Business Model Analysis and Case Study Report - MIS, DU

This report provides a comprehensive analysis of business models, beginning with a definition of business models and their key elements, including value proposition, profit formula, key resources, and key processes. The report then examines the business models of Chaldal.com, Daraz.com, and Best Buy, detailing their revenue models, customer segments, and value propositions. Finally, the report discusses the factors driving the need for business model changes, such as disruptive innovation, new technologies, and shifting bases of competition. The report emphasizes the importance of adapting business models to maintain competitiveness and capitalize on new opportunities. The report was submitted by a student of the Department of MIS, FBS, University of Dhaka.

Reinventing Business Model
1. What is a business model? Discuss the elements of a business
model.
Ans. Business models are the method and strategy that a business or organization
uses to operate that includes the purpose, systems, and people that work together to
add value to customers. A business model is a company's plan for making a profit.
It identifies the products or services the business will sell, the target market it has
identified, and the expenses it anticipates.
Elements of a business model:
Value Proposition: Value propositions means a product that helps customers to
more effectively, conveniently and affordably do a job they have been trying to do.
A specific promise to customers that a product or service will enable them to solve
a problem in their lives.
Profit Formula: Profit formula means assets and fixed cost structures, and the
margins and the velocity required to cover them. Profit formula is revenue and cost
structure that enable either profitability or, for nonprofits, long term fiscal
sustainability.
Key Resources: Key resources means people, technology, products, facilities,
equipment, brands and cash that are required to deliver a particular value
proposition to the targeted customers. The focus here is on the key elements that
create value for the customer and the company, and the way those elements
interacts.
Key Processes: Key processes means ways of working together to address
recurrent tasks in a consistent way: training, development, manufacturing,
budgeting, planning, sales, services, etc. Key processes also include a company’s
rules, metrics and norms.

2. Identify and discuss the business model of Chaldal.com,
Daraz.com and Bestbuy.
Ans. The business model of Chaldal.com, Daraz.com and Bestbuy are identified
and discussed below:
Chaldal.com
Chaldal.com is an online platform for grocery and food products. It is a delivery
based company in Dhaka, Bangladesh. The goal of this company is to give the
customers the experience of shopping in a big box store with huge selections. This
company was founded in 2013.
Business model: Chaldal.com is an E-business. It uses B2C system. This company
provides its products directly to their customers at their home. Chaldal currently
stocks more than 4000 products in its two warehouses and delivers goods within an
hour. It uses a cloud-based inventory system to allow users to see what items are
available in real-time.
Daraz.com
Daraz.com is the largest online shopping marketplace in Bangladesh showcasing
products from the most trusted brands. This company offers the customers a wide
selection of products from renowned brands in Bangladesh with a promise of fast,
safe and easy online shopping experience.
Business model: i) Revenue model: When a customer orders any product through
Daraz portal then the seller sends it to the warehouse near him. Daraz gets the
ordered product from seller, then Daraz sends it to the customer with its own
delivery man. Once customer gets the product in hand, they make the payment
through online banking. Once the product is delivered then Daraz takes the agreed
determined commission from the selling price and sends the remaining portion of
the money to the seller’s bank account. This is how Daraz is doing business in the
market.
Bestbuy
Best Buy is a retailer of technology and electronics products. Its goal is to provide
high-quality customer service, products at reasonable prices and knowledgeable
technical support to its customer base of general consumers.
Business model:

i) Customer segments: It provides a range of technology products, services and
solutions to a broad range of customers. The Company is directly customer-facing,
serving general consumers primarily through its network.
ii) Value propositions: Its competitive pricing and discount deals, with the
Company offering products at reasonable prices, as well as offering deals and
discounts, including weekly and daily deals.
iii) Resources: Best Buy’s key resources are its stock of products, its network of
physical retail and distribution infrastructure, its online and mobile channels, its
partnerships, and its personnel.
iv) Profit formula: Best Buy generates revenue through the sale of various
technology and electronic products through its physical retail stores and online
channels, as well as the provision of technical support services.
3. Discuss when and what factors are driving the need for changing
the business models.
Ans. A proper business model helps us to figure out elements such as: business
concept – what problem are you solving for whom; how you will create customer
value; how your product or service will get to customers; how your business will
stay competitive and all revenue and costs you can anticipate. But sometimes we
need to change these models when significant changes are needed to all four
elements of our existing model. It’s not an easy task. Management judgment is
clearly required. The following factors are driving the need for changing the
business models-
i) The opportunity to address through disruptive innovation the needs of large
groups of potential customers who are shut out of a market entirely because
existing solutions are too expensive or complicated for them. This includes the
opportunity to democratize products in emerging markets.
ii) The opportunity to capitalize on a brand new technology by wrapping a new
business model around it or the opportunity to leverage a tested technology by
bringing it to a whole new market.
iii) The opportunity to bring a job to job done focus where one does not yet exist.
iv) The need to fend on the low-end disrupters.

v) The need to respond to a shifting basis of competitions. Inevitably, what defines
an acceptable solution in a market will change over time, leading core market
segments to commoditize. Hilti needed to change its business model in part
because of lower global manufacturing costs.
Creating a new business model does not mean the current model is threatened or
should be changed. A new model often reinforces and complements the core
business.
Submitted by:
Tazrian Ferdous Farita
BBA Roll: 029-15-058
Department of MIS, FBS,
University of Dhaka.