SM/NITK/Oct2018 1

SM/NITK/Oct2018 2
These companies failed to adjust their business
models to the changing environment around
them.
Companies’ long term competitive success depends
upon its ability to create an innovative business
model.

SM/NITK/Oct2018 3
 A recent study, “Entrepreneurial India,” by the IBM Institute for Business Value
and Oxford Economics (2017) found that 90% of Indian startups fail within the
first five years.

 And the most common reason for failure is lack of innovation — 77% of
venture capitalists surveyed believe that Indian startups lack new technologies
or unique business models.

“Since 2015, as many as 1,503 startups have closed down in India. And the major
reason is due to the replication of Western business models, and not lack of
subsequent funding from the investors,” - Rishabh Lawania, founder of Xeler8, a
market intelligence platform recently acquired by a Chinese venture capital
firm.

 The highest number of failures were in logistics, e-commerce and food

technology.
SM/NITK/Oct2018 4
 Idea
 Not much idea about the ground reality
 No much background in the area of start ups
 Money-
 Western start-ups' start with money from friends
and family
 Indian start-ups' rely on VCs.
 No much constraints on accessing VC money
 Indian start-ups’ donot tap banking/ government
assistance
SM/NITK/Oct2018 5
 Talent
 Western start-ups’ vs Indian start-ups’
 Gap between employer and employee
 Difficult to get talented employees

SM/NITK/Oct2018 6
 Tomorrow’s competitive advantage of
companies will not be based on innovative
products and processes, but on innovative
business models.

SM/NITK/Oct2018 7
business
model
“A business model describes the
rationale of how an organization
creates, delivers, and captures value”

4
SM/NITK/Oct2018 8
 building
blocks
9
SM/NITK/Oct2018 9
Customer Segments
•Mass market
•Niche Market
•Segmented
•Diversified

For whom are we creating value? Who are our

most important customers?

10
SM/NITK/Oct2018 10
 Value Proposition

Rolls Royce
What customer needs are we satisfying? Rolex
What value do we deliver to the customer? Fedex

11
SM/NITK/Oct2018 11
 Channels

how does each customer segment want to be reached?

through which interaction points?

12
SM/NITK/Oct2018 12
 Customer Relationships

what relationships are you establishing with each segment?

personal? automated? Co-creation?

13
SM/NITK/Oct2018 13
 Revenue Streams

what are customers really willing to pay for? how?

are you generating transactional or recurring revenues?
Rolls Royce-”Power by Hour” model
14
SM/NITK/Oct2018 14
 Key Resources

which resources underpin your business model?

which assets are essential?

15
SM/NITK/Oct2018 15
 Key Activities

which activities do you need to perform well in

your business model? what is crucial?

16
SM/NITK/Oct2018 16
 Key Partners

which partners and suppliers leverage your model? Story of iPod

who do you need to rely on?
Starbucks and Alibaba
17
SM/NITK/Oct2018 17
 Cost Structure

what is the resulting cost structure?

which key elements drive your costs?

18
SM/NITK/Oct2018 18
Business Model Canvas

19
SM/NITK/Oct2018 19
 Your Business Model Canvas
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

20
SM/NITK/Oct2018 20
EXAMPLES
EXAMPLES

21
SM/NITK/Oct2018 21
 Example 1 Example 2

Refreshing lemonade to joggers Affordable VOIP calls

at public parks

22
SM/NITK/Oct2018 22
Kelly’s Lemonade Stand: Refreshing Lemonade
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

23
SM/NITK/Oct2018 23
 Skype
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

24
SM/NITK/Oct2018 24
Example 3 Example 4

Photo sharing online Smooth shave for men & women

25
SM/NITK/Oct2018 25
 Flickr: Photo Sharing
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

26
SM/NITK/Oct2018 26
 Gillette: Razors & Blades
KEY KEY VALUE RELATIONSHIPS CUSTOMER
PARTNERS ACTIVITIES PROPOSITION SEGMENT

KEY
RESOURCES CHANNELS

COST STRUCTURE REVENUE STREAMS

27
SM/NITK/Oct2018 27
SM/NITK/Oct2018 28
SM/NITK/Oct2018 29
30

 Entrepreneurial marketing is less about a single

marketing strategy and more about a marketing
spirit that differentiates itself from traditional
marketing practices.
 The most common features of entrepreneurial
marketing include innovation, risk taking, and being
proactive.

SM/NITK/Oct2018 30
 Dell Computers: A Case Study in
Entrepreneurial Marketing
31

 In 1984, a college student named Michael Dell decided to found a computer company.
Today it is one of the largest and best known computer companies in the world. Below
are some of the steps that Dell took in its earliest stages to get noticed in the computer
market.
 Define your customers – Dell realized early that there was a hole in the market for
customized business computers. Their first products were marketed to large and
midsized companies looking to purchase many computers at once.

 Offer something new – In the early 80s, computers were bought and sold primarily
through retail stores. Dell took the then radical step of selling directly to consumers,
cutting out the retail middle man.
 Go to where the customers are – Dell marketed at electronics trade shows, in trade
magazines, and in other avenues that corporate technology officers would follow.
Advertising messages highlighted the ways that Dell computers were optimized for
business customers.
 Offer exceptional services – Dell offered 24 hour technical support to all of its
customers. This was a valuable service to customers who were only beginning to
integrate computers into their businesses.

SM/NITK/Oct2018 31
 Be focused and persistent
32

Sarathbabu- Food King

 Born in a slum in
Madipakkam, Chennai
 Got rejected by IIM-A twice
for low CAT scores
 After initial failures, he now
runs a chain of restaurants
all around the country
called- Foodking

SM/NITK/Oct2018 32
 Be ambitious
33

 1971- worked as a part time journalist for

Ravindra Kishore “Searchlight”
1973- he was kicked out of his job.
Sinha 

 Helped a friend in getting a security guard.

 First year- 250 security guards working for him-
turnover of Rs. 1 lakh.
 Security and Intelligence Services India Ltd
started in a garage with an investment of Rs.
250.
 2005- turnover was Rs.25 crore.
 2014- acquired a Australian company for Rs.
1000 crores.
 Has more than 3000 large clients in India and
abroad.
 Present turnover- Rs. 3000 crore.

SM/NITK/Oct2018 33
 Get into unexplored markets
34

 Hailed from a small village near Waynadu,

Kerala.
P C Musthafa
 School dropout once, now owns a 100 crore
company.
 Started a small idli & dosa batter preparing
company in a small house in Bangalore with
an investment of Rs 25000, two grinders, a
mixer a sealing machine.
 Initial target was to sell 10 packets /day in
20 stores.
 Within nine months, they started selling 100
packets a day.
 Expanded to Mangaluru, Chennai, Pune,
Mumbai, Hyderabad and Dubai.
 Production of 50000 packets a day,
employing 1100 workers

SM/NITK/Oct2018 34
 Positive attitude
35

 After a broken marriage decided

to stand on her own feet by
selling pickles, squashes and jams.
 In 1982, put up a small mobile
canteen in Marina Beach,
Chennai. First day’s income was
50 paise!
 Got an offer to run canteens for
Slum Clearance Board, Bank of
Madurai and National Port
Management Training School.
 In 2004, started the first
restaurant “Sandeepha”
FICCI Entrepreneur of the Year

Award 2013. Patricia Narayan
SM/NITK/Oct2018 35
 Think innovatively…
36

 Came up with an idea

of producing furnitures
with concrete.
 Initially, the firm was
producing only door
frames with concrete.
 Now they have a vast
product line that includes
stair cases, benches,
windw frames, tables,
cots, ceilings, panels etc. Mr. Ananda Kumar, Puttur

SM/NITK/Oct2018 36
 Some marketing tips
37

 People always buy the benefit not the features.

 Listen to the customer
 Harness technology in production as well as
reaching the customer.
 Marketing activities of small companies with limited
access to resources should focus on:
 Creativity and simplicity (for example Guerilla
Marketing)

SM/NITK/Oct2018 37
 Guerilla marketing
38

 It is also called as low budget marketing

 Maximum attention of the target group
 in spite of a low budget
 through inventive and fancy ideas
 Execution of Guerilla-Marketing
by surprise
 efficiently

 in a rebellious and unorthodox manner

Ex: Coca-Cola, Coke vending machines, Volvo

SM/NITK/Oct2018 38
 Coke
 Volvo

SM/NITK/Oct2018 39
 Rely on market research for decision making
 Understand the market well.
 Simple but clear product features
 Harness technology in production as well as reaching
the customer.
 Search for and claim a new and unoccupied position:
light beer, lemon dish soap, gold, platinum, or
titanium credit cards, etc.
SM/NITK/Oct2018 40
41
SM/NITK/Oct2018 41
 Learnt coding at the age of 8.

 Spent most of the student life running

behind and interacting with
entrepreneurs.

 At the age of 16 wrote a best seller

book “Indian Engineering Colleges: A
Complete Encyclopaedia of Top 100
Engineering Colleges’.

 Started his first venture ‘Oravel Stays’

in 2012 and secured funding of Rs
30 lakhs from VentureNursery

 2013- launched Oyo Rooms which

now is a 360 crore venture

SM/NITK/Oct2018 42
 Ipod and iTunes were not created by
Steve Jobs.
 Tony Fadell, an IT freelancer approached
Apple with an idea.
 Later, a team of 35, including Apple
employees, design firm IDEO,
Connectix, General Magic, WebTV and
Philips developed the prototype.
 Technical design was provided by the
consortia of Toshiba, Texas Instruments
and Wolfson.
SM/NITK/Oct2018 43