Idea Generation & Business Model Canvas Development of Vegan Shampoo

Question

Task: Your task is to prepare a detailed report on business model canvas for an innovative product.

Answer

Introduction
This report is about idea generation and business model canvas development of an innovative business. In this manner, new business idea of vegan shampoo is selected. Innovation is the key of success for any business. It is analyzed that individuals are becoming more aware about the health and environment so they deny purchasing shampoo having chemical and animal ingredients. This business idea has high possibility to earn high revenue in future. By generating business model canvas, the aim of this report is to understand the potential and success aspect of this new product.

Customer / Market problem
The term ‘vegan’ means the product used by the customers is completely free from the animal ingredients. In current time, customers are becoming more environment and animal friendly. They are not purchasing such products in which the animal ingredients and chemicals are added. They are looking for such skin care and hair care products which are free from all the chemicals and any man-made additives (Cole, 2018). Many popular brands have very harmful ingredients which are the cause of not only dryness and split ends but also harmful for the environment also. The use of vegan shampoo improves the health of hair without harming the environment. It is crucial to ensure that the shampoo is developed with no animal testing (Petal Fresh, 2020).

Benefits of business idea
This business idea would be helpful for the company as people are becoming more conscious for the environment. This would be beneficial in attracting large customer base who want to purchase environment friendly products. Vegan shampoo would not have harsh ingredients which is good for not only adults but also for children who are more susceptible to these dangerous ingredients. Vegan shampoo developed by the company would include organic and natural ingredients. Popular shampoos contain sodium sulphates, parabens, and harmful silicones which can be the cause of itchy and dry scalp. Vegan shampoo would include natural ingredients and scents such as aloe, jojoba oil, argan oil and clays along with nourishing vitamins to give essential moisture to hair. This business idea has much potential to gain more profit in future (Shampootree.com. 2020).

Business model canvas
Key activities-In the production activities, the company would sell the shampoo in three ways i.e. in-store, online, and door to door. It means, the company would offer options to the consumers to purchase vegan shampoo in different ways. Along with this, an ecommerce website will be created for the consumers so that they can research about the business information and new offers. For providing professional customer services, effective customer relationship platform would be created so that they can get quick solution to their problems. The company would create a professional team to provide solutions and information to the potential consumers. In the supply chain activities, the brand manager would be accountable to hire employees and manage the stock for the business (Schaltegger, Hansen and Lüdeke-Freund, 2016).

Key partners-Consumers looking for vegan shampoo on demand would be the key partner for company. Moreover, suppliers of vegan products and delivery persons of products would also be main partners in the business. The reason is that they would be presented as full-time or part-time personnel to earn some additional capital.

Key resources-In the business, there would be four types of key resources to manage the business in effective manner. One of the key resources in the business is financial resources as the objective of the financial resources is to raise money for future. The company will focus on financial planning to enhance the sales revenue. In order to make the payment process easy for consumers and earn profitability, the company would create payment ways i.e. online payment and credit payment. By reducing production costs, the company would also be able to save money for business (Burns, 2014). Second valuable resource is physical resource in which the company would ensure about the safety of the products so that consumers can get benefit from purchasing the vegan shampoo. Further, the company would provide door to door service to deliver the products to the customers. Third is intellectual resource which includes patent and people. In the patents, the company would create the lists of customers, products and services. Forth and last resource is human resource. The company would create various business positions like engineers, developers and managers.

Value proposition-The Company would offer chemical-free vegan shampoo to the consumers. In order to provide value, the company would give demo of the product to the customers at the same place and the same time. This would give advantage to the customers in terms of convenience and time saving. Along with this, some professional opinion to the customers related to shampoo and hair health. Furthermore, the company would develop a website to provide important information related to products and services. With the online and door-to-door services, customers would be able to purchase the shampoo everywhere and every time (Makanyeza, 2015).

Key channels- Various online channels and platforms would be used to promote the product i.e. vegan shampoo. Official website and social media platforms like Youtube, FaceBook and Instagram would be helpful for the organization to connect with the customers easily. Some of effective discounts and offers would be provided to the customers to make them loyal. Stores in different areas would also be an effective channel to attract large number of customers.

Customer relationship-Forsustaining relationship with the customers, individualsupport would be very helpful strategy. Some of the effective practices like greeting visitors, enquires, request, make appointments for customers and face to face meeting through online platform would make the customers feel like VIP. Along with this, product managers would be appointed in various departments so that clear information about the product can be given to the customers to enhance the revenue. Through internet, company would try to provide self service to the customers i.e. they can do research and select the variants of shampoo in terms of size and volume. This would be helpful for the customers to compare the products with other rivals in the market (Mason, 2015).

Segmentation-The segmentation would be done in the new business on the basis of geographic area like metro cities, metropolitan and suburban areas. Along with this, psychographic segmentation would be done to attract the customers as they are more focused on the chemical-free products. Along with this, managers would identify the buying behaviour and habits of the consumers for promoting the products. So, the company would create an effective and cost-efficient marketing to promote the products.

Cost structure-For managing the business effectively, various costs would be associated. The evaluation of entire cost would be revealed in the financial statement of the company. These costs would include development cost, promotional costs, maintenance costs, salaries and domain (Dudin, 2015).

Revenue- For generating more revenue, the company would adopt some innovative ways like advertising, commission and additional prices for delivery at the doorstep. Shampoo would also be promoted in big beauty salons to earn more profit. This would create sales lead as salons have to pay to the company on each package of shampoo.

Key interrelationship
Operation and finance- In the business, finance is required to manage various operations. Finance department set a defined budget to operate the business activities in proper manner.

Finance and marketing- Various promotional activities require funding so that the product can be popular among the customers. Finance department allocates fund to operate the marketing activities properly.

Marketing and operations- Marketing and promotional activities are the key of successful business operations. Based on the projections, marketing team is able to supervise all the business operations efficiently (Kim and Min, 2015).

Critical success factor
Market requirements-The approach to develop vegan shampoo is quite innovative business. This can be beneficial in future as the awareness about harmful chemicals and animal ingredients is increasing continuously among the customers. People in present time are becoming more aware about the environment also which would be a big success factor for company.

Competitive advantage- The competitive advantage would be increased by ensuring that vegan shampoo is similar as other shampoo in terms of benefits and hair care. As compared to other chemical shampoos, the business of vegan shampoo would be able to competitive advantage among the customers (Liu and Atuahene-Gima, 2018).

Risk and assumption
Financial risk- At the initial level, the company can face the shortage of finance and funding. The scarcity of money can create high-level risk while operating the business in terms of supply chain activities, promotional activities and marketing tactics.

Supply chain risk- There can be the risk related to supply chain risk while developing vegan shampoo. Transporting natural products and keeping them safe can also be one of the big challenges for the company.

Feasibility
The feasibility of business idea would be examinedon the basis of different issues which can be faced by the company in future. Those issues can be industry-related, founder-related, finance-related, and consumer-related. On the basis of the survey, it is analyzed that the business idea has high-levelpossibility to earn profit in future. The target market is identified in proper manner so consumers have high potential in the business. Founder has moderate probability as the founder is new in this business and industry. Overall, this business idea has high potential to gain revenue in future.

Conclusion
On the basis ofoverall discussion, it is observed that many popular brands have very harmful ingredients which are the cause of not only dryness and split ends but also harmful for the environment also. Be selling vegan shampoo, company would try to gain competitive advantage over the rivals in the operating market. Further, the company would give proper training to the employees to enhance the sales skills and abilities. . In order to make the payment process easy for consumers and earn profitability, the company would create payment ways i.e. online payment and credit payment.

References
Burns, P. (2014). New venture creation: a framework for entrepreneurial start-ups. USA: Palgrave Macmillan.

Cole, V. (2018).Why Use Vegan Shampoo for Your Hair Care. Retrieved from https://www.teadorabeauty.com/blogs/all/why-use-vegan-shampoo-for-your-hair-care

Dudin, M. N. (2015).The Innovative Business Model Canvas in the System of Effective Budgeting: Asian Social Science. 11 (7). 290-296

Kim, S. and Min, S. (2015). Business Model Innovation Performance: When does Adding a New Business Model Benefit an Incumbent. Strategic Entrepreneurship Journal.9(1).pp.34-57. Liu, W. and Atuahene-Gima, K., 2018.Enhancing product innovation performance in a dysfunctional competitive environment.The roles of competitive strategies and market-based assets. Industrial Marketing Management, 73, pp.7-20.

Makanyeza, C. (2015). Consumer Awareness, Ethnocentrism and Loyalty: An Integrative Model. Journal of International Consumer Marketing.27(2).pp.167-183.

Mason, H. (2015). Trend-Driven Innovation: Beat Accelerating Customer Expectations. John Wiley & Sons

Petal Fresh, (2020).Top Benefits of Using Vegan Shampoo. Retrieved from https://petalfresh.com/top-benefits-of-using-vegan-shampoo/

Schaltegger, S., Hansen, E.G. and Lüdeke-Freund, F., (2016). Business models for sustainability: Origins, present research, and future avenues.

Shampootree.com. (2020).7 Incredible Things To Know About Vegan Shampoo Products. Retrieved from https://www.shampootree.com/7-incredible-things-to-know-about-vegan-shampoo-products/

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