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Executive Summary of Business Model Deconstruction

The current study is focused on deconstructing the business model of Passel Australia using the Osterwalder & Pigneur’s canvas (2010) nine building blocks. The business and its key operations have been described for providing the background of the company. With the help of deconstruction of the business model, the key success factors of the organisation have been analysed. The risk factors associated with the business has also been identified and some strategies and changes in business model have been advised to the current organisation.

Table of Contents

Introduction.

Business model

Building blocks.

2.1 Customer segments.

2.2 Key partners.

2.3 Value proposition.

2.4 Key activities.

2.5 Channels.

2.6 Revenue streams.

2.7 Cost structure.

2.8 Key resources.

2.9 Customer relationships.

Interrelationships.

Critical success factors.

Downside risks.

Business model changes.

Conclusion.

Recommendations.

References.

1. Introduction to Business Model Deconstruction

Business models are highly essential part of a business which guides and helps in designing and conducting the operations of an organisation and its strategy to achieve success. The current study will focus on Passel Australia known for its innovative delivery services along with same day delivery service. The organisation has developed a crowed based delivery system considering the opportunity to the retailers to increase sales. It operates in the logistic sector and believes in providing convenient and inexpensive same day home delivery service. This company has started its journey in the year 2016 and invested $60,000 angel investment for the growth of the company (Anthill Magazine, 2018). There is no fixed infrastructure based on which the delivery is required to be completed and this provides the company to be addressed as one of the innovative service providers in Australia.

2. Business Model

The business model of Passel is embedded with highly advanced technology and reasoning, large scale curious services and partnerships. The deconstruction of the business model of Passel Australia will be based on nine building blocks of Osterwalder & Pigneur’s canvas (2010).

2.1 Customer Segments

The customer segments of the current organisation include the individuals that are looking for quick service delivery at an affordable price. The segments are mainly belongs from the medium to high income group where the services provided at a lower price. Individuals of both the gender and aged between 18 and above are targeted.

2.2 Key Partners

The organisation has partnerships with different retailers such as Motto fashion, Pookipoiga and other frontline stores in Australia. Along with this, with the help of Ireland’s Small Business Innovation Research (SBIR) it has been able to partner which the local SMEs such as, Adept Project Solutions, Doble Express Transport (DXT) and Yellow Express (SmartCompany, 2017).

2.3 Value Proposition

One of the major value propositions by the current organisation is to increase the affordability of the services to the common people. Another value added by the current company is making the same day deliver possible.

2.4 Key Activities

The key activities of the current organisation include flexible usage of infrastructures required for the delivery. It provides round-the-clock delivery facilities for the retailers to use their Omni-channels to collaboratively provide the delivery services (Ulmer & Savelsbergh, 2020). Apart from that, a continuous approach to make the delivery services considerably effective, the company is making investments in other countries like Ireland and USA.

2.5 Channels

The channels of the current organisation include non-professional and local couriers to the delivery packages that reach to the customers with delivery packages. The experience of the passers, the delivery people of Passel are the channel of this organisation.

2.6 Revenue Streams

The memberships of the delivery people with the organisation are a revenue stream of the current organisation where the revenue is generated through commissioned services. The couriers are actually the key resource. Through these streams the company has earned revenue of $20 million (Alnaggar, Gzara & Bookbinder, 2019).

2.7 Cost Structure

The administration cost of the company accounts for 40% of the sales. Maintenance and service designing are accountable for more than 50% of the cost of the company.

2.8 Key Resources

The key resource is the online platform through which the local and non-professional delivery people are connected with the current organisation for delivering the ordered products. Another resource is the flexible infrastructure based on which the services are provided in effective manner.

2.9 Customer Relationships

Customer relationships are developed through online channels. This company works as a mediator between the retailers and the delivery people through which the collaborative relationships among them are developed (Schreieck et al., 2016). On the other hand, constant attempts to provide quality services to the customers are made through communicating via online platform.

Interrelationships

It can be stated that the interrelationships among the factors mentioned above is highly essential for the current organisation’s performance. As the services are designed covering the needs and demands of all the age group, the company partnered with different kinds of retailers ranging from grocery offers to clothing retailers. This has provided the opportunity to increase the facility for purchasing the required products at an affordable price as the company targets medium income group (Soto Setzke et al., 2017). Maintaining a trustworthy relationship through effective management of the relationship with the delivery people provides opportunity to the company to use its resources to the fullest so that the service facility is improved. The connection with the non-professional delivery people is maintained through the application used for channelizing the services. Along with this, the company has partnered with the local retailers that provide services at a lower cost which has provided opportunity to the company to deliver affordable services to its customers.

Critical Success Factors

The success factors of the current business are incorporated into the services designing and delivery mechanism of the company. Additionally, with the increased environmental awareness worldwide, the current business has attracted the attention of customers by developing and implementing carbon neutral delivery model (Alnaggar, Gzara & Bookbinder, 2019). Investment in the Northern Ireland and partnering with the local SMEs has provided the certainty of low cost operation cutting the cost of intermediaries and middle men. The expansion to Ireland attempted by the current organisation has been planned to increase the channel or network for international delivery services even across Europe and USA. It will allow cutting the higher price of delivery to the international platforms. Along with this, the current organisation has performed effectively in developed relationship with the service people based on which the highly connected logistic network could be establishing ensuring faster delivery. For instance, effective relationship building between the retailers and the delivery is completed through the application based communication system where communication about the order details, delivery locations and others conducted.

Downside Risks

However, there are some risk factors working behind the current organisation that might affect its future performance and growth. As the current organisation does not consider any bar in use if technological infrastructure to deliver the ordered products, it is highly prone to have cyber incidents that might create legal issues in future. It has been found that most of the cyber incidents such as data breach, hacking and others may lead to customer’s personal information disclosure which may impact harmfully on the reputation of the current business (Riskware, 2020).

The aggressive expansion efforts might prove to be deteriorating factor for the business as downfall of the Ireland economy might create financial challenges to operate overseas for the current business. There is no information about the company using security system for the delivery application usage. Therefore, it can be considered as a threatening factor for the downfall of the progress graph. On the other hand, the company has a lack of focus on developing and redesigning of the services offered in the home country rather, the company has focused more on expanding the business in UK, Ireland and USA which might impact negatively on the flow of operation in Australia.

Business Model Changes

The current business model is highly innovative in conducting highly promising operations for the current organisation. It can be stated that some changes in the model is required to be incorporated for achieving further improvement in the business outcomes. Passel is required to incorporate a customised service delivery facility through which, along with the non-professional and local delivery people, professional and full-time delivery people can also be employed by the company.

Along with this, the company might design and develop a warehousing facility which they can use at the time of scarcity of the products adequately transparent services and collaboration with the partner organisations (Arslan et al. 2019).

3. Conclusion on Business Model Deconstruction

In conclusion, the above analysis provides a sound understanding of the key operations of the current organisation. The business model has been deconstructed into 9 blocks where it has been found that the interrelationship between the operations are highly effectively designed based on the aim of creating a all infrastructure allowed for the delivery services. On the other hand, the key success factors of the organisation are affordable price structure and same-day delivery services through which the customers can be supported with required services. Along with this, the key resource management is another approach of the business that helps in developing effective relationships with the customers. However, the aggressive expansion attempts can be considered to have high risk in future if the economy of Ireland drops.

4. Recommendations on Business Model Deconstruction

  • It can be recommended to Passel to conduct extensive amounts of market research that will give insight to its current market position against its rivals based on which the resource and operations of the company can be directed more to successfully handle the changes in market and customer demands.
  • Engagement of the professional delivery people will allow the current organisation to increase its service volume which has the potential to improve its profitability in future.

References for Business Model Deconstruction

Alnaggar, A., Gzara, F., & Bookbinder, J. H. (2019). Crowdsourced delivery: A review of platforms and academic literature. Omega, 102139.

Anthill Magazine, (2018). Australian delivery startup Passel is going global, launching in Ireland for Christmas. Retrieved 8 August 2020, from http://anthillonline.com/passel-expands-to-ireland/

Arslan, A. M., Agatz, N., Kroon, L., & Zuidwijk, R. (2019). Crowdsourced delivery—A dynamic pickup and delivery problem with ad hoc drivers. Transportation Science53(1), 222-235.

Riskware, (2020). 3 Biggest Risks Facing Australian Businesses In 2020. Retrieved 8 August 2020, from https://www.riskware.com.au/risk-management-blog/3-business-risks-facing-australian-companies-in-2020

Schreieck, M., Pflügler, C., Dehner, C., Vaidya, S., Bönisch, S., Wiesche, M., & Krcmar, H. (2016). A concept of crowdsourced delivery for small local shops. Informatik 2016.

SmartCompany, (2017). Six-month-old Melbourne delivery startup Passel scores spot at global tech conference in Silicon Valley - SmartCompany. Retrieved 8 August 2020, from https://www.smartcompany.com.au/startupsmart/news/six-month-old-melbourne-delivery-startup-passel-scores-spot-global-tech-conference-silicon-valley/

Soto Setzke, D., Pflügler, C., Schreieck, M., Fröhlich, S., Wiesche, M., & Krcmar, H. (2017). Matching drivers and transportation requests in crowdsourced delivery systems.

Ulmer, M., & Savelsbergh, M. (2020). Workforce Scheduling in the Era of Crowdsourced Delivery. Transportation Science.

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