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10EntrepreneurialBusiness Models Examples from India
IntroductionA business model describes the rationale ofhow an organization creates, delivers, andcaptures value.On the other hand, a business plan is how youexecute the business model. If the businessmodel does not work, the business is unlikelyto do well.
1. Niche Concentrating on a small, differentiated slice of the marketSuccess factors• Compatibility of niche needs and product features• Size of niche• Willingness to pay• Accessibility
PerfintBased in ChennaiPerfint concentrates on making robotics foroncology interventions only
2. Long Tail in ecommerce, esorage and display of products has become very cheap Entrepreneurs are cashing in by selling small volumes of hard to find productsSuccess factors• Make everything available• Have a low price• Help find products
• Founded by Sachin and Binny Bansal in October 2007• Both had worked for Amazon• Growth: – 4 cr (2009) – 20 cr (2010) – 75 cr (2011) – 200 cr (2012) – 4500 cr (2015 – projected)
3. Mass Customisation Combines the low unit costs of mass production processes with the flexibility of individual customisation• Modularize products• Delay assembly• Use configurators to capture customer preferences• Assemble and deliver
4. Freemium Give away a free basic version and charge for upgradesThe free version can be;• Feature limited• Time Limited• Capacity limited• Seat limited• Customer Class Limited
InfoedgeSanjeev Bikkchandani capitalisedon the success of Naukri andextended the freemium modelto other similar websites
5. Unbundling• Breakup a product into independent components• Strip away add-ons• Sell components as a complete product• Up sell add-ons• Increase in prices is possible
ZohoDirectly competing against Salesforce.com andMicrosoft, Zoho prefers selling their business tools asstand alone components rather than as part of a suite 16. Zoho Viewer 17. Zoho Meeting 1. Zoho Assist 18. Zoho Mobile 2. Zoho Business 19. Zoho Notebook 3. Zoho Books 20. Zoho People 4. Zoho Calendar 21. Zoho Personal 5. Zoho Challenge 22. Zoho Planner 6. Zoho Chat 23. Zoho Polls 7. Zoho Creator 24. Zoho Projects 8. Zoho CRM 25. Zoho Recruit 9. Zoho Discussions 26. Zoho Reports 10. Zoho Docs 27. Zoho Search 11. Zoho Gadgets 28. Zoho Share 12. Zoho Wiki 29. Zoho Sheet 13. Zoho Writer 30. Zoho Show 14. Zoho Invoice 31. Zoho Support 15. Zoho Mail
6. Bundling• There are economies of scale in production,• There are economies of scope in distribution,• Marginal costs of bundling are low• Production set-up costs are high,• Customer acquisition costs are high.• Consumers appreciate the resulting simplification
Comprehensive Health checkups Comprehensive health checkups have become revenue drivers at several diagnostic centres
7. No Frills• Low prices are driven by low costs• Rarely will small firms have lower costs than large firms• Decrease costs by removing ‘frills’ which are costly but are not valued much by customers
8. PremiumGiving the customer a reason to pay moreTypes of premium products• Premium• Uber Premium• Mass Class
VardenchiCharges a premium of about two to five lakhs over theprice of a production line Royal Enfield
9. Open Business ModelsTapping into a community to build a business• Open source software• Crowd sourcing – Crowdfunding – Crowdcreation – Crowdvoting – Crowd wisdom
• Problems can be explored at comparatively little cost, and often very quickly• Payment is by results or even omitted• The entrepreneur can tap a wider range of talent• Entrepreneurs gain first-hand insight on their customers desires• The community may feel a brand-building kinship with the entrepreneur
10. Multi Sided Platforms• The entrepreneur acts like a go-between• To be effective, a sufficiently large pool is needed on both sides.• A strong value proposition needs to be crafted for both sides• Usually there are high network effects
Redbus• Turnover of 150 crores and headed towards 1500 crores• Walked into a space other had failed in• Success after they realised that bus operators were customers too
(Bonus) 11. Social EnterprisesWorking on business-minded solutions tosocial problemsVijay Mahajan – “Single goal optimization is a20th century anacronism”Social entrepreneurs approach socialproblems in a business like manner