MGMT 20143: Business Model Deconstruction of Power Ledger

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MGMT 20143 Think Big
Assignment 1: Business Model Deconstruction
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Executive Summary
The following report elaborated the business model of Power Ledger that comprised nine
building blocks explaining the business operations in short. The business model revealed that
the primary customers of the company consist of government agencies, private individuals,
and Business Corporations. The company is focusing on providing clean energy to every
community at an affordable price. The report also highlighted some critical success factors
and downside risks. The major risk is the legal obligation and regulatory risks due to the
complex procedure. Based on the determined risk, some recommendations have also been
provided, such as:-
 To resolve the security issues associated with the blockchain technology, it is suggested
that the network for distributing the tokens should be made decentralised such that a
buyer need not go through a prolonged process to track the transaction amount.
 In order to cater to the rapidly changing demands of the customers, it should be focusing
on innovation. This would strengthen the market position of the company in the market
and can help in gaining a competitive advantage over others.

Contents
Executive Summary...................................................................................................................2
Introduction................................................................................................................................4
Company’s Overview.................................................................................................................4
Business Model Description......................................................................................................4
Key interrelationships................................................................................................................6
Critical Success Factors.............................................................................................................6
Downside Risks..........................................................................................................................6
Recommended Changes.............................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................8

Introduction
A business model is an elaborated and well-conceptualised structure supporting an
organisation and elucidating the modus operandi of the company, how it operates, its values,
key partners, and much more. The following report is on the business model deconstruction
of "Power Ledger.” It discusses the business model canvas, key relationships, critical
success factors, and risks associated with the company. In addition to this, some
recommendations have also been provided in the end.
Company’s Overview
Power Ledger is a blockchain-based energy trading organisation that has a decentralised
process for selling and purchasing renewable energy. The company came into existence on
August 11, 2016, and very soon became a leading organisation that utilizes Eco-chain
technology for storing energy reading. It helps the energy retailer to manage their daily
demand and supply. In addition to this, its platform serves a mode for the retail investors to
invest in large scale renewable energy projects, such as solar farms and batteries. In 2017, the
company opened its sale and within three days over 100 million tokens out of which 25%
were sold in the first hour. The company raised $17 million AUD. In the same year, the
company was awarded two research project of value over $ 2.5 million AUD. In addition to
this, seven partners also contributed $8 million AUD for the project making it the second
largest funded program. The Australian government also provided $50 million grant for
innovative research and project.
Token Info
Token POWR
Platform Ethereum
Type ERC20
Investment Raised $13,232, 290
ROI 36.36%
Business Model Description
Power Ledger's management is focusing on empowering communities and individuals to co-
create the future's energy underpinning the development of resilient, carbon-free, and
personalised power system for the people. Based on this mission, the company's business
model is based which is explained below.

Key Partners
 National
Lifestyle
Villages
 Ocean Energy
 Vector Energy
 Ocean Energy
 Tech Mahindra
 DigitalX
 Bancor
 Murdoch
University
 Curtin Energy
 Greenwood
Solutions
Key Activities
 Peer-to-peer
trading of
regulated
electricity for
individual
users.
 Electricity
trading across
a grid and
manage the
demand and
supply of
electricity.
 Monetising
carbon and
renewable
energy.
Value Proposition
 To provide
world
community a
tool to explore a
new world for
energy
 To provide clean
energy available
to all at a very
affordable price.
Customer
Relationships
 Personal
assistance
 Client Eccentricity
 Customer Service
 Advisory and
assistance
Customer
Segments
Government
Agencies
Retail
Corporations
Individuals
Energy
Companies
EV-
Automobiles
Key Resources
 Large
investment
sources
 Innovative
team and
ideas.
 Government
Grants and
subsidise
services
Channels
 PowePort and Grid
Platforms
 Social Networks
 Call Centers
Cost Structure
 Charge, Fee, and Taxes
 Material and types of machinery
 licensing fees
 Operational Cost
 Salaries
 Marketing and sales
Revenue Streams
 Grants
 Investments
 Token Sales
 Interests
The above diagrammatic representation comprises nine building blocks representing some
sort of business aspects of Power Ledger. The above building block helps in understanding
the overall functioning of the company. In addition to this, it also focuses on earning high

returns by putting fewer efforts. Furthermore, the major projects of the company are timed for
high values and returns. The onshore projects are characterised by a bit of flexibility and
value generating. There are nine building blocks of the business plan that have
interrelationships with one another (Sikorski et.al, 2017).
Key interrelationships
Power Ledger has numerous key partners that are mostly investors and providing the required
funds to the company to carry out innovation and research and development. These partners
are helping in maintaining internal and external relationships. These are also a part of the
board of the directors that decides the strategies for the company (Tarhini, et.al, 2015). In
addition to this, the government agencies are also having some sort of relationships with the
company as they have invested $50 million AUD for the development of clean energy
devices and renewable energy project like solar farms. These interrelationships are linked to
the revenue stream of the company (Agarwal and Ansell, 2016).
Critical Success Factors
These are the factors that are leading the organisation's growth. These factors help in
achieving organisation goals. Power Ledger is a newly-formed start-up. However, in a very
short time, it has achieved huge growth (Pilkington, 2016). The factors that lead to its
success are:-
Innovation: Being a startup, it is making huge success on the basis of its innovating ideas of
providing affordable clean energy to everyone. In addition to this, the company is not only
catering to individual buyers but also to the government and business corporation. By making
use of innovation, the company is achieving its goals and objectives.
Unique Selling Prepositions: the research and development is the success factor for Power
Ledger. It provides a competitive advantage to the organisation as the products are well-
differentiated and are one of their kinds. In addition to this, the blockchain transaction
method is another unique selling quality of the company.
Branding and Marketing: the company is completely focused on branding and marketing
via word-of-mouth and social media. However, much of such efforts are focused on social
media. Other marketing media should also be considered for more growth (Pilkington, 2016).

Downside Risks
 As the company is based on the blockchain technology, there are many risks from the
government in the field of supply chain management, customer compliance, digital
identity, device authentication, customs, and provenance of products. Government
agencies are evaluating the whole blockchain-based industry in order to understand the
working. Many regulations have been imposed on the industry and some of them are
modified (Biswas & Muthukkumarasamy, 2016).
 Another risk is associated with the offering of the products and pay for them. Other
companies are indulged in the bogus offering with some fake whitepaper, business plan,
false advertisement, and promises of high value for the money. This has increased the
legal risks in the field.
 There are many security, regulatory, and market risks associated with blockchain
companies. The customers should be made aware of them and other illicit practices taking
place in the sector.
 Apart from the aforementioned specific risks, there are some product and financial risks
too. The company should be aware of the demand and preference for the type of products.
The preferences keep changing and even the advance products might not be successful.
Recommended Changes
 To resolve the security issues associated with the blockchain technology, it is suggested
that the network for distributing the tokens should be made decentralised such that a
buyer need not go through a prolonged process to track the transaction amount (Agarwal
and Ansell, 2016).
 In order to cater to the rapidly changing demands of the customers, it should be focusing
on innovation. This would strengthen the market position of the company in the market
and can help in gaining a competitive advantage over others.
 The company should invest in the marketing activities for creating awareness among the
local communities as they are not aware of the company and its services much. At
present, large corporations are buying the products. The company needs to increase
individual buyers too for better sustainability and profits (Fleming, 2016).
 Social media platforms should be used for creating a large social awareness of its
products and services. In addition to this, it can also be used to handle the complaints
regarding any product.

 More efforts should be made to narrow down the supply chain of the company by
collaborating with all the teams in the organisation (Sikorski et.al, 2017).
Conclusion
For a better understanding of the business model, Power Ledger had been taken. On the basis
of the whole study, it was determined that business organisations have numerous key
relationships and partners. Each has its own importance. For the newly formed startups, such
relationships are very crucial. Power Ledger is one such example and is doing pretty much
well in its field as large investments are coming for the company from private as well as
government agencies. In addition to this, all the success factors and associated downside risks
had been studied and recommendations had also been enlisted.

References
 Agarwal, R. and Ansell, J., 2016. Strategic change in enterprise risk
management. Strategic Change, 25(4), pp.427-439.
 Biswas, K., & Muthukkumarasamy, V. (2016). Securing smart cities using blockchain
technology. In 2016 IEEE 18th international conference on high-performance computing
and communications; IEEE 14th international conference on the smart city; IEEE 2nd
international conference on data science and systems (HPCC/SmartCity/DSS) (pp. 1392-
1393). IEEE.
 Fleming, L. (2016). Financing by and for the masses: An introduction to the special
issue on crowdfunding. California Management Review, Winter: 5-19.
 Pätäri, S., & Sinkkonen, K. (2014). Energy Service Companies and Energy Performance
Contracting: is there a need to renew the business model? Insights from a Delphi
study. Journal of Cleaner Production, 66, 264-271.
 Pilkington, M. (2016). 11 Blockchain technology: principles and applications. Research
handbook on digital transformations, 225.
 Sikorski, J. J., Haughton, J., & Kraft, M. (2017). Blockchain technology in the chemical
industry: Machine-to-machine electricity market. Applied Energy, 195, 234-246.
 Tarhini, A., Ammar, H., Tarhini, T. and Masa’deh, R.E., 2015. Analysis of the critical
success factors for enterprise resource planning implementation from the stakeholders'
perspective: A systematic review. International Business Research, 8(4), pp.25-40.