Analysis of Business canvas model of Green Wave Café

Question

Task: Prepare a report critically discussing about the nine segments of business canvas model of Green Wave Café. Analysis of Business canvas model of Green Wave Café

Answer

1. Introduction
The present study on business canvas model is focused on the concept of strategic management or lean start-up template that helps in developing new or existing business models. This is a visual chart which comprises different elements which describe the products of the company. It also explains the value proposition, customers, finance and infrastructure. Business canvas model was created by Alexander Osterwalder. It is quite essential to understand the condition of the company before starting a business model. Here the competitors are also analysed so that the value proposition of the company can be made (Antikainen & Valkokari, 2016). This model helps in improving the clarity and focus of the business and the goals that they are trying to achieve. All the traditional methods are eliminated and a new plan is made.

2. Business Idea
These days’ customers are having great concerns for the environment. They are opting for eco-friendly products and methods in their daily lives. Due to this reason, most of the businesses are opting for eco-friendly techniques. The business idea of this report is to plan a green business for the restaurant. The name of the company is Green Wave Cafe and this will be operating in South Africa. The cafe will be targeting Cape Town because this city is known for its natural settings and is one of the largest in the country. South Africa is chosen because there is high income in the food and beverage sector. It is around R2,684,200,000 and the rate of employment is also increasing (Southafricanmi.com, 2019). The nine factors of the business canvas model will be analysed for this business idea. This cafe will be serving green food but will be saving the environment in many other ways. They will be using eco-friendly products, conservation of water and energy, reducing waste and having a strict recycling policy. These points will help the business to gain a large amount of profit. The demands of the customers will be handled easily. According to some surveys customers are ready to pay more for such green restaurants. This will also maximise the potential and innovation within the business.

3. Business Canvas Model

3.1 Customer Segments: The practice of customer segmentation is to divide the customer base into individual groups (Ghoniem & Maddah, 2015). It depends on gender, age, spending habits and interest. It is necessary to understand the market size and the number of people in the customer segment. SEM tool will be used for segmenting the customers. The SEM employees are using flowchart to find the correct set of customers. This tool finds the customers on the basis of performance, activities, familiarity and messaging. The customer segment for Green Wave Cafe will be between the ages 20 to 60. The business will be targeting both male and female. They will be looking for people who are having some concerns with environmental issues. These people will understand the concept of this cafe easily. The spending habit of the customers must be high because there will be a lot of spending done on the business. However, according to the nature of customers these days, they are ready to spend extra amount. Middle and high-income groups will be the main target for this business. This will happen if the cafe is using some unique and innovative methods for saving the environment.

3.2 Value Proposition: The promise of value for delivering, communicating and acknowledging is known as a value proposition (Payne, Frow & Eggert, 2017). This can be applied to the complete organisation or a particular product and service. Value proposition of business canvas model helps to improve the understanding of the customers and their engagement. The ideal customer can easily identify the services and benefits that the business will be providing them. Green Wave Cafe will be majorly focusing on using some eco-friendly techniques for attracting the customers and saving the environment. They are planning to reduce the usage of water. This will be possible through low flow spray valves. Green Wave Cafe will be investing in appliances that are energy-efficient. It will be possible through LED and CFL bulbs, motion sensor lights and cleaning of the condenser coils in the refrigeration equipment. The traditional plastics will not be used. There will be eco-friendly disposables. The sustainable dining room will be built by the company. They will be using no cloth or napkins. Linens will be used as an eco-friendly option.

3.3 Channels: The avenues through which the customers come in contact with the business are known as channels (Bertels, Koen & Elsum, 2015). The readings used to prepare this business canvas model signify that it is an essential part of the sales cycle. It also comes under the marketing plan of the business. Green Wave Café will be going eco-friendly and hence they will not be using pamphlets for advertisement. They will be using some ways that are beneficial to the environment. All the services of the café will be available on their website. It will be giving all the details to the customer about the various steps they are taking for helping to save the environment. Further, they will be doing some social media advertising through Facebook and Instagram. Here they will be uploading pictures with green food that they will be serving in their café. Green Wave Café will upload posts to support the environment. For the promotional purpose, the café will be sending emails to customers about their food and services. They will also be having some blogs that will discuss different environmental issues and awareness.

3.4 Customer Relationships: The ways through which business interacts with the customers is known as customer relationships (Nykamp, 2019). Through the value proposition and customer segment, the relationship with the customers will be understood. Here the points of engagement will be identified. Business operations comes under business canvas model can be defined easily through customer relationship. It will also help to identify the opportunities for the business. Green Wave Cafe will be having green food. Most of them will be sustainable and organic in nature. There will be vegan options for customers. This will be giving a boost to the environment and the people. There will be a cut-back on plant-based food so that environmental damages can be saved. The needs of the customers and their recommendations will be analysed through the method of feedback. Customers will also be getting an option for registering their likes and dislikes. The employees will be made aware of the perspective of customers.

3.5 Revenue Streams: The way in which the business converts the value proposition to the problems of the customers is known as a revenue stream (Jackson, Scott & Schwagler, 2015). This means to provide some financial gains. The pricing methods of the business can be known through this factor. The pains of the customers are solved through this method. The main source of the revenue stream for Green Wave Cafe will be through food. Customers are ready to pay a high amount for the services that the cafe will be providing. Hence, vegan, organic and sustainable food will get the revenue. The cafe will be opting for referral feeds. This means that more the referrals hence, a huge amount of money will be gained. In the referral, there will be a certain amount of discount given to the customers. But the footfall will be increasing rapidly.

3.6 What is the role of resources segment of business canvas model? The resources that are required by the business for handling their operations are known as key resources. Without these resources, it will be difficult for any company to achieve the key activities of their business. Green Wave cafe will also be requiring some resources which can handle their daily activities properly. These will be computer, employees, chefs, tables and chairs, dishes and cooking equipment, oven, internet connection, space for running the cafe. All the equipment will be eco-friendly in nature. Reusable towels are one such resource that can be replaced from the old paper towels. The car-pooling method will be opted by Green Wave cafe. This will be getting the employees and chefs on a daily basis. It will also be used for delivering food products to customers. This resource will be helpful in reducing air pollution in the environment. There will be organically grown flowers and plants. This will make customers realise that they are close to the environment.

3.7 Key Activities
The actions that will be undertaken by any business for achieving their value proposition for the customers are known as key activities. However, some amount of money and time will be needed for managing these activities. Green Wave Cafe will be having certain key activities as discussed in this study of business canvas model. They will try to provide good customer services. All the food items will be served to the customers a fast and efficient manner. The cafe will be maintaining its quality of food. All organic fruits and vegetables will be used by this cafe. The employees will be qualified enough to explain the food items properly to the customers. Green Wave Cafe will be designing their place in a unique way so that everyone can be attracted. They will be hiring a web development team for making the website easy to use for the customers. They will ensure that the cafe is able to provide everything that a customer needs.

3.8 Key Partnerships
Key partners of business canvas model mainly include a list of external people that helps in the operation of the business. It can be some external companies, suppliers and parties. They help in achieving the key activities and value to the customers are delivered. The promises made in the business to the customers will be achieved by key partners. Green Wave Cafe will be having some key partners. They will be food suppliers, wine suppliers, interior designers, web developers, eco-friendly product suppliers and many more. Each one of them will be having different tasks to handle. Green Wave cafe cannot be started without the partners. Each of them will be having some unique quality which can be applied to the business for their betterment.

3.9 Cost Structure
The cost structure is known as the monetary cost of operating a business (Lewandowski, 2016). This will be including the amount of money that will be spent on key activities, resources and partnerships. The additional costs will be handled by the business itself. A monetary value must be placed on the time as a cost. Apart from all this, there will be some cost set for the opportunity of the business in future. While evaluating business canvas model in the case of Green Wave Cafe, there will be some extra costs because it is an eco-friendly cafe. Cost structure will be having employee salary, electricity bills of the cafe, local lease and salary to the chefs. There will be the cost of basic services and interior decoration of the place. The cost structure is not that small. Green Wave cafe will have to concentrate on what should be done on the overall cost structure.

4. Viability
Financial viability is also an essential aspect like business canvas model that is measured by their long-term survivals and ability for sustaining the profit over some period of time (Fowler, 2016). There are times when the business is losing its profitability and it becomes too difficult to cover. Viability is linked mainly to profit. However, it is liquidity and solvency both. This is quite essential for the business because of the decision taken for financial viability helps in finding whether the business is successful or not. The above business idea obtained in the study of business canvas model is financially viable because customers are moving towards eco-friendly products and services. It also helps in ensuring that profitability is achieved by the company. The financial viability of Green Wave cafe will be looked by the balance sheet and generating a great flow of cash. The business idea was viable by an estimation of expenses and revenue was made. A strategic survey was done within the company. This will be useful in determining the needs of the employees. Given below is a financial projection of three years for Green Wave Cafe.

As per the analysis on business canvas model, organisational viability helps in determining the trust of the customers in the cafe. It helps in managing the goals and missions of the companies. It also looks after the culture of the company, real-time feedback and some control and lastly debriefing. The success factor can be achieved by this viability. Green Wave cafe’s business model is quite impressive. It shows that employees are coordination with organisational policies and goals. Investments can be done in this business. All the aspects were examined properly. The overall business plan is solid and their Green concept will be appreciated.

5. Conclusion
This report is properly focusing on the business canvas model. A brief introduction was given. It mainly explained the basic concept of business canvas model. Then the business idea was provided. The name of the company is Green Wave Cafe. They are planning to use eco-friendly products and activities for the operation of their cafe. An analysis of the nine segments of the business canvas model was done. The customers were targeted, resources were seen and activities were decided. The financial and organisational viability was explained in details. The idea of this business was quite innovative and hence investors should be done.

Reference List
Antikainen, M., & Valkokari, K. (2016). Business canvas model A framework for sustainable circular business model innovation. Technology Innovation Management Review, 6(7).

Bertels, H. M., Koen, P. A., & Elsum, I. (2015). Business models outside the core: Lessons learned from success and failure. Research-Technology Management, 58(2), 20-29.

Fowler, A. (2016). Non-governmental development organisations’ sustainability, partnership, and resourcing: futuristic reflections on a problematic trialogue. Development in Practice, 26(5), 569-579.

Ghoniem, A., & Maddah, B. (2015). Integrated retail decisions with multiple selling periods and customer segments: optimization and insights. Business canvas model Omega, 55, 38-52.

Jackson, W. T., Scott, D. J., & Schwagler, N. (2015). Using the business model canvas as a methods approach to teaching entrepreneurial finance. Journal of Entrepreneurship Education, 18(2), 99.

Lewandowski, M. (2016). Designing the business models for circular economy—Towards the conceptual framework. Sustainability, 8(1), 43.

Nykamp, M. (2019). The Customer Differential The Complete Guide to Implementing Customer Relationship Management. American Management Association.

Payne, A., Frow, P., & Eggert, A. (2017). The customer value proposition: evolution, development, and application in marketing. Journal of the Academy of Marketing Science, 45(4), 467-489.

Southafricanmi.com. (2019). Business canvas model Retrieved from: https://www.southafricanmi.com/south-africas-food-and-beverages-sector.html

Appendix: Business Canvas Model

Figure 1: Business Canvas Model
(Source: Self Developed)