Project Report: Analysis of Xerofone's Innovation and Business Model

This project report examines Xerofone, a pre-revenue startup developing a cross-platform application to limit smartphone usage. The report analyzes the business landscape, including industry trends, competition, and opportunities in the UK and Ireland. Xerofone's current incremental innovation strategy and product innovation are assessed, highlighting its unique features like no data accessibility and 3G/4G versions. The business model is described, focusing on value proposition, customer segments, and revenue streams. The report includes a business model canvas, SWOT analysis, and recommendations for business model innovation, pricing, and target segments. The conclusion summarizes the findings and emphasizes the potential for Xerofone's success in addressing smartphone overuse issues.

Innovation and
Entrepreneurship

Contents
INTRODUCTION...........................................................................................................................1
BUSINESS LANDSCAPE..............................................................................................................1
CURRENT INNOVATION STRATEGY......................................................................................6
CURRENT BUSINESS MODEL....................................................................................................7
Description of the organisations business model.........................................................................7
Business model canvas................................................................................................................8
Strong and improvement require aspects of organisation’s business model.............................10
BUSINESS MODEL INNOVATION...........................................................................................11
RECOMMENDATIONS...............................................................................................................13
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Innovation is a concept of introducing a unique idea and then converting that idea into an
economic activity. This concept of innovation involves generating ideas which can serve and
facilitate people. There are mainly two classes of innovation; first is evolutionary innovation and
second is revolutionary innovation (Aagaard, 2019). When an innovative idea turns into a
business venture, it is known as entrepreneurship. This project report is developed in order to
build understanding about the concepts of innovation and entrepreneurship. Remit or scope of
this project report is to grab the opportunity of investigating various aspects of innovation in a
particular start up (Allen and Truman, 2017). This report is intended to provide remit for
enhancing individual career development and knowledge resource. In order to do so, this project
includes business landscape of a start up which includes analysis of its current innovation
strategy and business model so that valid recommendations can be made against the pricing
strategy, post sales support and target segments.
The start up case study which is selected for this report is Xerofone. It is a start up which is
currently in pre revenue position and is planning to launch their cross platform application in UK
and Ireland. This start up has created an application for both Android OS users and iOS users.
The software application is created to enable its users such as schools, organisations and parents
to limit the usage of the smartphones by time lock. This application is capable of disabling the
usage of camera and web browsing. By this application, Xerofone is intending to restrict the
usage of smartphones so that students and employees can be only use basic functionalities of
their smartphone while their learning or working. This start up is currently aim to launch their
application into UK and Irish market. The main aim behind establishment of this application is to
solve the problem to smartphone overuse so that the problem of distracted learning, less quality
time with family, employee distractions etc. can be resolved. There is no direct competitor of this
organisation but there are various organisations which offer similar applications as Xerofone.
The most attractive unique selling point of Xerofone is that it does not collect any data about the
user and does not require any password to enable the functionality of this application.
BUSINESS LANDSCAPE
Xerofone is operating in software development industry where competition is quite high but
the features which is intended to be provide by Xerofone by their application results into cutting
1

down their competition and it can be said that there is no direct competitor of this organisation.
Xerofone is currently in pre revenue stage; in this stage a start up is valued at billion dollars
without recording any actual sales. The reason behind not having any direct competitors are the
unique features which are offered by the software application of Xerofone. Even after this, there
are few indirect competitors of Xerofone which on the surface provides similar features as
Xerofone.
In order to effectively understand the sector in which Xerofone is operating, various
statistical references can be used. According to the post BREXIT report of ibis world, the
industry of software development is rapidly growing. Various constraints to proof the growth
rate are stated below:
 Total revenue which this industry has aerated in the year of 2019 is increased to 31
billion pounds.
 The reason behind the enhanced revenue is the increased number of businesses engaged
in this industry. Total number of businesses operating in software application industry are
35,127.
 This industry has attained in the annual growth of average 9.4%. This growth is
accounted or the years 2014 to 2019.
2

 By these constraints of high revenue generation and huge number of businesses operating
in this industry, the industry employment has also increased. The total number of
employees which are currently working in this industry of UK are 196615.
From the above statistics, it can be evidently said that the industry in which Xerofone is
operating is one the most growing industry in United Kingdom due to its increased number of
businesses, the overall competition in this industry is also quite high.
Few competitors of Xerofone are Screentime, Ourpact, iKydz, Kidslox. All these are
software application which are developed in an intention provide parental control over the
smartphones but the services provided by these companies are less than Xerofone. There are
various benefits provided by Xerofone which can influence its target audience to use Xerofone
application over its competitors. To better understand this, a comparison between Xerofone and
its competitors on the basis of their features and benefits is developed below:
Basis Xerofone Screentime Ourpact iKydz Kidslox
Data
accessibility
Xerofone
does not
allow schools,
parents and
organisation
Unlike
Xerofone, it
allows its
users to
access data of
Allows data
accessibility.
Allows data
accessibility.
Allows data
accessibility.
3

to access the
data of their
students,
children and
employees as
they believe
that it
breaches the
privacy. The
software
application of
Xerofone
only enables
to disable
smartphone
function but
does not
enable the
data
accessibility.
their
controlled
devices due to
which it is
only suitable
for parents.
3G/4G
version
Xerofone is a
software
application
which has its
3G and 4G
versions.
This
application
only works
via Wi-Fi
There is no
3G version
available of
this
application.
iKydz only
works with
network of
WiFi which
means as
soon as
children is out
of the range
of their home
WiFi, they
can use any
There is no
3G version
available of
this
application.
4

application
using a 3G
network.
Price £4.29 £2.99 $6.99 £15.00 $3.99
From the above comparison table, it is evident that Xerofone provides various benefits
and unique features which no other application software is offering. The price of Xerofone is
comparatively higher than its competitors but this price is worth the features and benefits provide
by this application.
Business environment is the collection of various factors which every organisation has to
face operating in those surroundings. This environment has both opportunities and threats which
occurs due to environmental factors. The business environment of software application
development industry of UK provides few opportunities and threats to Xerofone which are
mentioned as below:
Opportunities
United Kingdom is a developed country due to which the level of education in this
geographical area is high. Xerofone is a software development organisation and it is important
for such organisation to hire skilled employees who has the knowledge of information
technology. As a UK operating organisation, Xerofone has the opportunity to hire skilled
employees who will enhance the quality of this organisation. Another opportunity in this industry
for Xerofone is the regulatory cooperation of United Kingdom which works for the welfare of
start up.
Threats
Due to increasing demand of software application, the number of businesses has been
increased in this industry which is a threat of Xerofone as the number of their competitors is
continuously increasing. As Xerofone is intending to launch its application in UK, the business
environment of UK is still involved with the conflicts of Brexit due to which this organisation
may face issue of investment funding which is a critical threat.
Sector trends are the trends which affects the functioning of the businesses operating in
that sector. As Xerofone is operating in software development sector, all its opportunities and
threats affects functioning of Xerofone. Currently Xerofone is targeting school administration
and organisations from which they deal B2B. As per the social trends, every organisation of
5

smartphone usage restriction applications targets parents so that their children can use their
smartphones with the permission of their parents. This social trend can provide opportunity to
Xerofone to operate in B2C sector as well and offer their application to parents.
Social/consumer behaviour trends are the prevailing activities and preferences of
consumer which they perform repeatedly (Anthony, 2012). In the industry of software
development, a consumer trend which is observed is that consumers whether individual or
enterprise prefers to use free applications so that they can first trust the software and then can
pay according to the worth of that application.
The above content effectively provides a business landscape for Xerofone by mentioning
the sector in which this organisation is operating and by stating various constraints such as
opportunities and threats present in business environment.
CURRENT INNOVATION STRATEGY
Innovation strategy is the plan which an organisation develops for their products and
services (Audretsch, Lehmann and Link, 2019). Usually an innovation strategy is of two types
which are incremental and radical. Incremental innovation strategy allows an organisation to
innovate existing products of the market which involves low risk and high certainty of
competitiveness. On the other hand, radical innovation strategy allows an organisation to
innovate not only the product but the whole market (Banks, 2016). The risk factor in this
innovation strategy is high as the organisation intend to launch a product or service which does
not even have a market (Barringer and Ireland, 2016).
Xerofone is a start up company which intend to launch its software application in the market
of United Kingdom and Ireland. The marketing strategy adopted by this organisation is
incremental. The software application of Xerofone is an innovative product but this product is
developed by innovating the existing parental controlling applications existing in the market of
software application development industry. Current innovation strategy of Xerofone is
incremental by which they have innovated their software application by including some unique
features which no other application is offering yet in the market.
Innovation can be classified into three classes which are product innovation, process
innovation and business model innovation (Blundel and Lockett, 2011). In the case of product
innovation, an organisation develops and launches a new product which has features that are
unique in its nature and no other organisation in market yet is offering that product with same
6

features. It must be noted that product innovation does not mean launching an entire new product
but launching a product with few unique features by innovating it on the surface. On the other
hand, process innovation is a procedure of bringing new techniques of producing a product by
which quality, appearance or suitability of the product enhances. Business model innovation is
the another type of innovation in which an organisation, instead of innovating their product or
process, make changes in their current business model. The start up of Xerofone have developed
the product innovation in which they have innovated the current parental control applications. In
the United Kingdom market of software application development, there are various organisations
which have development applications for parental control by which the users can restrict the
usage of the smartphones by their children. But, Xerofone has innovated this product and
included some unique features in their application such as no data accessibility, synchronisation
facility and 3G/4G versions by which this application is not only suitable for parents but is also
suitable for schools and organisations which can use this application to control the usage of
smart phone of their students and employees. By this Xerofone can grab the market of B2B as
well.
From the above content, it can be summarised that Xerofone’s current innovation strategy is
incremental and type of innovation is product innovation. With the use of these innovation type
and strategy, Xerofone has innovated their product by adding few unique features which no other
organisation is offering which makes it suitable for both B2B and B2C business model.
CURRENT BUSINESS MODEL
Description of the organisations business model
Business model is a plan by which an organisation intends to make profit (Boutillier,
Levratto Carrie, 2016). The business model is a complete plan for future in which organisation
strategize their organisational structure, revenue streams, expenditures, employment plans and
others (Bridge, O’Neill and Cromie, 2012). A business model is usually developed at the time of
pre establishment of an organisation. Or it is also developed at the time of business reborn. A
new organisation develops a business model in order to attract investments so that they can
operate effectively. The main aim behind developing a business model is to identifying revenue
streams and establishing details of financing (Bridge, 2017).
7

Xerofone is a start up which is currently in a position of pre revenue and is intended to
launch their software application in the market of United Kingdom and Ireland. Currently,
Xerofone only intends to offer their product to their corporates so that they can control usage of
smartphones of their employees by which productivity of their business can be enhanced.
Xerofone is a business enterprise which currently intend to offer their product to other business.
This analysis states that Xerofone’s current business model is B2B. B2B or business to business
model refers as a structure in which an organisation sells their products and services to other
organisation instead of offering them to individual parties. Under the business model (B2B) of
Xerofone, organisation is planning to generate revenue by charging a fee for monthly usage of
their application from the corporate organisations. This model of the business will allow
Xerofone to make quick decision making as the number of consumers of this organisation will
obviously be less.
Business model canvas
The business model of Xerofone can be better understood with the help of business canvas
model. A business canvas model is a tool from which business model of an organisation can be
represented in a structured and straight forward way (Cook, 2016). A canvas of Xerofone is
developed below by considering its various constraints:
Key Partners:
Our suppliers are
domain supplier
and webpage
supplier.
We are acquiring
a domain name
from our
supplier.
Our key partners
perform activity
of arranging
suitable domain
Key Activities:
Our value
propositions
require
effectively
software
development and
regular
application
development to
remove bugs.
Our revenue
streams are the
Value
Proposition:
We deliver the
value of
productivity and
employee focus
to our corporate
customers.
We are helping
our corporate
clients in
resolving their
issue of high
Customer
Relationships:
Our customer
segment of
corporate houses
expects us to
maintain a
formal
relationship by
which they can
contact us for
after sales
Customer
Segments:
We have a
business model
of B2B due to
which we only
have one
customer
segment which is
corporate houses
from which we
create value by
charging them a
8

name for our
business.
fee charged by
corporate
organisations.
Our customer
relationships are
with human
resource
management
organisations.
usage of
smartphones by
their employees
due to which
their productivity
has been
reduced.
We only have
one customer
segment which is
corporate houses
to which we are
offering our
application
software of
Xerofone.
services.
These
relationship with
customer
segment is
expensive as
management of
our organisation
has to not only
assist about the
usage of our
application at the
time of sale but
also after the
sale.
fee against the
usage of our
software
application.
Key Resources:
Our key
resources are
skilled
employees who
develops and
maintains the
software
application.
Our distribution
channels are
human resource
management
firms which
often act as
intermediately to
Channels:
We have planned
to reach our
target customers
of corporate
houses by
mediator of
HRM firms.
9