Slack Technology Business Model Analysis

This assignment analyzes the business model of Slack technology, focusing on how it leverages customer customization within its nine-block framework. It examines both positive and negative aspects of their current strategy and offers recommendations for improvement, aiming to increase their competitiveness.

Running head: THINK BIG
Think big
Name of the student
Name of the university
Author note

1THINK BIG
Executive summary
The aim of this report is to discuss about the current business model of Slack technology. This
report identified the key relationships between the nine blocks of the business model canvas of
Slack technology. In addition, the positive and negative factors for the business model of Slack
technology are also being evaluated. In accordance to these factors, a few changes are being
discussed, which will help to enhance the effectiveness of the business model of them.

2THINK BIG
Table of Contents
Introduction......................................................................................................................................4
Company profile..........................................................................................................................4
Business model canvas of Slack technology...................................................................................5
Key partners.................................................................................................................................5
Key activities...............................................................................................................................5
Key resources...............................................................................................................................5
Value proposition.........................................................................................................................5
Customer segment.......................................................................................................................6
Customer relationship..................................................................................................................6
Channels......................................................................................................................................6
Cost structure...............................................................................................................................7
Revenue stream............................................................................................................................7
Key relationships between the building blocks...............................................................................7
Identification of the critical success factors.....................................................................................8
Evaluation of the downside risks.....................................................................................................9
Recommended changes...................................................................................................................9
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................12

3THINK BIG

4THINK BIG
Introduction
In the current business scenario, sustainability and innovations are the key factors that
being considered by the business organizations in order to gain competitive advantages in the
market. One of the major industries witnessing the rapid development in the innovation is the
software or technology industry (Volberda, Van Den Bosch & Heij, 2013). More new firms are
entering in this sector with their innovative approach and finding their place in the competition.
Slack technology is one of the leading innovating firms in the recent time. They along
with their innovative approach have made a niche in the software market (Parida & Ortqvist,
2015). This is report will discuss about the company background of Slack technology. This
report will also discuss about the business model flowed by them along with the key relationship
between them.
Company profile
Slack technology is based in Vancouver, Canada and it was founded in 2009. Currently,
they are having their presence in different cities around the world including San Francisco,
Dublin, New York, Toronto, Tokyo, London and Melbourne. They are having large number of
angel investors who are being attracted for their innovative business approaches and growth
potential (slack.com, 2018). Currently their major revenue generating source is the slack
platform used by millions of business organizations around the world.
They build online platforms, which helps in creating effective network and connectivity
among the internal stakeholders of the organizations and made them connected with the services
and resources. According to the reports, currently Slack technology is having 43 companies from
the fortune 100 list. In terms of their market presence, they cater to each and every region around

5THINK BIG
the world. In accordance to that, their corporate offices are strategically located in diverse
locations.
Business model canvas of Slack technology
Key partners
Google is he major critical partner for them due to the reason that partnership with
Google helped Slack technology to have the access to the G suite. Online payment providers are
also key partners for them due to the fact that they help in offering different payment options to
the customers.
Key activities
The major activities are the research and development for further improvement and
having effective customer service. Moreover, providing security patch updates to the customers
periodically is another major activity of them.
Key resources
Key resources include skilled human resources, favorable infrastructure and financial
resources for investment and development. Investors are also the key resources due to the fact
they are the main source of access to the capital.
Value proposition
Offering customized approach to the business solutions according to the different need of
the organizations. Current business organizations are having various complex tasks to perform.
Offering universal solutions for managing all the complex activities helps in creating value for

6THINK BIG
the business clients. In order to enable the small organizations to experience the benefits of
Slack, they are being offered free trial. This also helps in value creation for the small
organizations.
Customer segment
Customers segments for Slack technology include only the business clients. However,
they cater to different business clients ranging from small business to fortune 100 companies.
Thus, they are having diversified customer segments with having the needs for management
solutions. However, major business clients for them are from the IT industries such as LinkedIn
and eBay.
Customer relationship
Customers expect having 24*7 assistances to meet all their issues. In addition, they also
expect to have customized approach. In addition, services are accessible to the customers
through their smartphones. Dedicated customer service centre is present to assists the customers
in all their queries. Assistances are being provided through both voice and non-voice mediums.
Channels
Business customers are having the need of both online and offline mediums in order to
reach them. Mobile apps are available of Slack in different mobile marketplace, which can be
installed at free of cost. In addition, social media marketing is also used to reach out to maximum
number of customers along with having third party software integration.

7THINK BIG
Cost structure
Majority of the cost involves in the developing the slack platforms. This is due to the
reason that platforms are being continuously developed to match the business need.
The next cost involvement is in managing the human resources. Slack technology is having
employees with different skill sets and they are being given compensation accordingly. In
addition, maintenance of the servers and data centers is also a major cost involving aspect for
Slack Technology.
Revenue stream
Key revenue streams are coming from selling the slack platforms to the business
customers around the world and having annual subscriptions and maintenance fees. Majority of
the revenue comes from the selling of new software followed by the annual charges. According
to the reports, the first paid package cost $6.67/ month. Second package costs $12.5/ month with
having access to some additional tools.
Key relationships between the building blocks
 Proper identification and segmentation of the customers will help Slack technology in
having different products for different requirements. Thus, requirements of the customers
will be effectively met.
 Value proposition will help Slack technology to enhance the customer value and will
attract them more compared to their competitors.
 Customer channels should be diverse and varied for Slack technology in order to reach to
different customer segments.

8THINK BIG
 Positive customer relationship is important for them because it will help to generate
positive word of mouth in the market.
 The more positive will be the word of mouth, the more will be the brand value. Thus,
Slack technology will have more brand value will be able to enhance their revenue by
attracting more customers.
 Key resources should also be effectively determined in order to gauge them against the
business requirements.
 It is also important for them to determine the key activities in order to have right products
in right place and for the right customers.
 Partners should also be selected in such a way that it will have maximum value for them
as well as for the customers.
 The last step is the cost structure. Cost can be adjusted after all the above activities being
done. In accordance to that, the price should be finalized.
Identification of the critical success factors
There are some critical success factors being identified, which should be initiated in order
to gain competitive advantages. These factors are:
 Initiation of the cost leadership by outsourcing the research and development activities. It
will help in enhancing the profitability (Alias et al., 2014).
 Market presence should also be enhanced. Currently they are only having their offices in
major metro cities. Increase in the market presence will help to tap more customers in the
global market.

9THINK BIG
 Offering IPO in the stock market will help Slack technology to have more financial
resources, which they can invest in their key activities. This will also reduce the
dependability of them on the angel investors (Vanacker, Collewaert & Paeleman, 2013).
Evaluation of the downside risks
Apart from the potential critical success factors, there are some negative issues also being
faced by Slack technology, which is increasing their risks. These issues are:
 Offerings of lack technology are having high cost. This is limiting the number of
customers (Porter & Heppelmann, 2014). They should come up with affordable offerings
also in order to tap the lager section.
 Hacking and poaching in confidential information is emerging in the recent time. Slack is
vulnerable to all these. They should initiate more security measure update for their slack
platforms in order to ensure the emerging risks in the recent time (Ding & Keh, 2016).
 Slack technology should come up with software for other use. Currently they are not
having any other products, which are limiting their market opportunities. They should
have different software products for different usages (Park & Jang, 2013).
Recommended changes
According to me, the first change that should be implemented is in the marketing
department. Aggressive marketing should be initiated in order to enhance the brand exposure in
the market along with attracting more number of customers (Villamagna, Angermeier & Bennett,
2013).

10THINK BIG
Another change I will initiate is to diversify the value propositions by adding more
services in the technological sector. This will reduce the dependency from the single product line
and will cover more diverse customer segments.

11THINK BIG
Conclusion
Thus, it can be concluded that the existing business model of Slack technology is not
effective enough to gain competitive advantages in the current business scenario. It is important
for them to initiate newer strategies to enhance their competitiveness. In this report, it is
identified that offering customized services to the customers is the key relationship among the
nine blocks of the business model canvas of Slack technology. This report discussed some
positive and negative factors, which should be considered by Slack technology in order to
enhance their competitiveness. In addition, this report also suggested some changes as
recommendations, which will help them to reduce the ineffectiveness of the existing business
model of Slack technology.

12THINK BIG
Reference
Alias, Z., Zawawi, E. M. A., Yusof, K., & Aris, N. M. (2014). Determining critical success
factors of project management practice: A conceptual framework. Procedia-Social and
Behavioral Sciences, 153, 61-69.
Bertrand, O., & Mol, M. J. (2013). The antecedents and innovation effects of domestic and
offshore R&D outsourcing: The contingent impact of cognitive distance and absorptive
capacity. Strategic Management Journal, 34(6), 751-760.
Bocken, N., Short, S., Rana, P., & Evans, S. (2013). A value mapping tool for sustainable
business modelling. Corporate Governance, 13(5), 482-497.
Ding, Y., & Keh, H. T. (2016). A re-examination of service standardization versus customization
from the consumer’s perspective. Journal of Services Marketing, 30(1), 16-28.
Parida, V., & Örtqvist, D. (2015). Interactive effects of network capability, ICT capability, and
financial slack on technology‐based small firm innovation performance. Journal of Small
Business Management, 53(S1), 278-298.
Park, K., & Jang, S. S. (2013). Capital structure, free cash flow, diversification and firm
performance: A holistic analysis. International Journal of Hospitality Management, 33,
51-63.
Payne, A., & Frow, P. (2014). Deconstructing the value proposition of an innovation
exemplar. European Journal of Marketing, 48(1/2), 237-270.
Porter, M. E., & Heppelmann, J. E. (2014). How smart, connected products are transforming
competition. Harvard Business Review, 92(11), 64-88.

13THINK BIG
slack.com. (2018). Slack. Retrieved 27 March 2018, from https://slack.com/about
Vanacker, T., Collewaert, V., & Paeleman, I. (2013). The relationship between slack resources
and the performance of entrepreneurial firms: The role of venture capital and angel
investors. Journal of Management Studies, 50(6), 1070-1096.
Villamagna, A. M., Angermeier, P. L., & Bennett, E. M. (2013). Capacity, pressure, demand,
and flow: A conceptual framework for analyzing ecosystem service provision and
delivery. Ecological Complexity, 15, 114-121.
Volberda, H. W., Van Den Bosch, F. A., & Heij, C. V. (2013). Management innovation:
Management as fertile ground for innovation. European Management Review, 10(1), 1-
15.