indicates the business performance by means of nine interrelated blocks
explained within the business model (Díaz-Díaz, Muñoz & Pérez-González, 2017). From

8BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
analyzing the canvas, it is evidenced that the focus of its after pay’s major business is on
provision of retail and financial services to the upper and middle income groups. After attempts
to offer better consumer relationships through its value propositions such as quality services and
additional payment benefits after completing a purchase all over Australia. Afterpay offers
exceptional services of “buy now, pay later” that can facilitate consumers to complete purchases
at identical prices and for them over four equal fortnightly installments are to be paid.
Afterpay Company employs all its major business partners along with activities for
enhancing the business profitability and for being cost effective. The cost structures and channels
of Afterpay are observed to be linked together for obtaining increased revenues from wide
consumer segment. Afterpay makes sure that its hardship policy offers consumers with benefits
those are unable to make their repayments in order to apply for extended terms of payments
devoid of interests and penalties. The business model of Afterpay encourages responsible
consumer behavior. In such scenario, in case the consumers have payments overdue the system
will restrict them to make another purchase till their accounts are clear of dues.
4. Analysis of Critical Success Factors
The business has attained numerous critical success factors that have facilitated Afterpay
Touch Group Ltd to attain better competitive advantages (Dohrmann, Raith & Siebold, 2015).
The service features that acts as critical success factors are explained under:
 Afterpay service does not require extra charges as long as consumers are focused about
making payments in alignment with their schedule of payment.
 Average orders employing Afterpay are approximately $150 that is aimed at offering
consumers a tool for budgeting for spreading all its payments with time (Kajanus, Iire,

9BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
Eskelinen, Heinonen & Hansen, 2014). Moreover, unlike attain specific financial
businesses, Afterpay is focused and attains advantages from consumers those are not
going within default (Lüdeke-Freund & Dembek, 2017).
 Afterpay service ensures that before all the orders being approved, it employs its
proprietary fraud along with checking of repayment ability. Communication with the
consumers are maintained on a regular basis through email and SMS “in advancements”
of payments that remain due.
5. Aspects Resulting in Downside Risks
After Company has focused its attention in decreasing some type of risks that arises in
operating its business all across its business locations (Lüdeke-Freund et al., 2017). Risk is
observed to be diverse along with the manner in which it might add vulnerability to its situation
within the market. Certain strategic aspects which result in downside risks for After pay is
necessary to be monitored for eliminating the environmental pressures as well as promoting
social responsibility.
Downside risks are also observed to be present in case of Afterpay Company that
includes operational factors (Matusiak, 2016). This might result in certain uncertainties that are
associated with the events and are not confined to the failures in meeting people product based
safety standards. Not dealing with such factors efficiently can lead to cause industry disputes,
interruptions in supply chain or technology collapse (Maurya, 2017).

10BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
6. Estimated Changes in Business Model
From analyzing the business model canvas of Afterpay it has been recommendations can
be offered to the organization that can facilitate it in attaining certain competitive advantages.
Relied on these aspects of the company’s business model canvas it can also be stated that
changes must be implemented focused on low priced strategy and growth strategy (Mentink,
2014). For the customers to believe that the organization provides services of exceptional
quality, price might be a bit increased than usual. This can also focus on offering a value-added
service in consideration with the input expenses (Rayna & Striukova, 2016). Changes can also be
considered in the regarding the safety strategy, financial services along with stop shops. Certain
changes must also be considered regarding merging the visa with other cards together for
enhancing the organization’s financial services along with enhancing efficiency of customers
that visit the store and purchase from its store (Türko, 2016).
7. Conclusion
The report was focused on offering an insight to enhance the consumer relationship
marketing that enhances the business productivity. It was gathered after completion of the report
that Afterpay Touch Group Ltd offers a unique service and the business was found to address
consumer’s best interest when it comes to make certain retail purchases. Afterpay is focused and
attains advantages from consumers those are not going within default. This can also focus on
offering a value-added service in consideration with the input expenses.

11BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
References
Antikainen, M., Aminoff, A., Paloheimo, H., & Kettunen, O. (2017, March). Designing circular
business model experimentation-Case study. In The Proceedings of The 2017 ISPIM
Forum, Toronto, Canada (pp. 19-22).
Cheng, G., & Yu, C. (2015). E-commerce Model Canvas in 3D Virtual Space: An Application in
British Museum. In LISS 2013(pp. 17-28). Springer, Berlin, Heidelberg.
Díaz-Díaz, R., Muñoz, L., & Pérez-González, D. (2017). Business model analysis of public
services operating in the smart city ecosystem: The case of SmartSantander. Future
Generation Computer Systems, 76, 198-214.
Dohrmann, S., Raith, M., & Siebold, N. (2015). Monetizing social value creation–A business
model approach. Entrepreneurship Research Journal, 5(2), 127-154.
Kajanus, M., Iire, A., Eskelinen, T., Heinonen, M., & Hansen, E. (2014). Business model design:
new tools for business systems innovation. Scandinavian Journal of Forest
Research, 29(6), 603-614.
Lüdeke-Freund, F., & Dembek, K. (2017). Research and practice on sustainable business
models: Emerging field or passing fancy. Journal of Cleaner Producfion.
Lüdeke-Freund, F., Freudenreich, B., Schaltegger, S., Saviuc, I., & Stock, M. (2017).
Sustainability-Oriented Business Model Assessment—A Conceptual Foundation.
In Analytics, Innovation, and Excellence-Driven Enterprise Sustainability(pp. 169-206).
Palgrave Macmillan, New York.

12BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
Matusiak, B. E. (2016). Local balancing system from the business model canvas perspective.
In E3S Web of Conferences (Vol. 10, p. 00055). EDP Sciences.
Maurya, A. (2017). Why Lean Canvas vs Business Model Canvas? LeanStack. 2017.
Mentink, B. (2014). Circular business model innovation: a process framework and a tool for
business model innovation in a circular economy.
Rayna, T., & Striukova, L. (2016). 360° Business Model Innovation: Toward an Integrated View
of Business Model Innovation: An integrated, value-based view of a business model can
provide insight into potential areas for business model innovation. Research-Technology
Management, 59(3), 21-28.
Türko, E. S. (2016). Business Plan Vs Business Model Canvas in Entrepreneurship Trainings: A
Comparison of Students’ Perceptions. Asian Social Science, 12(10), 55.

13BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
Appendix
Business Canvas Model
Key Partners
 Westfield
and
Touchcorp
for afterpay
delivery
payment
method
Key
Resources
 180
skilled
and
effectiv
e IT
staff
and
employ
ees
 User
friendl
y
website
based
portfoli
o of
numero
us
Value Proposition
 Ensuring
review of
services
before
purchasing
 Constantly
updated
websites that
is simply
used
Consumer
Relationship
 Through
website,
social
media an
direct
marketing
Consumer
Segments
 Has
attaine
d an
increa
sing
consu
mer
base
with
maxi
mum
consu
mers
involv
ed in
online
shoppi
ng.

14BUSINESS MODEL ANALYSIS OF AFTERPAY TOUCH GROUP LTD
payme
nt
service
s
Key Activities
 Creation of user accounts and online payment
methods
Channels
 Advertising by means of
direct marketing and
mobile applications
Cost Structure
 Premium method of pricing
 Application development
 Cost of advertising
 Cost of partnerships
 Fraud payments received.
Revenue Streams
 80% is from the
commission received from
retailers
 20% is from the late fees
charged from the
customers.