• Internal Code :
  • Subject Code : MKT20031
  • University : Swinburne University of Technology
  • Subject Name : Marketing

Business Model Canvas and Gaps Theory

Table of Contents

Business model canvas for the proposed innovation for Solo Traveler

1.1. Key partners.

1.2. Key activities.

1.3. Value propositions.

1.4. Customer relationships.

1.5. Customer segments.

1.6. Key resources.

1.7. Channels.

1.8. Cost structure.

1.9. Revenue.

Gaps Theory with four gap questions.

2.1. Elaboration on how elements of the BMC has been designed to avoid gap 1.

2.2. Elaboration on how elements of the BMC has been designed to avoid gap 2.

2.3. Elaboration on how elements of the BMC has been designed to avoid gap 3.

2.4. Elaboration on how elements of the BMC has been designed to avoid gap 4.

Conclusion.

References.

1. Business Model Canvas for The Proposed Innovation for Solo Traveler

Product: Collaboration mobile app between Airbnb and OK cupid: HOP-ON

The business model canvas can be defined as the model that is based on the connections of an extensive variety of business model conceptions (Austin 2020). There are nine main elements of this model that are as follows:

1.1. Key partners

These are the external suppliers that perform the key activities of the business. To each key activity, there must be a mapping of key partners so that business risks can be reduced (Shi and Wang 2018). The key partners for the innovative application HOP-ON are as follows:

  • Hosts

  • Investors

  • Corporate travel partners

  • Corporate travel managers

  • Media and internet corporations

  • Technology providers

  • Web designer

  • Government

  • Goggle for advertisements

  • Local photographers

1.2. Key activities

These refer to the essential things that the business desires to do to provide on its schemes. In the case of HOP-ON application, the key activities are as follows:

  • Management

  • Marketing

  • Technology

  • Testing

  • Product design

  • Software development

1.3. Value propositions

These are the building blocks of the business model canvas and these display unique solution for an issue customer segment are facing (Indrawan et al 2016). The value propositions of HOP-ON are as follows:

  • Individual (Solo traveler) connection with others

  • Community

  • Localization

  • Safety and trust

  • Hospitability standards

  • Convenience

1.4. Customer relationships

This component describes the type of relationship to be maintained by business with customers. It further defines the expectations of the client base of business. The customer relationship of the HOP-ON is through the following areas:

  • Promotion and loyalty program

  • Social media

  • Dispute settlement

  • Transparency in privacy

  • Customized recommendations

  • 24/7 customer support

1.5. Customer segments

These represent the group of people that the business is trying to target and sell its services and products. In the case of HOP-ON application, it is set to serve the following segments:

  • Solo travelers

  • Men and Women between 18 and 44

  • Hosts

  • Guests

  • Business people

1.6. Key resources

These represent all the key inputs that are required to carry out the key activities of the business. In the case of HOP-ON application, the key resources are:

  • Skilled employees

  • Captured data

  • The algorithms (Questionnaires)

  • The brand itself

  • IT infrastructure

  • The app and webpages

1.7. Channels

These represent the medium through which a company or business will communicate to reach out to its clients. These are the main medium to raise awareness of the product or service of business among the customers (Chungyalpa, Bora and Borah 2016). The channels used for the communications of HOP-OK application are as follows:

  • Content marketing

  • Mobile app

  • Website

  • Google play

  • Tech blog

  • Ad campaigns such as YouTube, Twitter, and more.

1.8. Cost structure

This element recognizes all the costs linked with the business. The cost structure for the HOP-OK application is as follows:

  • Cost on IT infrastructure

  • Product development

  • Operations and customer support

  • Ad and sponsorships

  • Human capital

  • Insurance

  • Technology innovation

1.9. Revenue

This element represents all the sources from where businesses can generate revenue by delivering its services to the customers (Yang, Vladimirova, and Evans 2017). The revenue stream of the HOP-OK is as follows:

  • Advertisement fees

  • Subscription fees

  • Fees from both the Okcupid clients and the Airbnb customers.

2. Gaps Theory with Four Gap Questions

The gap model is a framework that aids in understanding customer satisfaction. It was given in the year 1985 by Parasuraman, Leonard L. Berry, and Valarie Zeithaml. There are mainly five gaps that companies should address when pursuing to fulfill the expectations of customers (Njau, Mutungi, and Mutinda 2019).

2.1. Elaboration on how elements of the BMC has been designed to avoid gap 1

The gap 1 occurs in the case when management does not properly evaluate the needs and expectations of customers. Client satisfaction and client attention are indeed the two vital components that each business must focus on while offering services to succeed in the market. Moreover, this client gap results in losing the clients, bad opinions about other services offered by the business, and poor reputed business (Wenzel, Mahle, and Pätzmann 2016). The BMC elements for the HOP-Ok are designed to fulfill all the requirements that customer desires, however there exist a gap in the face-to-face communications, unwillingness to ask the expectations of clients, and lack of market segmentation to understand the needs.

The management and staff are not concerning about building more relationships with customers. This results in less awareness of management about the expectations of customers. They must improve user experience by having live updates with destinations like restaurants to show waiting time, needs a booking, and slot available. Besides, they must enhance their direct interactions with customers to know about their perceptions and expectations. Furthermore, a business must conduct more marketing research and encourage rising communication in the business. There must be no hindrance concerning the exchanging of communicating service contact staff to the top management of the company. In addition to this, the top management must quickly act on insights and information.

2.2. Elaboration on how elements of the BMC has been designed to avoid gap 2

The gap 2 is not delivering to service policies and ideals/ standards. There is a problem with every service business in which the managers, decision-makers fail to convert their understanding of the client's expectations into service quality specification (Behdioğlu, Acar, and Burhan 2019). There is an element named as safety and trust of the value position of the HOP-Ok application that ensures that customers can trust the business on every aspect of service quality. However, there exists a gap in the efficiency of management in delivering services to clients on time.

In this business app of connecting the solo travelers with similar needs people, there is a lack of standards set for the service quality by the management due to which the efficiency is not maintained. It shows that there is somewhere lack of planning, unclear service, lack of management commitment that exists in the business that it must improve on. There are skilled employees in the business who are delivering quality services. However, all they need is the constant training from the top-level management for doing the business by adopting newer practices. This enables them to ensure quality services are being offered to customers.

2.3. Elaboration on how elements of the BMC has been designed to avoid gap 3

The gap 3 occurs due to the mistake on the part of personnel providing customer service. The real causes may be poor training, incompetency, or reluctance to fulfill the ideals set for the quality service. Moreover, the potential reasons for this gap may be unsuccessful internal marketing, lack of proper customer education and training, deficiencies in HR policies like compensation system, role conflict, ineffective recruitment, and more. The HOP-OK application must improve on enhancing the knowledge of the customers.

The application must be added with a feature of categorizing experience into a specific topic like music, art, exercise, food that will be an educational benefit of the app to promote the destination. Although there are some gaps regarding the same, the business model elements ensure that there are best policies for its people like the training and development department, compensation management, and others. These policies keep the employees gratified all the time and encourage offering quality service to clients. The key activities of the business model canvas of the HOP-OK application entail the management of the human resources meaning that it considers its people at the top level and provides every solution to fulfill their desires in the company so that they can always remain satisfied and encouraged.

2.4. Elaboration on how elements of the BMC has been designed to avoid gap 4

The gap 4 occurs between the external communication and service delivery. These may arise due to failure to manage the customer expectations, over-promising in external communication campaigns, and more (Arora and Narula 2018). The business model of the HOP-OK ensures that what has been communicated to the customers via its advertisements and marketing, will be delivered to them with the quality services. Customers can trust this app for getting reliable services for a lifetime. The business model canvas also ensures that there are well knowledgeable employees who always manage to reply to the issues and questions of clients. The business is successful in providing the services that were promised to the clients and hence avoiding this gap.

Moreover, there is a good connection between the sales and the operations department of the business that means the operations team already knows what the salesperson has promised to the prospective client. This enables the operating personnel to deliver the promised quality to the clients. Furthermore, the customers of HOP-OK applications are being educated by the business so that they could become better users of the service. There is a wide range of advertising activities that can be seen in the BMC components of the business. There are both offline and online marketing strategies used by the business to aware people of its services.

3. Conclusion

From the above two frameworks namely business model canvas, and Gap model for service marketing for the innovation idea of HOP-OK application, it can be concluded that this idea of collaboration of the mobile app between the Airbnb and Ok cupid has been refined in such a manner that it is the best solution for the solo travelers. This app has been created for the larger database so that people from Airbnb can found places for solo traveling by the questionnaire provided by the Ok cupid and enjoy traveling based on their preferences and desires.

However, there has been a substantial change in terms of innovation and improvements in the applications. Some newer features have been added to it such as categorizing the experience into a specific topic like art, food, and more that offers the educational benefit of the app to promote the destination. Moreover, there has evolved more advertisements of the business thus the customers are more aware of its service than they were before. Furthermore, the user experience has been improved by having live updates with destinations like a restaurant to show the waiting time, needs a booking, and the slots available. Moreover, the app has evolved an added feature of check-in upload of the photo that used customer experience and let them contribute to the Airbnb database.

References

Arora, P., and Narula, S. 2018. Linkages between service quality, customer satisfaction, and customer loyalty: a literature review. IUP Journal of Marketing Management, 17(4), p.30.

Austin, E. C. 2020. Business survival growth model (bsgm) canvas vs business model canvas (bmc). European Journal of Business and Innovation Research, 8(1), pp.52-68.

Behdioğlu, S., Acar, E., and Burhan, H.A.2019. Evaluating service quality by fuzzy SERVQUAL: a case study in a physiotherapy and rehabilitation hospital. Total Quality Management & Business Excellence, 30(3-4), pp.301-319.

Chungyalpa, W., Bora, B., and Borah, S. 2016. Business Model Ontology (BMO): An Examination, Analysis, and Evaluation. Journal of Entrepreneurship and Management, 5(1), pp.58-67.

Indrawan, M.I., Nasution, M.D.T.P., Adil, E., and Rossanty, Y. 2016. A Business Model Canvas: Traditional Restaurant “Melayu” in North Sumatra, Indonesia. Bus. Manag. Strateg., 7(2), pp.102-120.

Njau, F.W., Mutungi, M.M., and Mutinda, R. 2019. An Integrated Servqual and Gap Model in Evaluating Customer Satisfaction in Budget Hotels in Nairobi City County, Kenya. International Journal of Current Aspects, 3(II), pp.41-70.

Shi, L., and Wang, Y. 2018. Research on the Business Model of Insurance Companies Developing the Old-Age Care Communities—Taking China Life as an Example. American Journal of Industrial and Business Management, 8(09), p.1928.

Wenzel, P., Mahle, I. and Pätzmann, J.U. 2016. Streaming Services & Service Design: An Analysis of Netflix and Amazon Video Based on the Gap Model by Parasuraman, Berry & Zeithaml. Markenbrand, (5/2016), pp.20-31.

Yang, M., Vladimirova, D., and Evans, S. 2017. Creating and Capturing Value Through Sustainability: The Sustainable Value Analysis Tool A new tool helps companies discover opportunities to create and capture value through sustainability. Research-Technology Management, 60(3), pp.30-39.

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