Business Model Report: Disruption, Concepts, and Volvo's Canvas Model

This report provides an overview of business models, highlighting their importance and various types such as aggregator, franchise, bricks and clicks, nickel-and-dime, and freemium. It discusses the concept of disruption in business and its impact on traditional models, using examples like eBay and Myer's virtual reality store. The report then focuses on Volvo's business model, identifying it as a combination of Manufacture and Distributor models. A business model canvas for Volvo is presented, detailing key partners, activities, value propositions, customer relationships, customer segments, key resources, channels, cost structure, and revenue streams. The analysis emphasizes Volvo's innovation, brand image, and extensive global presence. This student contributed assignment is available on Desklib, a platform providing a wide range of study resources and AI-powered tools for students.

Running head: BUSINESS MODEL

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Reply to question 1
Business model
Put simply, according to Lewis, business models are basic plans that enables the business
planners to chalk out the ways through which money can be made. Business model is as simple
as that. A proper business model is imperative to any business. Business model is a frequent term
that is mostly used by most of the business organizations and consultancy firms. However,
charting a business model is not that easy (Chambers & Humble, 2017). It must be kept in
concern that all the aspects of business model are hypothetical. That is, the investment principle
amount, the expected returns, the expected sales, the estimated profit margins and the rest of the
other criterion are all assumed.
Since all the aspects of a business models are assumed, it may be a question that what
may be the possible causes a business model remains imperative to any business organization or,
how do business models for the organizations create value. In the book “The New, New Thing:
Silicon Valley Story”, author Michael Lewis states that business model is essentially a form of
art. Business models cannot be charted out by novice and neither extreme talent is the only
criteria to craft an apt business model. It needs experience and endeavor to make business plans.
At times, it needs a lot more to propose an apt business model for any particular organization.
A business model is a strategic plan, it is a conceptual structure that is used by companies
and business organizations that induces the goals and aims of the company and also charts the
way the company determines the achieve the respective goals (McKenzie 2017). Almost all the
policies, ways, methods and approaches that are taken by a particular company are essentially a
part of the business model that it is following. Business models were in use since the very start of

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business, that was mostly done by sailors on voyages. Business models began its widespread use
with the advent of computer technology. A business model mainly has two parts or two
categories. While the first category sums up the details of product including its designing and
manufacturing process, the other category specifically deals with marketing and sales of the
product. This marketing and sales department that is incorporated within the second category is
yet divided into sub divisions like looking for the target customers, target markets and product
distribution.
Business models are of different kinds. In order to understand the imperative nature of
the business models that are used by different organizations, it would be apt to describe some of
the business models.
Aggregator
Aggregator is a business model that has been developed lately. This model is particularly
featured for business organizations that are essentially service providers. Such business
organization does not sell goods to customer permanently (Vatanparvar & Al Faruque, 2015).
Rather he services that are sold by these type of business organizations also are their own in
house brand. Revenue is generated in form of commissions. The examples of such organizations
are Uber, OLA, OYO etc.
Franchise
Franchise is not exactly a business model but a type of business. In this particular concept
there are no fresh business model that are developed (Lee et al., 2016). The business undertakers
reuse the already established ideas and ideologies. Of course the new undertakers pay royalties to

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the business by keeping the theme, menu, food quality even advertisement and promotion
exactly same. For example, Dominoes, Pizza Hut
Bricks and Clicks:
It is again another business model that has developed at recent times. This particular
business model focuses on marketing and sales both on offline and online portals. The business
is thus more flexible and the customers gets access to both online and offline stores of a
particular company. This particular model is adapted in almost all the business organizations,
especially in apparel companies.
Nickel-and-dime
This business model is adapted by business organizations that are new in the market or
want to attract many customers (Cao, 2014). This model aims at keeping the prices of products
and services comparatively low than other existing companies. For example, cheap airfares
Freemium
This is one of the newly innovated business models where certain services and products
are given out for free to the customers. However, in order to access premium or executive
services these companies chare a premium interest from customers (Van, Podoynitsyna &
Langerak, 2017). The free services are the basic services that are free of restrictions. For
example, Zomato, Saavn etc
Disruption in business
Disruption in critical term means destroying an established traditional thought in order to
reconstruct something new and innovative. With the advent of computer and modern technology

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it has become imperative o discard the old business process and to modify the existing models. If
that is not done then business organizations would be laid back in the competition. For example,
hotel business is now a day’s totally online (Rhodes, 2016). Tourists seldom books hotel after
visiting a place. All the processes are done prior. A suiting example of disruptive model can be
given in the case of eBay and Myer. eBay partnered with Myer in order to bring in he concept of
virtual reality store and launched the same. In order to access the store and shop, tehe customers
just simply needs to install the app on their respective mobile phones which then needs to be
attached to a pair of shopticles and the customers then would be ready to shop over phone. The
most interesting feature of this particular feature is that the customers would be able to
experience shopping in 3D features. Thus it can be seen that while on one hand the technology is
disrupting the notion of online shopping, on other hand, it is also disrupting the ways customers
buys garments online. However, this disruption is causing a phenomenal change in the notion of
online shopping among customers and there is a complete different way in which the customers
perceive engagement with brands.
Disruption in business can be achieved through staying focused, innovative and
collaborating with technological advancements and analyzing the ways it can be implemented in
the present business structure.
Reply to question 2
Volvo business canvas model
Volvo does not follow a single business model but a combination of two business
models. The business models that it follows are Manufacture and Distributor. Volvo
manufactures its own engines, valves, hardware and spare parts. It also distributes the same for

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domestic and commercial purposes. For commercial purposes the company exports engines for
marine purposes and also export to other brands like it exports engines for Renault trucks. Apart
from that Volvo also exports engines for boats used for commercial purposes. Manufacture
model is self-explanatory. Since the company has its own trucks, cars, buses etc all the parts are
made and sold by the same. The business model canvas of Volvo is charted out for better
understanding.
Key Partners
 Companies
manufacturin
g parts and
components
 Companies
dealing with
technology
developing
 EPC
companies
 Suppliers
 Network of
distribution
Key Activities
 Firms of
financial
services
 Supports and
services
 Sales and
marketing
 Designing
and
engineering
 Production
of goods
 Manufacturi
ng of goods
Value Proposition
 Value
propositions
is with held
in its
transportatio
n business
 The spare
parts and
other
components
are of high
quality
 Manufacturi
ng taking
contract
from other
companies
Customer
Relationships
 Creating
brand
awareness
 Innovating
products
 Building
trust
 Modification
of the
existing and
old products
 Customer
service
Customer
Segments
 EPC
companies
 Dealing with
customers
like giant
industrialists
and
municipalitie
s
 Industries
that are
concerned
with
manufacturin
g
equipments
 In core
sector
industries,
plants and
buildings
 Car making
industries
Key Resources
 Innovations
are open to
all
 Excellent
network
 Brand image
 There are
total of 18
countries
where the
production
facilities are
available
 More than in
190
Channels
 There are a
number of
dealers
 Social media
plays a huge
role
 The
company has
its own
websites that
approaches
many at a
time
 Volvo
museum

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countries the
products and
components
of Volvo
company are
sold.
 The property
is
intellectual
 Latest
technology
is used in
production
 The teams in
the company
are always
innovative,
curious and
open minded
 Well
scattered
service
centers
Cost Structure
 Technology
 Taxes to government and intercity and
interstate taxes
 Customs
 Employee wages
 Production costs
 Buying of raw materials
 Implementing software
 Parts
 Components
 Facilities
 Fabrics and paints
 Assembling of the products
 Transporting the products
 Packing the products
Revenue Streams
 Rental sources
 Licensing process
 Financing the company and insurance
 Components
 Services related to technical default
 Sale of the products like buses, cars,
trucks, engines, construction components
Business model canvas
Source: Created by author

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Reference List
Chambers, I., & Humble, J. (2017). Plan for the planet: a business plan for a sustainable world.
Routledge.
McKenzie, David. "Identifying and spurring high-growth entrepreneurship: experimental
evidence from a business plan competition." American Economic Review 107.8 (2017): 2278-
2307.
Vatanparvar, K., & Al Faruque, M. A. (2015). Design space exploration for the profitability of a
rule-based aggregator business model within a residential microgrid. IEEE Transactions on
Smart Grid, 6(3), 1167-1175.
Lee, C. K. H., Choy, K. L., Ho, G. T., & Lin, C. (2016). A cloud‐based responsive replenishment
system in a franchise business model using a fuzzy logic approach. Expert Systems, 33(1), 14-29.
Cao, L. (2014). Business model transformation in moving to a cross-channel retail strategy: A
case study. International Journal of Electronic Commerce, 18(4), 69-96.
Van Angeren, J., Podoynitsyna, K., & Langerak, F. (2017). Proceed with Caution: Analyzing the
Performance of Freemium Business Models in the Apple App Store. In Academy of Management
Proceedings (Vol. 2017, No. 1, p. 13593). Briarcliff Manor, NY 10510: Academy of
Management.
Rhodes, C. (2016). Democratic business ethics: Volkswagen’s emissions scandal and the
disruption of corporate sovereignty. Organization Studies, 37(10), 1501-1518.