An In-Depth Analysis of Shippit Company's Business Model (MGMT 20143)

This report provides a comprehensive analysis of the Shippit Company's business model, utilizing the Business Model Canvas framework. It examines Shippit's executive summary, market segmentation, key partners (including Australia Post and BigCommerce), and value proposition, which focuses on transparent and rapid delivery. The report delves into the company's key activities, channels, revenue streams, cost structure, and critical success factors, such as its unique business approach and advanced tracking software. It also addresses potential downside risks like competition and the challenges of international expansion. Furthermore, the analysis highlights the interrelationships between the nine business model parameters and concludes with recommendations for improved business policies, innovative delivery methods, and advanced transportation systems. The report's findings are based on publicly available information and aims to provide insights into Shippit's strategic operations and market position.

Running head: SHIPPIT COMPANY 1
Shippit Company
Name
Institution

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Shippit Company
Executive Summary
This assignment determines Shippit’s business model by using the 9 parameters of the
business canvas. The above approach remains required so as to recognize and determine the
major factors that affect the business process as well as how it may be upgraded. The report
examines the major factors of any process of business as well as how every segment may be
created to improve business output.
From the research, it is true that:
 The organization aims to offer a transparent as well as rapid delivery process for
the consumers
 The firm’s target market segmentation remains relied on demography as well as
behavioral pattern of the consumers
 The main partners of the organization include BigCommerce and Australian Post
 The organization could encounter challenge from other wealthy rivals such as
Shippo
Business Model
It is true that the main objective of the BMA remains to offer a transparent medium of
communication between the customers and the retail organizations of the nation (DaSilva &
Trkman, 2014). The organization aims at creating a unique structure of the business process
where the customers shall be offered a wide range of aspects so as to enhance the general
logistics (Bocken, Short, Rana & Evans, 2014).
Building Blocks
The Osterwalder and Pigneur’s (2010) 9 building blocks help in segregating the major
parameters of the business as well as offer an overall outlook of the process of business.

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Customer Segments
Being that Shippit is a logistic firm the market as well as customer base shall consist of
the population from different age groups. The organization performs most of its tasks in
Australia and hence the market ad customer remains segmented based on desires of the
customers as well as behavioral pattern and economic scenario.
Table1: The possible as well as present customers of Australia
Parameters Australia
Total population of the country 25.50 as of the year 2020
Ration of sex (males per one hundred
females ratio)
99.50
Average yearly income ($) 80,133.00
It is true that Shippit concentrates on the consumers as well as retailers. After announcing
a merger with Australian post, the firm remained became the largest logistic firm in country
(Australia). The organization is currently aiming at adopting the idea of universal enlargement.
The organization aims to enlarge its operations in US and in order to enlarge its business in
United States, the company needs to solve the present scenario of the nation of growth (Joyce &
Paquin, 2016).
Table1: Scenario of the possible customers of the US
Parameters United States
Total population 331,002,615 as of 2020
Female and Male percentage Female 51% & male 49%
Average yearly income 101,000

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Key Partners
The organization was established in 2014, and it remained an active member in the
logistic market in the year 2015. At first, the firm worked mainly as a delivery as well as
shipping platform for a homeware boutiques and fashion of Sydney. Nevertheless, the
succeeding 2 years the company has exponentially enlarged its business via creating over seven
hundred and fifty retail firms in the process of business. The organization currently handles more
than two hundred and fifty thousand parcels each month. The single most partners the firm has
acquired remain the Australia post. Together with the Australia post, the organization became the
largest and dynamic logistics firms in the country. Apart from the Australia post, the other main
partner of the organization is called BigCommerce.
Value Proposition (VP)
The organization aims at presenting a perfect experience of delivery for the consumers
via creating the idea of 3 hours delivery window. Also, the online application presented by the
firm offers different characteristics such as an upgraded tracking system. It is true that the policy
of the business towards its customers is fairly lenient since the consumers may change the place
of the delivery even after the commodities remain shipped.
Key Activities
The company remains a delivery application that acts as a link between the customers as
well as the retailers. The main aim of this organization is to be an online platform where the
customers can buy commodities from all its retail stores. The organization acts as a medium of
delivery for the customers.
Channels

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The aim of the firm is to grasp the target segments of the customers and for that; a proper
channel of distribution is needed. Because Shippit is a logistic firm, the main channel of
distribution remains direct. The organization shall act as a link between the consumers as well as
the retail organizations. The firm’s online application of the remains one of the communication
channels for the consumers (Yoo, 2018).
Revenue Streams
In Australia, the Shipping industry earns revenue of approximately thirteen billion dollar.
Shippit as one of the organizations in the industry gives a substantial amount in the total amount
of revenue earned.
Cost structure
With rapid increase in business process, resource and expenses of the business has
increased exponentially for the past years, the Australia’s shipping industry possesses a low
profit margin as well as the actual total cost contributes to approximately 41% of the total
income (Asa.com.au, 2018).
Key Resources
The key elements required for any business process of a firm are the operations process,
services, the value proposition, as well as the supply chain process of the business functions.
These main resources are the following:
Physical resources: Warehouse, production machineries, security services, cold storage
hubs communication mediums.
Intellectual resources: The workers are the most important resources for the company.
The human resources (HR) are the supply chain as well as operations managers, technical

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support executives, customer service executives as well as other workers who are important
members of the organization.
Financial resources: This comprises of the total capital of the business, the lines of
credit as well as the total finance of the business. It is true that Shippit need to create a sturdy
financial base since transportation as well as delivery remains steep.
Customer Relationships
The management of organization aim to take into account engagement as well as
customer relations as the main priority of the business (Bellingkrodt & Wallenburg, 2015).
Constant communication with the current customers through text messages and electronic mails
shall enhance the correlation between the customers as well as the organization (Swan & Swan,
2018).
Interrelationships
The 9 parameters in the BMA remain interlined with one another and they all contribute
to a prosperous business process. One of the crucial factors is to find the current functioning
scenario of the nation. The firm’s value proposition relies on the trade plan of the organization as
well as its main objectives and aims. To find the VP, it is essential to find out the needs of the
clients as well as separate the target market. The functioning as well as the business process
determines the situation of any partnership as well as mergers with different firms. The
company’s expenditure relies on the total revenue that the company earned. Shippit’s distribution
channels remains of the key determining factors of the revenue as well as output of the business.
Also, transparent consumer correlation shall determine the sales as well as the business process.
Critical Success Factors

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This organization was established in 2014. It is true that the original business process of
the firm comprised a few retail firms. Nevertheless, in 2016, the firm handled parcels for
approximately eight hundred retail brands spread in all parts of Australia. After about 2 years of
business launch, the organization combined with Australian post that acts as one of the factors
for its success in the industry. Also, BigCommerce Australia lately amalgamated with this
organization (Shippit). The main important parameters of success for this company are its unique
method towards the business process. The company has also created advanced tracking software
that improves the business operation (Nußholz, 2018).
Downside risks
The main critical risk that may be observed for the firm remains intense rivalry from the
various companies that operate in the same line of the business process. Organizations like
Temando as well as hippo remain at par in regard to the market scenario and general business
process. Also, the organization needs to embrace the idea of universal business expansion. In this
case, the structure of different countries and the business process might affect the policies and
structure of the organization. Also, the organization shall be facing intense rivalry from different
logistic companies in various countries around the world such as United States.
Business Model Changes (BMC)
Shippit’s BMA concentrates on enhancing customer base and business expansion.
Nevertheless, the organization has to concentrate on creating new ideas, effective service
approach as well as better approach towards the consumers.
Conclusion
It is true that appraisal of the segmented process of business of the organization relied on the 9
important parameters of a business model. It is true that the stated ideas of the firm shall have a

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positive impact on the operation of the business. Nevertheless, there are some limits of the
business plan created by the organization and these factors may have an important influence on
the enterprise.
Recommendations
 Creation of suitable policies of the business for improved trade
 New as well as creative ideas about the business process as well as procedure of delivery
 A more advance medium of transportation needs to be executed
References

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Asa.com.au. (2018). Retrieved from http://www.asa.com.au/our-organisation/the-australian-
maritime-industry
Bellingkrodt, S., & Wallenburg, C. M. (2015). The role of customer relations for innovativeness
and customer satisfaction. The International Journal of Logistics Management.
Bocken, N.M., Short, S.W., Rana, P. & Evans, S (2014). A literature and practice review to
develop sustainable business model archetypes. Journal of cleaner production, 65, pp.42-
56.
DaSilva, C.M. & Trkman, P., 2014. Business model: What it is and what it is not. Long range
planning, 47(6), 379-389.
Joyce, A. & Paquin, R.L. (2016). The triple layered business model canvas: A tool to design
more sustainable business models. Journal of Cleaner Production, 135, 1474-1486.
Nußholz, J.L. (2018). A circular business model mapping tool for creating value from prolonged
product lifetime and closed material loops. Journal of Cleaner Production.
Swan, D., & Swan, D. (2018). Shippit says no to extra cash. Retrieved from
https://www.theaustralian.com.au/business/technology/shippit-says-no-to-extra-funding-
in-latest-raise/news-story/9049019e1c191fde4603a5bed17ebb14
Yoo, T. (2018). Why Sydney startup Shippit knocked back more than half of its $5 million
series A offer. Retrived from https://www.businessinsider.com.au/why-sydney-startup-
shippit-knocked-back-more-than-half-of-its-5-million-series-a-offer-2017-5