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Transcript of PBA- LICENTA
Zealand Institute of Business and Technology, campus Roskilde
‘’Up cycling to a better future’’
Developing a strategy for internalization and
increasing revenue
By Trandafir Dimache Daniel
Date: 16.12.2016
Field of study: Bachelor Thesis
Guidance professor: Thoger Cathersen
Characters:82 936
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Table of Contents
INTRODUCTION ..................................................................................................................................................... 4
PURPOSE OF THE PAPER ................................................................................................................................................... 4
PROBLEM FORMULATION AND SUB QUESTIONS ..................................................................................................................... 5
METHODOLOGY ............................................................................................................................................................. 5
RELIABILITY AND VALIDITY ................................................................................................................................................ 6
LIMITATIONS ................................................................................................................................................................. 6
COMPANY BACKGROUND ................................................................................................................................................. 7
Products and services ............................................................................................................................................ 7
Mission and vision ................................................................................................................................................. 8
Vision: ................................................................................................................................................................... 9
Organizational background and core competencies ............................................................................................. 9
Core competencies .............................................................................................................................................. 10
THEORETICAL BACKGROUND ........................................................................................................................................... 10
First part .............................................................................................................................................................. 10
Second part ......................................................................................................................................................... 10
Third part ............................................................................................................................................................ 11
INTERNAL ANALYSIS OF ABOUT INNOVATION ..................................................................................................... 12
VALUE CHAIN ANALYSIS ................................................................................................................................................. 12
Inbound ............................................................................................................................................................... 12
Operations .......................................................................................................................................................... 12
Marketing communications and sales ................................................................................................................ 13
Secondary activities ............................................................................................................................................ 13
THE BUSINESS MODEL OF ABOUT INNOVATION AT THE MOMENT ........................................................................................... 14
Value proposition ................................................................................................................................................ 14
Customer segments ............................................................................................................................................ 15
Channels .............................................................................................................................................................. 15
Customer relationships ....................................................................................................................................... 15
Revenue streams ................................................................................................................................................. 15
Key resources ...................................................................................................................................................... 16
Key activities ....................................................................................................................................................... 16
Key partnership ................................................................................................................................................... 16
Cost structure ...................................................................................................................................................... 16
COMPETITIVE STRATEGY ................................................................................................................................................ 16
EXTERNAL ANALYSIS ............................................................................................................................................ 17
PESTLE ..................................................................................................................................................................... 17
Political and Legal factors ................................................................................................................................... 17
Economic factors ................................................................................................................................................. 18
Social factors ....................................................................................................................................................... 19
Technological factors .......................................................................................................................................... 20
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PORTE 5 FORCES .......................................................................................................................................................... 20
Supplier power .................................................................................................................................................... 20
Buyer power ........................................................................................................................................................ 20
Treat of substitutes ............................................................................................................................................. 20
Threat of new entry............................................................................................................................................. 21
COMPETITOR ANALYSIS FOR THE DANISH AND THE SWEDISH MARKET ..................................................................................... 21
Competitor analysis for CanAltRedesign and Recreatedesign. ........................................................................... 22
BENCHMARKING .......................................................................................................................................................... 25
Key features of About Innovation ....................................................................................................................... 25
How About Innovation will be able to support their key features on the future................................................. 25
SWOT ....................................................................................................................................................................... 26
Strengths and weaknesses of About Innovation ................................................................................................. 26
Treats and opportunities ..................................................................................................................................... 27
PART CONCLUSION FOR THE EXTERNAL ANALYSIS ................................................................................................................. 27
IMPLEMENTATION PLAN ..................................................................................................................................... 27
ANSOFF GROWTH MATRIX ............................................................................................................................................. 28
INTERNALIZATION STRATEGY ........................................................................................................................................... 29
Stay at home and Born Global –two step strategy ............................................................................................. 29
BLUE OCEAN STRATEGY ................................................................................................................................................. 30
Strategy canvas ................................................................................................................................................... 30
Four action framework ....................................................................................................................................... 30
BUSINESS MODEL TO BE ................................................................................................................................................. 30
Value proposition ................................................................................................................................................ 31
Customer segments ............................................................................................................................................ 32
Customer relationships ....................................................................................................................................... 32
Channels .............................................................................................................................................................. 32
Revenue streams ................................................................................................................................................. 33
Key resources ...................................................................................................................................................... 33
Key activities ....................................................................................................................................................... 33
Key partners ........................................................................................................................................................ 33
Cost structure ...................................................................................................................................................... 33
BUDGET ..................................................................................................................................................................... 33
MARKETING PLAN ........................................................................................................................................................ 35
Advertising .......................................................................................................................................................... 36
Public relations .................................................................................................................................................... 36
Lead conversion .................................................................................................................................................. 37
Sales forecast ...................................................................................................................................................... 37
Budget for the marketing plan ............................................................................................................................ 37
Key performance indicators for the marketing program .................................................................................... 37
MARKETING MIX .......................................................................................................................................................... 37
Product ................................................................................................................................................................ 37
Price .................................................................................................................................................................... 38
Place .................................................................................................................................................................... 38
Promotion ........................................................................................................................................................... 39
SALES STRATEGY ........................................................................................................................................................... 39
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Tasks ................................................................................................................................................................... 39
CUSTOMER RELATIONSHIP MANAGEMENT ......................................................................................................................... 39
BALANCE SCORECARD .................................................................................................................................................... 40
The financial perspective .................................................................................................................................... 40
Customer perspective .......................................................................................................................................... 40
Internal perspective ............................................................................................................................................ 40
Learning and growth ........................................................................................................................................... 40
FINAL CONCLUSIONS ........................................................................................................................................... 41
REFERENCE LIST ................................................................................................................................................... 43
APPENDIX ............................................................................................................................................................ 43
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Introduction
Purpose of the paper
This paper is meant to be a representation of my abilities to apply the theoretical knowledge that had
been acquired during the study program. Having an internship presents a great opportunity for me to
apply the theories and models into the real life situation and subsequently understand what it is
different. Writing this paper also allowed me to understand the company from a different perspective,
fact that it is valuable for me and also valuable for the management of About Innovation.
My main goal with my research was to make the company more competitive in the market so that they
can generate some revenue. Having analyzed the company and spending three months working with the
team gave me an understanding of what is it that they are aiming at, their vision for the future and it
made me believe that a concept like theirs based on sustainability and environmental concern can be
valuable for this world. I also comprised what is that the company is good at and what is there to be
improved and after balancing the two I arrived to the conclusion that the company is capable of growth.
I went further and seek opportunities from the outer environment to better understand the position
that the company has within the market and the industry itself.
Not everything comprised in the research is fixed or countable; many suggestions are hypothesis, such
as the development of a new market in the blue ocean strategy. The plan was to show that in theory it is
possible to develop new markets with less competition.
Nonetheless, an important factor was to be clearer about the services and the potential customers so
that the company will know what to improve to reach their needs and pains. I had to reorganize the
business model for the future competitiveness and in this way I managed to uncover better value
propositions and customer profiles.
Because About Innovation is a startup and they do things by instinct most of the times, I have tried to
put down some objectives so that it is easier to reach their main goal, also I presented some
measurements for the objectives that could be tracked every month or week and are not very time
consuming. Some of the objectives might seem unrelated or the measurements are not very accurate,
but it is normal, as it is up to the management of the company to change them to more appropriate
ones due to the time and resources at their disposal.
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Problem formulation and sub questions The problem formulation is being set up with the coordination of the supervising teacher, the problem
formulation should be achievable and also it was based on what the company needs more at the
moment, which is capital. As a startup, the company is in development and the need for investment is
considerable, therefore a plan for gaining more revenue on the future had been based on the expansion
to the Swedish market. The problem formulation is:
‘What does About Innovation need in order to achieve a revenue growth of 20 000 Dkk for the following
year on the Danish market and what is the strategy for expansion on the Swedish market?
The problem formulation will be dividing into sub questions so that we can outline what are the needed
analysis and theories to reach to a solution for the problem formulation.
Is the structure of the organization able to manage the resources the company has in order to support a
market penetration strategy on the Danish market?
What will influence the development of the company from the external environment, what are the
opportunities?
Who else is selling on the Danish and the Swedish market?
Does the company need to improve the business model to be able to compete?
How can the company communicate and sale over the competition in both markets?
Methodology In this paper I have used the qualitative type of approach to uncover what are the needs and pains when
companies need their employees to work with creativity and innovation, in the same way how school
teachers as for example the ones from ZIBAT manage to communicate the theories and model to the
students and if the students are involved in the learning process. Furthermore I wanted to find out if
they will be willing to implement a third party service to allow both the students and the teachers to
practically learn and teach sustainability, creativity and Innovation by using the framework of a
workshop. The interview comprised open questions so that a broader understanding can be assessed
and it served also as an opportunity to probe my assumptions. Due to the fact that the teachers did not
participate in the study, the research could not be conducted and assumptions had to be created based
on the observations from the class. This research was meant to help me understand how to better plan
the value propositions for the creativity and innovation workshops About Innovation is offering.
Analyzing the theories and models that I have been taught, and combining them with the observations I
have collected while being in my internship from the team and also from what I have seen, I have used
deductive approach to be able to outline what is the development of the company internally.
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Moving on the external environment, I have search for appropriate data so that I could asses an outlook
of the country, PESTLE, the industry and the competitors. The type of data was secondary data complied
into databases such as Worldbank or Danmark statistics, articles and discussion on forums.
Lastly, I used inductive approach to formulate the strategies for the marketing and sales. My
observations over the outer medium and the internal have brought me to create a new business model
for the company and a balance scorecard to follow their objectives.
Reliability and validity The reliability of the sources I have used while building the theoretical background of the paper have
been comprised into textbooks, some of them have been studied in school. Given this fact we can say
that the reliability of this part of the paper is high. Naturally, for the born global perspective there is a
criticism in what concerns the applicability of the strategy, it states that the company should have a high
capital and a large network to successfully implement the strategy. Another criticism is that the business
model canvas does not take into considerations the external environment, or in other words the
presence of competition.
Among the references I have used to gather data and analyze and further create the marketing and sales
strategies are being comprised the competitor’s websites. The websites reliability it is nit to be fully
trusted as it can be a marketing strategy to appear appealing to the customers and in the same way the
information structured can be different from what they actually can deliver.
The internal validity it is to be trusted, the information is first hand collected and the theories and
models are being acknowledged in textbooks in the class and onside.
For the external validity, if we weight both the official websites, academic articles and books used, with
the other sources such as databases and the competitor’s websites I could say that we have a limited
level of validity.
Limitations One of the limitations was the time constraints; I consider that more hypotheses could have been
further tested by conducting qualitative research with companies to find out the specific needs and
pains they encounter when designing their locations. Subsequently, a better approach and solutions
could have been addressed.
Another limitation is the choice of theories, with the balance scorecard I have managed to bring a visual
representation of the objectives and the implications as in what concerns the time invested to make
them happen. I chose to leave out another important model that could have helped as well to
understand the distribution of the costs, ABC costing.
Given the fact that the up cycling market is not yet a mature market and there are not so many
information on the practices within the market and also the customers are not well known, what have
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been discovered and interpreted in the customer segments comprised the business model it is a
representations of what it seems rational to me and it needs to be further investigated.
In the problem formulation I have proposed that the company should also pursue a internalization
strategy for Sweden. My research has been focused more on understanding and attaining customers on
the Danish market and less for the Swedish one.
In the internalization strategy I suggested a two-step internalization strategy. Born global and stay at,
but in order for the company to actually realize a born global strategy many resources would be needed,
more than the ones the company can get by staying at home. In the meantime the industry will develop
more and stronger competitors can pursue the strategy.
Company background About Innovation it is a concept that had been envisioned by a Danish teacher and entrepreneur. The
core of the concept is to reuse discarded materials that can be from wood, textiles, plastic, and anything
that can be up cycled.
The waste empire it is in the making has two dimensions at the base, designing up cycled products and
circular economy. As the idea of recycling is not new, other people that heard of About Innovation
wanted to join, there was the moment when Green Design Base joined and a team got created. Green
design base is comprised of two persons, both sharing passion for wood crafts so from there it all
started the manufacturing of products.
I have been the third person that joined the team at that time and I created a series of videos for the
promotion of the company and uploaded them on YouTube.
Their head office can be found at INSP, where many people are willing to learn new skill, so by
conducting a set of meetings more people seems interested in the ideas that we were sharing and
joined as well. Their skills varied from textiles, to nudging and to online communications. The company
has a varied set of skills and it is growing to become more homogenous.
The company officially had been registered in October 2016 as a enkeltmandsvirksomehed , which
stands for privately owned company where there is only one owner that is fully liable for everything that
happens with the company and fully entitled to what the company has, despite the fact that at the
present time the company is not generating very little sales.
The team at the moment is showing great intentions and the people around are acknowledging their
efforts and supports them as well financially. One of the company goals is to establish their own venue
and start production.
What I am going to work with in regards to the development of the company is to see how the company
can become more competitive and start earning money.
Products and services
So far the company managed to create benches, pillows, apple boxes and organize workshops.
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The products made are made fully from recycled materials, mostly coming from the Roskilde Festival
waste.
Benches: made from oak planks that are more than 100 years old, these benches are simple as design
and can hold the time test for more than 400 year.
Pillows: made from the old pillows and blankets from the festival, these pillows re innovative as design
due to the distinctive shape that can hold the back of the user in an ergonomic way and it also can serve
more functions, as for example when a person is reading or writing on their computer.
Apple boxes: main material used was wood from recycled pallets, simple as design, these boxed draw
the attention of a local apple juice supplier that purchased a bunch of them.
Workshops: Mainly, the workshops were designed to bring more recognition of the intentions that
About Innovation has and receive direct feedback from the public. The events have the intentioned
results and even more, the last event organized brought the team monetary benefits as well besides the
promotion. It seems that the potential of these workshops can be enlarged and further explored.
All the products made are unique due to the different resources are being gathered. It will be therefore
more difficult for the company to conduct activities such as design, produce functional products nut just
prototypes, advertise and sell due to the uniqueness of the products. Another way that can be less time-
consuming and maybe more profitable could be the creation of projects for restaurants and cafes.
Mission and vision
Mission statement should be covering three main areas of importance, as for example what is it that the
company does in regards to its customers.
About Innovations is putting great effort in creating unique design that can surprise the customer and
make them feel and understand that waste can be beautiful and in the same way useful.
Second, mission statement has to comprise the relation that it has with its employees. Given the fact
that the employees are the ones that are creating the value for the customers, it is equally important
that the relation between them and the management it is showing opportunities for growth and
possibility of expressing themselves in a creative and innovative environment.
The third and last highlights what is that the employees do that it is valued by the customers and brings
revenue and recognition for the owner.
This is the mission statement that About Innovation has:
‘’Our missions is to invest our creativity in how to reuse and reshape the waste culture. ‘’
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Vision:
Given the last progress that the company had in the previous competitions and the meeting that they
had with the municipality, it seems that the vision of the company is sound and reliable for future
growth of the concept of recycling and global waste culture. There is still work to be done in what
concerns the company’s ability to bring the vision to the world in a way that is understood and
supported.
The management envisions a world where the waste is treated as primary resource. With the help of
innovation and creativity these resources can be manufactured and transformed into meaningful
objects once again. The concept is rooted into the desire to reduce waste globally and reduce the need
for new raw materials on the long run. They support the concept of circular economy and believe it
could be applied worldwide and it will benefit many people, industries, and the environment itself.
Organizational background and core competencies
The organization is constantly expanding and acquiring new people that are willing to use their creative
minds to make something meaningful for the world around. The company will continue expanding until
the right combination of skills, knowledge and execution is met .
The present formation is being composed by Zenja Jorgensen. She is the owner of the company and the
founder of the concept described earlier in the vision. Zenja is a teacher and in her spare time an
entrepreneur. Her skills are to create a powerful network and manage the events and PR.
About Innovation started with three members, two of them having their own project called Green
Design Base. Sanne Noer is one of the founders of GDB . Sanne is a wood creator and is also doing the
prototyping for the products alongside Henrick Christensen. Henrick is an enthusiast and has the
knowhow of the manufacturing processes, during the events he is helping with supplying the needed
materials.
The following are Theresa Olsen that is taking care of the online communications, the structure of the
company, compiling and registering the company’s data into database, creating advertising content and
helping in the everyday activities.
Rosen Lozev it is a Bulgarian recycling enthusiast that managed to raise attention from the public on the
effects of cigarette buds over the environment. He finished his education at RUC University with a
degree in Environmental Planning. Rosen is also the founder of Keep RUC Clean1.
Daniel Trandafir it is a student at ZIBAT currently finishing his PBA in sales and marketing. He worked
before with bike events in Roskilde called Tour D’Night .He helped with the creation of videos for the
woodwork shop and other promotional videos and posters and made a YouTube channel to make them
known to the public. He also has helped with the negotiation of a project with one of the local
restaurants and with the building of the team by creating a teambuilding exercise2.
1 https://www.facebook.com/pg/KeepRucClean/about/?ref=page_internal 12.12.2016
2 https://www.facebook.com/1Humblemind/
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Core competencies
The team that I have described above in the organizational structure has a unique set of skills that
allows the company to perform the following actions:
To develop unique creative workshops
To develop new products and develop new ways to reuse materials
Can find the needed people to increase the success of the business
Theoretical background In the theoretical background I will show the models and theories that will allow the company to
internalize and to be able to compete and subsequently generate revenue.
First part: Naturally, we start with an emphasis on the first part of the paper where we are conducting
the internal analysis. It is important to understand how is the company is able to bring value to its
customers, that is why it is useful to understand the composition of the value chain. For any company,
the values proposed needs to be further transferred to the customers; the value chain model itself does
not allow us to understand how the customers will get to benefit from our goods and services that is
why Business Model Canvas becomes useful. With the business model canvas we are able to display the
relations between the value proposition discovered earlier and the network with the customers,
partners, costs and revenue.
If it is possible to compete through a strong value chain and business model you can also compete
having a strategy. We can assess what is the strategy of the company for the present time according to
Michael Porter and his competitive strategy model. The model will allow us to understand what are the
risks with every strategy are and when it is the right time to use any of them according to the external
factors that are influencing the performance of the company.
Second part: the second part is focused on the gathering of the right information for executing a
efficient internalization strategy, Given the fact that globalization lf enterprises is becoming a large
phenomenon every company nowadays should have in mind their opportunities and treats.
The internalization starts with assessing what is the right country to expand to. The most appropriate
countries are the ones that are as closest as possible to the culture, political environment and
nonetheless the economy within that country.
For that reason PESTLE is a good model to help us analyze the potential treats and opportunities of the
political situation, the economy of the country, legal, social and technological.
The economic factor from pest is being comprised by the overall performance of the industries within
the country, for that reason Porter developed the model Porter 5 forces. With this model we are able to
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understand the rivalry in the market. Rivalry can be also understood if we look at the competition itself
as well.
To better weight the success of the internalization we will also have to keep count of the competition,
both in Denmark and on the foreign market. For that purpose, a competitor analysis of the companies
that offers similar services and products will come in handy. We can analyze the competition by looking
at their target market, the competitive advantage and partly the marketing mix each of them has.
With the competitor analysis we look at each competitor individually with no relation to About
Innovation that is why we need conduct a competitor benchmark so we will combine the information.
With the benchmark we compare two or more competitors with About Innovation with the scope of
finding out what are the competitive advantages of About Innovation. Competitive advantages are listed
as key features and only the ones that help the company position themselves ahead of these
competitors will be further pursued. By conducting the above mentioned models we can comprise a
SWOT where we will note the strengths, weaknesses, threats and opportunities fact that will allow us to
be clear of what assists the company in their development and what obstacles must be overcome or
minimized in order to achieve the desired results.
Third part: So far we should have enough information from both mediums to be able to set a growth
strategy. As we mentioned earlier, the rivalry is important for growth and with Ansoff Growth matrix we
are able to find the appropriate strategy to grow and keep a stable position within the market.
The internalization strategy starts with the will to earn more and according to the 9 strategic window
models for internalization; the most profitable model is born global. The model has downsizes, the
company needs to hold a strong network, for two reasons, one is capital and the second is the right
people to foster a fast expansion that can also be simultaneously. For this reason I have chosen to
complement the born global with another model, stay at home. Due to the fact that About Innovation it
is a startup and they need to understand better their customers and define their offerings. Also during
this time the company can find the right network for implementing the born global approach.
When pursuing a born global approach, it is important that the company is aligned with their products
and services to a low treat of rivalry. Blue ocean strategy has been designed exactly for the purpose of
helping companies to find new markets that lack competition.
By compiling the information from the competitors, benchmark, internalization strategy and Blue Ocean
we see that we have to reshape the business model canvas so that About Innovation is able to bring
improved value propositions tailored according to the direction that the company is heading to.
According to the problem formulation and the information gathered we will have to make plan to
communicate the new value proposition to the market, subsequently we will have to make a budget as
well to see what are the potential expenses and the income for the following years.
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For an appropriate follow up of the marketing plan, the balance scorecard model will be useful as it will
combine the goals and objectives set in the marketing plan and it will as well offer measurements to see
the progress of the objectives.
Internal analysis of About Innovation
Value chain analysis
With the value chain analysis we would be able to bring the concept ideas and the innovation
to life. Going through a series of steps, the ‘’value’’ of the products is being added and
subsequently it will be done so until it reaches the client or the user.
The primary activities that had been identified as primordial are the following: inbound,
operations, marketing communications and sales.
Inbound
Inbound is the first step in the making of the value chain for About Innovation. At this stage the
company is procuring the right ingredients for the upcoming productions and events materials.
As long as About Innovation is focused mainly on using discarded materials for their projects it
is more than essential to go and collect such materials. In this way, the board had been
scheduling different times in the year when the whole team is preparing for collection and
storage. As it happens every year, at Roskilde Festival, the amount of trash is generated by the
attendants is huge and the quality of the materials left behind is still reasonable and can be
reused. Therefore, About Innovation is creating dumpsters where people can recycle in a
different manner the tents, blankets, sleeping bags, and so forth.
The collection of resources can also be on the spot. If there is a viable idea for an event, for
example the ‘’bicycle flowers’’ (textile flowers made on the old bike wheels), people go and pick
the necessary goods.
Operations
In the operations stage, About Innovation is manufacturing the products. For that, the company
has a partnership with the nonprofit organization called INSP established in Roskilde. This
organization has access to a variety of materials and tools that can be used for free for the
people that are interested. Therefore, About Innovation can use the wood workshop where
they are manufacturing the different furniture merchandise. Keeping cost low is a must for
About Innovation, as they are at the beginning and financing is made out of donations or
personal spending, the company has received a storage room as well where the goods can wait
until they are being sold. About Innovation have operations in other places as well. Rosen
Lozev, one of the team members is manufacturing signs and laser cut labels for various needs in
13
one of the RUC laboratories. In the same way, Sanne Noer, had set up a small workshop In her
house for the manufacturing of the textiles. She is sewing pillows.
Marketing communications and sales
As every startup company that is in the incipient stage, this step involves the creation of a
marketing plan and making a sales strategy. So far the company had been building a series of
events to increase the appearance for the public and get more network prospects. In this way,
About Innovation had been organizing their company opening where friends and the people
interested in sustainability and recycling had been invited. At the event, every person from the
team held a speech where they presented their vision within the company borders to the rest
of the invites. Also they have set up a revenue scheme by selling support bonds. Each of the
bonds was valued of 200 kr. About Innovation went further with the events and created the
lamp event. The Danish Halloween national day was the day of the event so many people got
the chance to take a look at what was their intention and also got to see the creative minds at
work. The event place was the city square in Roskilde, so a populated area, and given the fact
that the Danish holyday was also a booster element it proved to be a good marketing initiative.
Although these activities were not aimed at creating sales, but more to increase the awareness
within the market, as a result the actions were recognized and praised by the Mayer of the city.
Secondary activities
The list or support activities are as it follows: human resource management, procurement, firm
infrastructure and technology development.
Of course the most relevant out of all of these is the human resource management.
Here About Innovation is constantly acquiring new volunteers and at the moment they are
looking for more interns from various fields, such as design, and for that the focus is heading
towards the design school from Copenhagen, KEA. One of the competitors got themselves an
intern from the same school and their design had improved significantly. The main source from
which About Innovation is getting the new volunteers is through the weekly meeting
‘’AffaldsImperiet’’ where they invite new people and present them the upcoming goals for the
usage of waste for the following months so then the people can see where they can offer their
help best.
Procurement is one important aspect that had been analyzed by the owner Zenja Jorgensen in
terms of acquiring new founds for the company. Given the possibilities for better recycling
systems, Zenja managed to get the Roskilde Municipality to found her project. With great
success, founds had been given to About Innovation and now the company will therefore build
their own venue.
14
Firm infrastructure is a hard topic to discuss looking from the perspective of a startup. The sales
are small and every other aspect within the company is unclear in terms of management,
accounting and financing. Recently, About Innovation decided to register their company to the
Danish Chamber of Commerce. The type of company is ‘’enkelmandsvirksomhed’’ which stands
for sole proprietorship, meaning that the only one owner is liable for everything and owns
everything.
The Business model of About Innovation at the moment
For assessing the current business model that the company is using I opted to go with the
Osterwalder business model canvas book. About Innovation is in the incipient stage of their
existence, therefore a viable business model was never created. The company had designed a
business plan and the rest of the activities were planned on the way, most of the strategies
being changed multiple times. Even though the most important blocks from the canvas model
are still indefinable and can be analyzed. A business model is never going to be the same as
time passes, the company will have to adapt to the target market ass the time to be able to
sustain a profitable business. After analyzing the documents from the company and having
discussions with the team I have managed to put together the following model.
Value proposition
The currents values that About Innovation is bringing to the customers are:
Unique products -each product it’s going to be different even if they are from the same model.
Working with recycled materials offers this possibility to each person to have their own unique
item.
Hand crafted – the customer knows that a certain person invested their time to manually make
that item and it becomes more personal.
Environmental friendly – A large majority of people are nowadays concerned of the global
warming and the effects of pollution and tend to care as much as they can.
Access to innovators network- people that see the work is being done and would like to bring
their own contribution to the waste reduction can become a member of About Innovation
,where a knowledgeable network of can nourish the ideas and make them real.
Make an impact on the waste culture- About Innovation is not only about recycling but also
about encouraging people to take a different perspective on what the societies can actually do
with the waste, is the perspective of an activist within waste culture.
15
Unique events and workshops -where the company is educating companies and schools about
sustainability and innovation
Customer segments
Customer segments by size: b2b- Startup, small companies and medium size, b2b-individual
customers
By location: Copenhagen, Roskilde.
With the above mentioned segments the company is able to direct their strategies for the
development of the concept and what they can do for these segments, but later when the
management will want to develop the company it is required a more detailed portraying of the
segments so that the marketing campaigns can be directed to the right customer segments.
Channels
The channels though witch the company and their customers can communicate are at the
moment formed by social media, , website, email, calls and meetings with the public.
Customer relationships
The relationship model that About Innovation is based on it’s the transactional one for the b2c,
where the customers and the seller are in for themselves. The transactional relation does not
focus on the customer retention, but more on designing, pricing and promoting an appealing
product to the customers.
Once the company is able to conduct better projects for the b2b and be able satisfy the
customer’s needs, a relational approach will be helpful and it will reduce the cost of acquisition.
Revenue streams
The revenue stream comes from sales of products, projects, and subscriptions for the
members.
16
Key resources
The most valuable is by far the human resources. As at the moment every activity is based on
the volunteers work and their skills and creativity is needed in every event or activity.
Key activities
Key activities are the regular events that are being organized throughout the city; these
activities are meant to bring more awareness to the people that About Innovation.
Other key activities are the product development where several prototypes are being made
before the actual final form is done and ready for production.
The last key activity is the weekly meeting where the agenda for the following week or more
will be presented. Here other people from outside the company can join and see how they can
contribute making out of this activity also a customer acquisition tool.
Key partnership
The key partner is INSP, established in Roskilde INSP had offered the company storage room
and access to the wood workshop as well as media workshop without any costs.
On the other side of the partnership About Innovation will have to help INSP with volunteering
work.
Cost structure
Fixed costs: the website and the hosting
Variable costs: gas for the transportation and other food expenses.
Most of the work and the materials are being used are being recycled and therefore only time is
used to gather these materials by volunteers.
About Innovation is still in its early stages and many costs structures will be there to follow
once their own venue will be established.
Competitive strategy
Michael Porter had brought to the corporatist market for the first time in 1985 the generic
strategy for competitiveness with adjustments on the way for a better applicability. The Porter’s
17
generic competitive strategy3 model is shaped by two vectors, one that shows the competitive
scope and on the other hand is the source of competitive advantage. In terms of what is About
Innovation’s competitive scope, we will have to further research the other external factors.
Anyway, by looking from the internal perspective of the company we can observe that the
target market is rather narrow, only local small and medium sized companies and up cycling
enthusiasts.
The competitive advantage that About Innovation is trying to achieve is being outlined as
differentiation strategy. With the differentiation strategy, the company is looking to create
more advantages for new customers, usually better qualitative and unique where the company
can ask for higher prices.
External analysis
PESTLE
Pestle is naturally a good analysis for a company to conduct as it represents a couple of
important aspects that can offer opportunities for the companies such as the change in VAT for
certain products and that will follow in a higher revenue, but on the other hand there can be
also threatening, as for example is Uber, the Danish Government is changing the regulation on
which the people can work for Uber and this might decrease significantly their income or can
even lose the market.
We will get to analyze the Danish and the Swedish countries.
Political and Legal factors
Only the indices what will directly have effect over the activity of About Innovation will be
discussed, such as the employee law, consumer law and import export law.
In Denmark and Sweden, the employee rights are being defended by the unions. Approximately
75 % of the labor market is a member of a union in Denmark. The unions are the ones that
establish that the rules for both the employers and the employees are being according to the
contract act and in regards to the civil law tradition4. If the employer fails to respect the binding
rules they are entitled to 13 week paid salary in Denmark.5 According to the annual leave act
1997:480 there are 25 vacation days per year in Sweden as In Denmark according to the holiday
employee act-chapter 2 -Holyday entitlement. 3 Competitive advantage : creating and sustaining superior performance : with a new introduction /Michael
E.Porter /ISBN :0-7432-6087-2 4 http://www.iclg.co.uk/practice-areas/employment-and-labour-law/employment-and-labour-law-
2016/sweden#chaptercontent1 29.11.2016 5 https://www.pwc.dk/da/human-ressource/assets/pwc-brochure-labour-law-web.pdf- the employee contract act
and the Danish union system. 29.11.2016
18
Consumer act in Denmark states that companies cannot contact by any means customers with
the purpose of selling them anything without them agreeing upon it6. The same statement can
be found in the Swedish consumer act 7 as part of the European Union Ombudsman practices.
Import and export is being largely supported and encouraged by the two countries. Although
there are still burdens on how to transfer capital due to the currency difference it seems that a
fair amount of 7 %8 of goods are being exported and imported between the two.
With the Oresund committee serving as an innovation hub where green companies are being
supported for further cooperation with partners from Sweden and Denmark it seems that the
cross border cooperation will nourish healthier relations. The international competitiveness and
connectives of the regions is being enhanced by Kastrup Airport, it offers excellent links in both
directions. The committee activities are mainly financed by the Danish state Danish pension
fund and the EU infrastructure founds.
Taking a step backwards to observe what is the political infringement of the European Union
over the national playground and we can see that the European Commission had put together a
plan for what is called Circular economy 9 and its purpose is to bring a sustainability approach to
companies and to the overall process of production, consumption and disposal of the products.
The EU had put together also a program called INNEON10 that stands for network for eco
investment. The purpose of the program is to identify, support and coach eco-innovations
entrepreneurs, SEMs to reach investor readiness.
Economic factors
The GDP growth rate in Denmark for the last year is being slowly growing with a 0,4 % lower
than the previous year, specifically 2014 with 0,3%11.Unlike in Sweden where the GDP is higher
0,5 with only a small change since 2014 of 0,1%12. The country’s GDP shows what is the
financial viability of the country and how healthy is the economy overall. Given the fact that
Sweden has higher GDP is more likely that they are more willing to spend.
6
http://www.consumerombudsman.dk/~/media/Consumerombudsman/dco/Markedsfoeringsloven%20lbkg%202013.pdf 29.11.2016 7
http://www.consumerombudsman.dk/~/media/Consumerombudsman/dco/Markedsfoeringsloven%20lbkg%202013.pdf 29.11.2016 8 http://www.centreonconstitutionalchange.ac.uk/sites/default/files/papers/Spotlight%20on%20borders_Sweden-
Denmark_FINAL.pdf- page 3 29.11.2016 9 http://ec.europa.eu/environment/circular-economy/ 02.12.2016
10 http://ec.europa.eu/environment/circular-
economy/pdf/seminar/6%20INNEON%20presentation%20(Aitor%20Garro).pdf 02.12.2016 11
http://www.tradingeconomics.com/denmark/gdp 29.11.2016 12
http://www.tradingeconomics.com/sweden/gdp 29.11.2016
19
The Danish KR shows stability over the last fiscal year with a parity of 1, 31 Swedish kr for 1
Danish kr. The fluctuations of the currencies it is given by the lower exchange rate from 1
January 2016 that was of 1, 2413 SEK for 1 DKK.
According to the better life index OECD14 it seems that the household disposable income in
Denmark has an average of 189 355 DKK/year with a middle class of 60 % of the labor market.
On the contrary, in Sweden the household disposable income stands for 202 806 DKK/year
having similar middle class representations.
According to the reports from Statistics Denmark it seems that the unemployment rate in 2016
is raging between 4, 3% in July and 4, 2 % in late September. The unemployment rate had fell in
Sweden compared to the previous year from 6, 7 %15 to 6,3% , having at the moment 4933
persons employed. In what concerns the skilled employees, both in Denmark and Sweden there
is a high rate of literacy and with professional schools such as HX is easy to find skilled
employees.
Social factors
Denmark is a fairly small country and according to World bank database, the population is 5,6
mil. The social welfare in Denmark is free therefore it is likely that people can get better
education and become more skilled, Sweden has similar welfare system. Also it is known that
students that are about to finish the education program have to consider going to an internship
to complete their education.
The same internship infrastructure can be found also for the unemployed both in Denmark and
Sweden. The safety net for the unemployed it is assured by the unions they are being part of.
The job centers provide the people with courses and with opportunities to go for one month
internship in companies and get more skilled, with all the costs covered by the Danish
government.
Looking at the trends, and we can observe that the Danish and Swedish culture is having great
interest in recycling and waste reduction. A multitude of companies help mainly with the reuse
of carton, glass, and plastic. The reduction of waste is also encouraged by the pant system
where people that buy bottles already pay for the package extra 1, 1, 5, or 3 KR, this represents
interest for other people also.
On the other hand, in Denmark, especially Roskilde we can observe that the trend is in
contradiction. At the Roskilde Festival there are approximately 120 000 people attending and
the amount of trash left at the site after the event can be big. Organizations take care of the
13
https://www.tradingview.com/chart/?symbol=FX_IDC:DKKSEK 29.11.2016 14
http://www.oecdbetterlifeindex.org/countries/denmark/ 29.11.2016 15
http://www.tradingeconomics.com/sweden/unemployment-rate.29.11.2016
20
trash during the event and after but the selection of trash is not consistent. The trash can be
only used for burning.
Technological factors
It is common that the Danish Government is supporting the initiative that shows interest in
waste reuse. With a business plan and realistic vision people can get founded for their ideas.
Most certainly the present solutions for recycling are nonetheless efficient, with better
technologies; recycling plants can shred and select wood, iron with the help of magnets, and
plastic with air pulsations. For example for a tone of glass at a recycling plant can only have 25
grams of impurities.
Porte 5 Forces
To understand how to better compete within the market we first have to understand the
industry. Understanding the industry will further reduce the company’s uncertainty towards the
treats of suppliers, buyers, substitutes, rivalry and new entrants.
Supplier power
About Innovation had been relying on the resources they have collected from the Roskilde Festival from
2016 to conduct their events. The festival is an important supplier as they allow the company to take as
much trash as they want. The collected materials represent an important source of raw materials and if
the Festival will not allow the company to collect anymore they have to find alternatives. Fortunately, in
Roskilde there is a waste center where plenty of discarded materials such as household waste are being
delivered every year. In what concerns the wood is being used for the furniture, there are lots of
suppliers of pallets what are not wanted, such as pizzeria or schools.
The supplier power is medium.
Buyer power
The chances are that the products of About Innovation can be substituted as there are some other
providers on the market, some of them are even more skilled. Although they serve the same market, up
cycling and recycled products, they have slightly improved design. Within the events and workshops
market it is being known of other people having such events, for example ‘’remake Christmas’’ in
Copenhagen. The only difference is the geographical location; About Innovation is operating in Roskilde.
Buying power of the customers is being assessed as being medium.
Treat of substitutes
Substitutes for About Innovation are considered as the furniture producers, such as Bolia, Ikea, Jysk
which are specialized and can have a better offering. For the rest of the things that About Innovation can
offer, their creative workshops and the sustainability events, it is not quite sure who are the other
people competing with them except on person that is in Copenhagen.
21
If we look at the product substitute treat, then we have a high treat, but on the other side from the
events perspective is the treat is medium.
Threat of new entry
The recycling industry in Denmark is very developed. With outstanding methods on waste selection and
usage we therefore have the largest companies that work with the landfill recycling where complex
systems of recycling are being used. Carton, plastic, metal , glass is being reused into new products
where the rest of the materials go to the local power plants where they are being burned and the
energy is being used to heat water for the city.
The indicators for a high or low treat of new entry are being represented by the investment capital
required to start the business. In the case if About Innovation, the capital required to start the business
is low, they have not invested almost any money until the present time, we therefore can consider that
it is the same for the other companies willing to access the market. The technology it is not complex,
wood working machineries, saws and other common tools can be easily purchased by any company. In
what concerns the production materials, clearly there are few places from which the companies can get
the resources such as Roskilde festival, here they can get bulk materials, and also other individual
suppliers that are not hard to find.
Alternatively, the distribution channels present a burden when it comes to recycled materials, as long as
the materials and not being the same and therefore the products are unique, it is quite difficult for the
companies to get their products to distributors as they require standardized products.
Clearly the barriers of entry are not high and the treat of new entrants is high which means that the
market share can be easily minimized by the new comers and therefore the present market player have
to stay aware that they have to constantly change their competitiveness strategy.
Competitor analysis for the Danish and the Swedish market
In order to conclude the essentials about the competitors a competition analysis and benchmarking will
be conducted within the Swedish and Danish market.
The companies that are directly competing with About Innovation are the ones that are involved in up
cycling, or in other words reusing the old materials into new products. Such companies offer similar
product range such as chairs and pillows, also slightly different ones such as glass products.
For the Danish Market I have identified 2 main competitors: Bevar16 and CanAltRedesign17.
After having a look over their website, clearly we can see that Bevar is specialized in the manufacturing
of products such as bags, pillows and cushion chairs out of old denim. Their main target market is the
people that are enthusiastic about such products and are also a little price sensitive.
16
http://bevar.dk/ 30.11.2016 17
http://canaltredesign.dk/ 30.11.2016
22
On the other end we have CanAltRedesign, serving b2b and as well b2c. Their main activity is based on
using industrial leftovers from factories. With similar product as Bevar, CanAltRedesign is manufacturing
fashionable aprons for restaurants and for the b2c they create bags and clothing articles. They also have
an eye on design, as it is obvious their products are more fashioned.
Searching the web, mainly Google by typing key words, such as up cycling, workshop, recycling, I
identified two competitors within the up cycling market. The first one is named Recreatedesign18.This
competitor vision is to extend the lifespan of materials around. To put it differently, it means that
different projects can emerge once they find the right materials. So far they have created a range of
lamps and drawers and constantly they work with interior design as well as a project.
The last competitor is named Hauge Glas19 and they mainly produce new glass products such as cups,
and high wine glass. The materials used are old glass bottles, as for example Jonny walker of Corona.
Their offering consists of individual customers but also companies, as they can customize the glasses
with infused company logos or hand graving for a more expensive product.
After the initial description of the above competitors, I have reached a conclusion that only two of the
competitors both in Denmark and Sweden are worth comparing to as they are the closest to the activity,
products of About Innovation. The first one that is established in Denmark is CanAltRedesign and they
are more fashionable, therefore more skilled and serve the same type of customers, also they have
access to more resources from the industrial sites.
Competitor analysis for CanAltRedesign and Recreatedesign.
Competitor analysis for CanAltRedesign
- Profile of the competitor20
- humanitarian profile: helping unemployed to get more skills
- focused on CSR
- creating unique products handmade
- open to crowed founding
- Collaborates with Berendsen Textile in Holbaek and Vig festival.
- Colaborates with KEA for product deisgn
- Sells both to the b2b and the b2c
- Headquarter in Nykoebing
Competitive advantage of the company
Having the fact that partners such as Berendsen offers them raw materials is important as the company
do not have to search for these materials which is time-consuming and also the type of materials found
might not be the same. Having a stable inbound of colors also makes it easy to produce series of
products not just one piece.
18
http://recreatedesigncompany.com/ 30.11.2016 19
http://www.glasweb.se/hauge/beta2/default.asp?lang=sv&content=welcome 30.11.2016 20
http://canaltredesign.dk/ 30.11.2016
23
Another competitive advantage is that the company collaborates with the design school KEA and
therefore their design is more valuable for the customers.
Target market
- Restaurants
- Individuals interested in up cycling and alternative clothing
Marketing strategies
- Invests in their brand, they are present in the press21 and also held an optimized site that shows
professionalism.
- They have key partners ,as I mentioned earlier- Berendsen22
- Creates awareness by updating their activity and writing articles23
- Targets CSR activities24
- Involved in the community development , training unemployed and refugees25
Products
- The products 26are being created as singular projects or as batches. Alternatively products are
being created with the help of students of design school KEA.
- The company is producing a range of fashion bags that are made from canvas material and the
colors can vary from Blue, white or dark blue. For the restaurant side they provide aprons and
knife holders.
Pricing
- For the Apron we have a price of 300to 499 DKK and for the bags 250 Dkk
Cannels
- The sale does not take place on their website, but clearly prices are being displayed on the
Facebook page. Accordingly, customers can contact them and get more info about a particular
product.
- The promotion is made through the website where they promote their initiatives by posting
press releases, and the upcoming ideas. Other channels for promotion are Facebook.
- Other promotion is being made by attending events that have as focal theme sustainability and
ethical CSR activities.
Competitor analysis of Recreatedesign
Company profile
1. Headquarters in Gothenburg
2. Operating on multiple markets
21
http://canaltredesign.dk/wp-content/uploads/2016/05/CanAlt-artikel.jpg 30.11.2016 22
http://canaltredesign.dk/om-canalt/ 30.11.2016 23
http://canaltredesign.dk/presseomtale/ 30.11.2016 24
http://canaltredesign.dk/om-canalt/ 30.11.2016 25
http://canaltredesign.dk/om-canalt/ 30.11.2016 26
https://www.facebook.com/CanAltRedesign/?fref=ts 30.11.2016
24
3. Possess innovative human resources
4. Areas of interest: lifestyle, design , recycling/up-cycling
Competitive advantage
Recreate design offers a variety of services for businesses that represents more value; on the other hand
they have a good knowledge of the market and have high innovation and creativity standards. A key
competitive advantage is their human resources that can deliver unique projects both for companies
and private persons.
Target market
1. B2B, basically every company can use the services offered for the interior design
2. B2C –people interested in non-conformist interior furniture
3. B2G- social welfare people bring money from the Swedish government and get training
Marketing strategies
Invests in design and also execution
Present on a broad line of social media channels
Fosters networking through the share space program and innovation hub.
Positioning -design and stylish, sustainable.
Knowledgeable of their strengths
Diversification-serving many customer segments
Product and service profile
- Interior design for companies and households27
- Inventory relocation –takes care of the old furniture companies don’t need any more and places
them at schools or reuse them into new products.28
- Creative workshops 29- team building purposes and educating school students towards
sustainable future.
- Consulting service30- with focus on guest speaking , project management , event planning and
sustainability
- Studio share31- sharing the working place with other companies to foster innovation and save up
costs
- Social enterprise32- unemployment is a concern therefore people are getting more skilled within
creativity and innovation.
27
http://recreatedesigncompany.com/services-2/sustainable-interiors/ 30.11.2016 28
http://recreatedesigncompany.com/services-2/inventory-relocation/ 30.11.2016 29
http://recreatedesigncompany.com/services-2/creative-workshops-2/ 30.11.2016 30
http://recreatedesigncompany.com/services-2/consulting-services/ 30.11.2016 31
http://recreatedesigncompany.com/services-2/studio-share/ 30.11.2016 32
http://recreatedesigncompany.com/services-2/social-enterprise/ 30.11.2016
25
Pricing
After screening the website and taking a look on their social pages I could not be able to find a price for
any of their products. I therefore sent them an email requesting a pricelist for some of their products
and services. No answer had been replied.
An estimate would be that their prices are more than the other competitor’s offerings, as the design is
more stylish.
Channels
Facebook, Instagram, Pinterest, twiter, Google +, LinkedIn.
Benchmarking The benchmarking analysis will help us identify the core competences of About Innovation in report to
its competitors. By doing so we will be able to stand out in the market and compete.
Redesigncenter and CanAltRedesign are the ones that have similar offerings to About Innovation. By
looking at the Swedish competitor we can observe that they are more focused on the redesign of the
workspaces for organizations. Despite the fact that we are not aware of the price range for these
services I still consider that About Innovation has an upper hand. As a start-up they cannot ask for high
prices before they build a customer base. Furthermore, later they can have references and referrals.
CanAltRedesign is working with fabrics from industrial plants and are focused mainly on manufacturing
clothing witch is minimizing their product range. About Innovation already is experienced with working
with wood, textiles, lamps and have a broader product range. In this way it becomes easier for the
customers to find the right mix of products and services at the same place and even get bulk discounts.
Key features of About Innovation
1. Combining wood craftsmanship with recycled wood and likewise for textiles. With two
enthusiastic people the company already managed to product several furniture pieces
2. Designing creative workshops for the public. Already at their thirds attempt and the progress
can be seen in the remuneration. Remake Christmas brought the company small revenue and
more than that the people can see the intentions of the company and start trusting them.
3. Designing projects for the organizations. Although at the beginning in this area it seems that
companies are interested in cooperating in projects. This shows potential for relational
customers that are more valuable on the long run.
4. Training unemployed people. Knowing the governmental opportunities from the PEST analysis it
is clearly that the company will gain revenue from this customer segment.
5. Offering memberships for people to create their own projects. With the weekly meeting where
the company is presenting their intentions and progress more people are interested in joining
in. They can either join as volunteers or as members where they design their own projects by
paying a small annual fee.
How About Innovation will be able to support their key features on the future
Attract wood artists in joint projects to help the employees get more skilled
26
Design bigger projects for the city that can be seen by everyone not just within the pale of the
workshops. In this way they can get the recognition of the whole city.
Seek for volunteers from the design school KEA, or other alike that can bring a design
perspective to the projects that can be more valuable.
When it comes to teach people the communication is an important factor, the people have to
feel comfortable and confident that they can and are doing the right things. About this the
company can set up a motivation scheme to support continuous practice.
Communicating freely with the new people will make them understand what is that they can
benefit from the other members. A set of teambuilding exercises would be useful.
SWOT
SWOT comes to recapitulate what are the main highlights of the internal side of the company
and in equal measure the external treats and opportunities that arise after completion of the
microenvironment analysis.
Strengths and weaknesses of About Innovation
The assessment of the strengths and weaknesses it is important as these factors also will
contribute at the development of growth strategies. Using some of the strengths will lead to building
competitive advantage for example. On the other hand, being aware of the weaknesses will help About
Innovation understand why other competitors are going to be better.
The following table contains broadly the set of strengths and weaknesses that are the most important
for the company to be able to move further with the concept they envision at the moment.
Strengths Weaknesses
Human resources availability (Volunteers) Founding Resources Machineries Warehouse Employee communication Creativity High CSR profile Employee motivation Low conflicts Unique products Income opportunities from unemployment founds from the state
Weak design Lack of stable vision Weak management Low awareness to the market Low revenue Low capital No customer base Low workers skills
27
Treats and opportunities
The treats and opportunities are the result of other companies, governments actions and they cannot be
changed, but only be observed and sometimes avoided.
Treats Opportunities
Up cycling is gaining more interest for entrepreneurs Low interest on the customers side in up-cycled products Globalization
Danish government is investing in training the unemployed Roskilde Festival waste INNEON founding program Circular economy rises awareness Opening a coffee shop and showroom
Part conclusion for the external analysis So far we have been assessing the potential of countries, Denmark and Sweden .In report to the
literature and the internal objections of About Innovation we see that Denmark has a high spending
power, although less than the one on Sweden.
Moreover, the import and export between the two countries is being increased once the Oresund
Bridge had been opened meaning that now it will be easier for the company to distribute over the
borders. Thinking consciously about the governments in both countries regarding the employment
trainings we can say that it’s an opportunity for stable income once the organization is established.
Great emphasis is being shown for the circular economy coming from the European Commission, with
time About Innovation will become clear on what is that they can offer and with a viable business model
they can access the founds offered by Angel investors.
Turning our attention to the porter 5 forces analysis and we identify a high treat coming from the new
entrants, more to be aware of is also the treat of substitutes, some of the competitors are more skilled,
stronger brands ,and have better suppliers.
Naturally, we can deduct that the closest competitors are more stylish and hold better human
resources. They also have a better understanding of the industry and are better embedded within the
markets with already established distribution channels and customer base.
Once the internal and external analysis it is completed, for the following part of the paper I will put
together an implementation plan
Implementation plan
28
In the implementation plan I will combine the following set of theories and models to ensure the good
development of the company for the future two years.
To start with, the Ansoff Growth strategy will be outlined to better understand how to position About
Innovation in regards to its competitors. Ideally it will be that the markets where the company is
heading to are free, or few competitors. For this I will use the blue ocean strategy that should lead the
company to a new market demand with prospects of a high market share. While these new strategies
will fall in place, the actual business model will change as well and an updated one needs to be created
to ensure the viability if the value proposition.
Moving to the marketing and the sales plan for the home market and the international one I will show
the importance of customer relational strategy. This strategy will bring new customers in time due to
the qualities of referral and reference.
To complete the implementation plan I will make a budget for the following two years and as well a
balance score cards with measurable KPI’S for planning and purpose so that the company can monitor
the progress.
Ansoff Growth Matrix As from the next year About Innovation will hold their own workshop where they can create most of
the products. Knowing this and the will of the management to quickly grow I can see that the most
suitable strategy it is the market penetration, already the company had made some small sales but more
people are being interested in their services and merchandise. Accordingly, About Innovation will have
to boost their presence in the market, make more efforts with advertising and promoting their products.
Naturally, all of the above will have to be included into the marketing plan so it will support the sales as
well. One of the advantages here is that the quality of the products is better and it’s also friendlier to the
environment and unique. These value propositions will act as a competitive advantage against the
competition.
The market penetration strategy is being shaped by the following the following directions:
It should be attracting customers that have small and medium organizations, such as cafes and
restaurants that do not have a fresh look in their venues. By having changed the interior the customers
will prefer to come and eat or study and it will be anyway an improvement for them. To be able to
actually get the sales it is important that we will manage to have many leads. Once we have enough
leads the next step is to convert these leads into sales.
On the other hand it will be a good opportunity to market the products to the b2c as well, in a manner
that will make them chose our products over the other designers and big retailers. For this strategy we
have to understand very well what tools use the competition to attract their customers , what offers do
they have, promotions, how do they present the products and in equal measure what is that the
customers look for when they want a new product.
29
The main reason of the penetration strategy is to gain market share for the About Innovation, of course
that now we have outlined the directions where the company is going to and also highlighted the values
that they will compete with it. At the moment it is important that the company will also invest in the
personal selling as now the sales person is the first that comes in direct contact with the potential
customers and it is vital that this first contact is a going to create a good image into the customer’s eyes.
Internalization strategy
Stay at home and Born Global –two step strategy
Given that fact that globalization is becoming a more discussed subject nowadays that shapes most of
the world economy among the implications of the states, it is important for any company to have
analyzed this perspective once they are willing to bring a product or service to the market.
As it is said by Peter Dicken in his fourth edition ‘’Global shift’’33 , ‘’any market that is global is also
local’’. Therefore it is important for any company once they start their activities on the local market but
to have in mind the potential for global expansion.
The criticism for the born global model in the case of About Innovation is that this model requires first a
high degree of capital and a strong network that will allow the company to expand at fast rate in
multiple markets at the same time right before the competition does. On the other hand it is equally
important that the management vision it is of great stance and it’s able to take the concept further.
At the moment About Innovation does not held any of the above mentioned factors except that the
drive of the management is envisioning a bigger picture for the world circular economy 34
As it was noticed also in the political findings in PESTEL, a greater accent is put on this concept by the
European commission with possibility for founding as well.
As it was mentioned also in the conclusion of the external analysis, once the company has a viable
business model it is more likely to be able to go global or at least first on the European continent. Until
that point the company needs to be stable and have well established value chain and a supply chain that
is minimal functional.
What I mean by minimal functional is that all the systems are working with minimum of resources
involved. It is more like a prototype or even a pretotype. Theories that can help with this tasks are for
example the ‘’Mechanical Turk’’35, which is an entrepreneurial tool to try out theories for a functional
concept with investing as minimum resources as possible.
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Global shift – Reshaping the global economic map in the 21th century – Peter Dicken ISBN 0-7619-7149(hbk) Page 32 2.12.2016 34
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Another internalization theory according to the nine strategic windows36 is the safest and it requires the
company to stay at home. By doing so About Innovation will prepare with the right business model, get
the right connections and gain capital for cofounding.
Blue Ocean strategy Within the today’s business environment it is obvious that multiple markets re being saturated and
competition is battling for market share in a shrinking market. The solution comes from W.Chan and Ren
E. Mauborgne as what is called the blue ocean strategy and it stands for creating a new market where
the competition is irrelevant.
The blue ocean strategy is relatively looking at creating a better, more innovative value proposition for
an untapped market that can cover demands of the customers that have never been addressed before.
Strategy canvas
With the strategy canvas, strategies of the competition are being compared across several categories as
it can be seen in appendix 5.
To be able to efficiently position the company in such a way that it will not directly compete with the
other two by product, price, or any of the above characteristics, as much as possible we will try to
eliminate, raise, reduce and create new values for a perfect competition.
Four action framework
Eliminate Waste processing as the only attraction
Raise Atmosphere, quality, personality , authenticity
Reduce Number of public events. Get fewer but with greater impact across people and time.
Create Education events and workshops on sustainability and innovation with companies and schools Coffee shop with showroom of up cycled products
One things that is worth to keep in mind when creating a strategy for blue competition is that no matter
how much the company will align themselves for a niche market, there will always be other competitors
either copying your business model or naturally reach the same market. That is why it is important to
constantly reshape the strategy and reposition.
Business model to be The business Model will aim at describing the value adding process for the customers.
The fundamental stage in creating a profitable business model is to start with a good value proposition.
If the value proposition is the core of the business model, we will aim at creating a strong VP so then the
rest of the blocks will come to support those.
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edition ISBN: 978-0-273-70678-6 02.12.2016
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For a proper design of the business model, a clear view point upon the pains and demands coming from
the potential customer perspective will have to be assessed. In this way About Innovation will be able to
deliver the right values.
Furthermore, I attempted to conduct a small qualitative research with the school ZIBAT, where I have
presented the idea of a practical workshop that can help with the students understanding of topics such
as sustainability and creativity in a more interactive way.
Presenting the service would lead me to the reactions of the teachers to such an initiative, and it will
help me understand the future success of the workshop.
According to the Business models Canvas book we have to address the right questions for a creating a
meaningful value proposition. The sum up of these questions is being covered by what is called the
empathy map.
In this way I have approached the issues that arise with the students regarding the present teaching
methods; here I tried to analyze the pains37.
Accordingly, by putting myself into the customer shoes I have identified the following pains:
Lack of trust that someone else might do the right job and they tend to do everything by
themselves
Lack of investment capital
Lack of communication skills between the employer and the employees
Low vision and innovation skills
Fear about employees that they are not going to bring the right solutions to the problem in
course
Lack of trust in the outcome of the service
High uncertainty
Value proposition
After reshaping the competitive strategy in the Blue Ocean strategy, some of the value propositions had
been left aside and other have been more emphasized so that the company will be able to reach
another market that will be profitable.
Grounding the creativity and Innovation for companies through involving projects that
stimulates the employee’s ability to express.
Prolong life of waste through alternative design
Creating long-lasting design for the companies where both customers and employees can feel
comfortable and inspired.
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32
Customer segments
Having in mind the new information acquired from the analysis of the competitors and what is being
outlined in the blue ocean strategy it is beneficial if a new assessment of the customers segments will be
made.
Segmentation by size: startups and small and medium companies
By location: all around the Copenhagen area within the reach of the company’s possibilities to transport
the right resources for the projects.
By industry: Even if the services offered are not necessary bounded to a specific industry, anyway we will
have to be more specific on what is closer to become a future customer. We have identified in our
competitor analysis that Redesign center is offering their services to basically every company that is
looking for relocation or redesigning their workspaces. Also we offer services concerning creativity and
innovation that all companies can use. Therefore the industries we will be targeting should have
multiple workspaces or areas where customers are sitting. Furthermore, industries such as Hospitality
and Tourism, Education industry (schools) and Retail are the targeted ones.
By needs: Making the empathy map of the pains that the customers might encounter, the following step
is to create symmetry by uncovering the needs.
Need for a fresh perspective for the employees that will stimulate new ideas and better progress.
Need for a competent supplier that is able to bring fresh design with a good balance price/quality for
the workspace and public space.
Need of competent people to guide and foster innovation and creativity among employees
Customer relationships
With customer relationships it can only go within the following directions, referrals, and reference and
co creation. It is more than crucial for About Innovation’s development that they quickly generate
referral relationships as it will be easier for future customers to get firsthand information and guidance
from the consumer itself. Moreover referrals represent one of the informing sources of any customers.
On the other hand we have the Co-creation. It is equally important for the company to be able to
develop their design and skills; with co-creation this will be easier by using the client’s suggestions.
Channels
Different channels will serve different needs. To be more specific, we therefore have:
Channels where the company is creating awareness and keeps the public engaged and updated with
what are the projects they are being working with, such channels are the social media: Facebook,
Instagram, personal contact with the public and maybe for a more professional approach designed to
create a better network, LinkedIn. As I mentioned in the internalization strategy, About Innovation will
have to create strong connections.
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Sales, the company will have their own website with the beginning of February next year; another sales
channel will be through sales people.
For customer support or any inquiries, the clients can contact the company via e-mail.
Revenue streams
1. The revenue streams will not change significantly, the streams are as it follows
2. From members subscription
3. From direct sales of products
4. From projects for companies for interior design
5. From projects on innovation and creativity with companies and schools (educational )
Key resources
The most important of all resources that will be needed are the human resources. The company will
have to have skilled people to be able to understand the customer’s demands and also be able to
conduct a good project execution that will be referred to other companies.
Key activities
By far one of the most important key activities will be the continuous education of the volunteers and
the employees. In this way they can develop better and more valuable projects. Also investing in the
research and development it will be important, as they will always have to bring up new design, new
products and exercises for fostering creation and innovation.
Key partners
As from the next year the company will have their own venue, therefore their partnership with INSP will
not be needed, in this case there is not any important partner that the company cannot function
without. Nonetheless, on the future, maybe it will be good for the company to partner with schools,
designers, and environmental protection agencies, so in this way they can develop their products better
and also get the recognition and credibility for their services and products.
Cost structure
The cost structure will be changed one the company will open their new venue and start their
operations on a larger scale, therefore I have put together an estimate of the yearly income and
expenses in a budget 38for the following two years, 2017 and 2018. Naturally this can change due to the
external circumstances.
Budget When About Innovation started to exist as a business entity, there were almost no expenses. Most of
the materials used for the creation of workshops and the products themselves had been obtained from
free resources and the time of partners. Naturally, there have been no salaries paid to the apartments
as they intended not to have any employees until the company is constantly wining profits. Other
materials used and as well the storage room were all for free offered by INSP Roskilde. Gradually the
38
Appendix 1
34
company’s activities had ben extending but all with the help of volunteers, and the same concept it is
preferred for the time that is up to come until the company will be self-sustainable. Most of the times,
the members will spend from their own pockets for food and to cover other necessities.
One of the biggest expenses that the company will overcome it is the purchasing of containers to build
the new venue and as well the right machineries so that the staff will be able to perform their work in
favorable conditions, such as electrical saw, drills with different endings, gloves and other machineries.
With the opening of the venue, the about innovation plans to have a small coffee shop that could bring
them more revenue that is stable. Moreover, costs for separate machineries are also considered, such
as coffee machine, fridge and glass display. To continue with, one part time person will have to be
employed in the next year to take care of the sales.
So far the company managed to successfully get other’s people interest and as well institutions
showed great concern in what About Innovation is aiming at. Furthermore, as a source of income,
founding seems a good strategy. Applying for founds worked before and they got help from the Roskilde
municipality and in equal measure they also won a competition. For the future income, they can still
pursue the same strategy but also increase the sales of products and paid workshops. For the year to
come the company can go to other competition and apply for founds again, subsequently they might
win 100 000 dkk. As it had been concluded in the growth matrix, a market penetration will offer them a
part of the market share and subsequently it will lead to sales.
The company at the moment has to offer two services. Interior design service will be paid according to
the size of the venue, to the complexity of the project and resources used. Accordingly, a specific price
cannot be established but an estimate between 2000 dkk and 5000 dkk should be a feasible price.
During the year the company might take somewhere between 2-5 projects.
The second service that stand for the creativity and innovation workshop for companies and schools will
range between 1000 dkk and 2000 dkk with the resources given by About Innovatinon. Having in mind
the time it will be used for preparation for the activities, two workshops for the first year is a good start.
Nonetheless, we have the sales of About Innovation products, such as benches that are priced at the
moment with 5000 dkk each, and pillows having a price of 350 dkk. An estimate of 10 customers for the
next year would be a good reference to start with.
The café it is not yet ready and a realistic estimate is hard to be made, but 2000 dkk a year it should be
possible.
Lastly, by acquiring new members, unemployed and the company will get money from the government
for training them, or as people that are just passionate about wood and do it yourself projects, About
Innovation can win an estimate of 5000 dkk/ year.
By adding together the assumptions we have:
3 interior design projects -9000 dkk
35
2 workshops -3000 dkk
10 sales > (1 bench =5000 dkk) + (5 pillows= 1750 dkk ) = 6750 dkk
café =2 000 dkk
from memberships -5000 dkk
For the first year, 2017 it seems that About Innovation will be able to generate 24750 dkk from all of
their customer segments. Gradually, it is normal that the sales figures will increase for the following
year, 2018 and a rise in revenue will be noticed. It is more of a must for the company to pursue a and
gain more customers as the costs for opening the new venue will exceed their investment levels and
therefore they have to break even as short as possible. It is estimated that a rise in sales for 2018 will be
of 10% more.
There does not seem to be much of a profit, but for a startup company that is still figuring things out,
this is a proof of their abilities and naturally they will grow more and be able to deliver more qualitative
and valuable services and products that can be prices accordingly.
Below I have comprised an in depth budget to the following two years that can be seen in Appendix 2.
Marketing plan With the creation of the marketing plan About Innovation will try to determine where it will be their
position within the market, what comprises their vision in what concerns the marketing itself and the
objectives.
Positioning
Reborn resources are uniquely combined through creative design. Redesign workspaces for companies
and rediscover aptitudes for and for their employees.
Customer analysis
Most of the companies targeted are aware of the importance of a good ambient environment for their
customers as that factor alone can make great difference in their sales, customer relations.
Companies that cannot find their way to more growth are frustrated and it would be a good opportunity
for them to get around new solutions and try out new things.
The objectives of the marketing plan
Create brand awareness where the company’s intentions and skills are identified as creators, innovators
that can easily help people and organizations bring their ideas to life also.
To help the prospect customers’ uncertainty and avoidance decrease it is helpful if the company will put
together a customer portfolio.
36
Get feedback from customers to be able to improve faster and develop more suitable products and as
well avoid mistakes on the future.
To promote the company’s services as new and communicate simply the fact that though their actions
and the customer’s actions, the environment is more sustainable.
Vision of the marketing
The aim of the company is to become one of the most capable innovation centers in Denmark and
Sweden that can deliver quality projects for indoor and outdoor areas, all made from recycled materials.
Their aim will be also to be able to encourage the people around to be more creative and start working
on their own ideas for the greater good of the word around, either working with recycled materials or
not.
Mission of the marketing plan
About Innovation should use money to invest in informing the public about their services and products,
according to the growth matrix, it is more than a must. The efficiency of the methods used can be
measured by the website visits, by the shares they will get on Facebook and likes on other social media
such as Instagram. The goal of the plan is to acquire at least 10 customers for the following year.
The ideal customer image
The ideal customer is the customer that is curious and is experiencing new things with their company
and privately and it’s willing to invest in the development of the company and his workers because they
know that happy workers bring more money. Ideally, the customer has more venues and it is willing to
implement the project in multiple places. At last, the ideal customer is willing to trust and is putting
emphasis on quality despite the price.
The price that the ideal customer is willing to pay it is 5000 DKK for one time project.
For the ideal customer to reach About Innovation, there should be established a lead generation plan.
Advertising
About Innovation already is accustomed to the press, many times they had been cited in articles for
their progress for winning the competition and when they opened the company officially, therefore this
strategy should be pursued in the future as well.
Public relations
Assessing the competitors benchmarking gave us the information about Bevar that they are posting on
their website new information about their initiative and progress, such behavior could be used also by
About Innovation where they can post the anatomy of their projects, what materials have been used,
where they come from, how the staff would use them and so on. It will be more to create a so called fan
community where the followers can also put questions and suggest certain projects.
37
Lead conversion
For every customer that comes in contact with the company, a copy of the product portfolio will be sent
to them, in this way he or she will get the chance to see for themselves the quality and design the
company is capable of. Furthermore, the customers that show interest will get a meeting with one of
the sale persons. Once the meeting is in place, an assessment of the project will be done and a price will
be determined. If the client does not have the money to invest, maybe payment schemes should be
discussed. In any case, as sign of good faith and interest for future collaborations as well the company
can leave them a small gift as sign of their interest.
Sales forecast
As it was mentioned above, the sales that are expected to concretize are 10 sales. It is the responsibility
of every member to spread the word and encourage more people to purchase. In this way, if more
people are involved the sales can exceed the forecasted amount.
Budget for the marketing plan
Most of the expenses that the company will incur while implementing the suggestions will be
determined by the time that the employees will invest in creating advertising material and
communicating on social media the vision and mission of the company.
Key performance indicators for the marketing program
Measurable and controllable kpi’s will be used also to comprise the balance scorecard that will stand as
the backbone of a successful strategy. The following are the marketing indices:
Leads
Converted leads
Public relation mentions
Positive feedback from the clients
Marketing mix Marketing mix will allow the company to implement the steps outlined earlier in the marketing plan and
in equal measure to help the sales strategy.
Product
The products that customers are getting are finished projects for their workspaces, practical creativity
and innovation workshops and as well the line of singular items or batches.
The main characteristic that bounds the whole products it will be the design and the uniqueness of the
resources used. The customers will use the products as home furniture as what concerns the b2c and for
the b2b, the projects will serve the customers as a mean to make the consumers more comfortable
when they are waiting to have a meeting or just simply enjoying their coffee or meal. The name for the
products as for the pillows it is Millow and it stands for morphing pillow. It is a catchy name through the
warmth of the word and ease to spell it. In terms of features, the pillow has a unique design with three
corners that is meant to hold the consumers back more efficiently when they are sitting, fact that will
assure more comfort. As for the indoor and outdoor projects, the consumers will not directly be able to
38
use it but just be influenced by it and get a good feeling. Moving further to the workshops, there is no
specific way to use creativity and innovation, it is up to their own imagination and creativity to take the
best out of it, of course with the help of the team directing the workshop.
Price
The prices that are being outlined earlier in the marketing plan are not to be static; naturally the prices
will have to change for meeting the customers’ possibility of payment as well. Given the fact that About
Innovation is a startup company and their recognition on the market is limited to several sales and the
promotion in the newspapers, it is wise to be able to adjust.
The prices anyway will be constructed based on what are the competitors providing , the time and the
complexity of the project and as well the possible benefits that the customer can offer on top of the
sale, as for example if the customer will refer the company to other customers.
We have estimated an average price for an interior design project of being somewhere between 2000
and 5000 dkk, but given the fact that actual designers have a starting price for projects either is big or
small of 20 000 dkk39 it will be good if the starting price for a project it will be 10 000 dkk. Of course the
price will be further be negotiated and a BATNA40 will therefore be 7000 dkk.
As for the workshops we are not aware of who are the other competitors offering similar services, in this
case we can test what is a good price again by applying BATNA. If initially we set up the price for 3000
dkk as maximum limit, a new price would be of 5000 dkk with an agreeable deal of 3000 dkk for one
workshop.
The price for the pillows and benches did not attract any sale yet, also due to the lack of knowledge of
the potential customers. If we consider the time and the resources used we can still keep the same
prices of 5000 dkk for benches and for the pillows we can raise the price to 450 dkk.
We have chosen to use penetration strategy so the prices will change again until we will be able to sell
the products and services, but still hold acceptable marginal profits.
Place
With the place we refer to all the possibilities for customers to purchase the products and services. In
this way, on the website that it is going to be created the following year customers can purchase via
online shop. Also when the new venue will be established, customers can come and visit the showroom
and also purchase the displayed products. For a greater accessibility, via social media, the website can
be mentioned in articles. Once the company will have done several projects, they can agree with the
customers to place informational material such as leaflets about the project and as well referring links to
the company.
39
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Batna- best alternative to a negotiated agreement 07.12.2016
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Promotion
So far About Innovation conducted a series of workshops in the city center where many people got the
chance to see their work. In the same manner they can work with the city development and build a
piece of art that is also functional such as a playground and have their mark on it that can catch the
center of attention. Another way that is more efficient and can reach more of the target group is by
placing banners on cars, in this way many people will see it.
Sales strategy This sales strategy will have to follow the marketing plan and accordingly we have the following
strategies:
1. Create awareness in the market
2. Create a customer base
3. Create a product portfolio
4. Get at least 10 customers
5. Collect feedback from the customers
6. Build a fan community on social media or website
7. Create leads and increase lead conversion rate
8. Identify BATNA for the services
9. Seek promotion partners
10. In order to achieve the strategies, we have to further divide them into operational strategies or
tasks.
Tasks
1. Public relations person will maintain updated posts and write articles on the company’s projects
and achievements
2. Make a list with potential customers including their name, contact information, industry and
what kind of service they seek for
3. Make pictures and design a document where all the projects and products are included that
seems appealing
4. Build a set of questions and call the clients for the feedback or send them and email.
5. Create giveaway contests that assures a prize if the comment their ideas and promote the
concept of sustainability as they see it
6. Contact bloggers and online magazines to write articles including Links for About Innovation
7. Meet with the potential clients and identify what is the right price for both parts
8. Desk research
Customer relationship management With the implementation of CRM systems it will be possible to follow up the clients purchasing periods.
It also helps the management be able to predict on the future when the clients will make another
purchase. In this way it will be much more cost efficient to contact the customers at the right time.
Usually CRM is comprised by databases where information about the customer is being saved and
analyzed. Such data bases are costly and at the moment About Innovation does not have the right
40
capital to invest in such systems, also their customers are limited and it is easy for the management of
the company to keep track of.
Systems like these will be needed when the company’s marketing plan is taking action and many leads
are being generated.
Balance scorecard The balance scorecard is combined with a strategy map and subsequently an action plan that it will
follow. Each of the three tools are important and combined they can take the big goals and set them
down into achievable actions that can also be counted and controlled.
About Innovation have many tasks to keep track of and little people to manage them. The tendency is
that over time the focus will switch to other goals and the team can become confused at times.
Therefore it is a must that the management is able to set down their longer and smaller goals where
everyone can follow and measure the development of those goals.
With the strategy map we will be able to follow links starting from the financial perspective, all the way
to the learning and growth perspective.
The financial perspective,
Having a look back to the problem formulation and we see that the long terms goal is to increase
revenue by 20 000 dkk during the following year. Increasing revenue or shareholder value can be done
also by improving the productivity.
So the question now is what has to be improved to reach a revenue increase of 20 000 dkk?
Customer perspective
The customers are the ones that will pay either for the service or for the products; therefore it is good to
understand the customers segments, their needs and pains and to grow the relations with them.
Customers are sensitive to how the company is contacting them and in equal measure they are sensitive
to prices. On the contrary, a customer that trusts a brand that is competent and clearly it will bring
those advantages will convince them to spend more. According to the customers About Innovation will
tailor their products, services and strategies so they are sound and appealing.
Internal perspective
Experimenting with product development would be one of the activities that the company will have to
work with for long time. Subsequently, more efficient processes will be tailored such as distribution. The
company has only one utility car that is too small for all the resources and tools to make the projects.
Learning and growth
Probably one of the most important perspective or all where the employees are the ones that have first
contact with the customers and they are also the ones that create the value.
41
In this paper you will find specified that the design is an important key element to the value adding
process of the services and products that the company is trying to sell. Learning and growth puts down
the goals that directly will allow the development of the employees. Goals like this would be for the
team to get a designer student from KEA as an intern that can teach them design or work together. Due
to the limited capital, a professional designer will be hard to employ. Another goal that is worth to be
mentioned is to use the help of another CAD student that can easily divide the project into separate
parts so it’s easy to prepare.
I also made a visual representation of the strategy map that can be found in Appendix 3
Balance scorecard
The balance scorecard will be used to measure the objectives outlined in the strategy map. The
measurements will have to be constructed so they can be controlled. Although we have identified the
long terms goals as well and the more achievable goals for the short run, it is challenging to set up
clearly measurable indices that is why About Innovation will have to review the balance scorecard
constantly.
A detailed representation of the KPI’s can be found in Appendix 4
One of the criticisms that are outlined about the balance score card is that ’’the linkage between the
process and the client satisfaction is not proven’’.41 In any case, it is still useful for the company to have a
tool that is tracking the actions taken and also offers an overview and linkage between them. Compared
to the use of no such tools at the moment, for about Innovation this can help more than before.
Lastly, an action plan will help the management and the employees to clearly know when the right time
to complete certain actions is. Due to the fact that About Innovation is doing things on the spot and
sudden tasks arise that needs to be taken care of, the approach to complete the action plan will change.
In any case I have illustrated in appendix 4 a timetable for each target comprised in the balance
scorecard that shows the time to monitor the targets and the resources needed.
The kpi’s represented in the balance score card had been established according to the understanding I
have from the classes and what seems rational and useful. Not all of the kpi’s will work and it is up to
the company to adjust them and improve the assessment of these indices.
Final conclusions The purpose of this research was to find the opportunities for About Innovation to generate more
revenue for the following year selling locally and also exploring the possibilities for international
expenditure.
With the analysis of the internal perspective of About Innovation we have managed to understand how
the value is being added across their value chain. Subsequently we can understand that the company
41
http://www.mattimar.ee/publikatsioonid/ettevottemajandus/2004/12_Rillo.pdf 08.12.2016
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needs to become clearer on their vision and what are the products and services they would like to
develop further, to whom they can sell it and what the opportunities for revenue are.
Switching the view towards the external environment and we conclude that an expansion on the
Swedish market could be the most appropriate country for internalization due to the same political
framework and the same culture indices. Also, the European Commission has in place the program
INNEON to support the development of sustainable companies that are focused on circular economy.
Also it seems that in Sweden the welfare system offers incentives to companies for training unemployed
people.
With the understanding of the competitor analysis on the local and foreign market it seems that in order
to come to a blue ocean market, About Innovation has to develop a different set of services, that also
are able to compete through design and quality.
Compiling the results both from internal and external analysis of About Innovation lead us in generating
a plan of action that can be identified in the balance scorecard and the action plan.
Lastly, the research made it is a combination of theories and real data, therefore the applicability of the
suggestions made and the results gathered should be further adjusted due to the fact that both
mediums, internal and external are changing.
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Reference list
Appendix
Appendix 1
Income 2017 2018
Direct sales of products 7 000 dkk 10 000 dkk Sales of interior design services 7 000 dkk 15 000 dkk Sales of creativity and innovation workshops
5 000 dkk 10 000 dkk
Income from memberships 1 000 dkk 1 000 dkk Total income 20 000 dkk 36 000 dkk Expenses Container and building expenses 200 000 dkk - Utilities bills for the new venue 10 000 dkk 10 000 dkk Cost for the gas for cars 4 000 dkk 4 000 dkk Computers 5 000 dkk (first year ) - Internet bills 700 dkk 700 dkk Unexpected expenses 3 000 dkk 3 000 dkk Total expenses 222 700 dkk 17 700 dkk Yearly total -202 700 dkk 18 300
Appendix 2
Income 2017 2018- 10% increase Founds and competitions 100 000 dkk - Benches 5 000 dkk - Pillows 1 750 dkk - Sales of workshops 3 000 dkk - Seles of projects 9 000 dkk - Café sales 2 000 dkk - Subscriptions members 5 000 dkk - Total 125 750 dkk 138 325 dkk Expenses
Containers 200 000 dkk - Windows 50 000 dkk - Cables and electric materials 20 000 dkk - Workforce builders 20 000 dkk - Materials for foundation 10 000 dkk - Coffee beans 2 470 dkk 2 470 dkk Coffee machine 9 340 dkk -
44
Fridge 1000 dkk - Glass display 13 362 dkk - Gas for cars for distribution 5000 dkk 5 000 dkk Salary for part time café employee
72 000 dkk 72 000 dkk
Website administration 1 000 dkk 1 000 dkk Water 3 600 dkk 3 600 dkk Electricity 4 800 dkk 4 800 dkk Printing machines 2 000 dkk 500 dkk Other costs 50 000 dkk 50 000 dkk Total expenses 464 573 dkk 143 670 dkk
Appendix 3
Appendix 4
Balance scorecard Action plan Time used
Measurement Target Financial Number of sales made 10 Monthly
monitoring 1h
Number of founds applied for
1
45
Number of competitions attending
1 Once in 6 months
1h
Customer Numbers of surveys made for customer needs and wants
10 Monthly 5h
Number of prototype offers created for the customers
10 Monthly 40h
Number of contacts with the potential customers
Email, phone. Monthly 1h
Number of public appearances
Newspaper, events, networking 10
Monthly 10 h
Internal Number of calls, of send emails to check the interest of the customer
20 Monthly 2
Number of attempts to create a structured working way for the projects
20 Daily 1h
Number of leads generated
10 000 Weekly 2h
Number of leads converted
1000 Weekly 5h
Learning and growth Attempts to headhunt a capable design student
2 Weekly 2h
Number of attempts to acquire a CAD designer
2 weekly 2h
Number of seminars to educate the employees about the customers
5 Once a month 2h
Appendix 5
46
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About Inovation
CanAltRedesign
Redesigncenter