Mismanagement Control – Zipcar, Starbucks, Airbnb

For the pre-session case report:

• Firstly, I summarized the SWOT for each company based on case and class discussion.
• Secondly, I introduced the steps that I will use these for judging the business plan and business model based on class discussion.
• Finally, I comparied these business plan and business model and tried to rank them into a table.

As we see, each company described its own mission and value proposition and we could build the SWOT analysis for each company. SWOT analysis contains strengths, opportunities, weaknesses and threats. When a company comprehensively considered its own four parts of SWOT, the better a business plan could be presented.  

Zipcar

[pic 1]

Dropbox:

[pic 2]

Business plan for RFD

[pic 3]

Extend Fertility:

[pic 4]

Airbnb:

[pic 5]

• What is the business model?

Simply put, the business model is a profitable business system built around value creation. There are two necessary conditions for a business model to be established: one is to continuously create value; the other is to make continuous profits. However, in a fierce competitive environment, there is no business model that can operate indefinitely. Therefore, according to the changes in the market environment and the development of competition, we must constantly consolidate our own strengths or adjust our business model. When entering a market as a subversive, or breaking into a new field, a new business model can be created to validate its business logic.

A good business model must meet five criteria: accurate positioning, large market, fast expansion, high barriers, and low risk.

1. Positioning.

The most important goal of positioning is to find market segments and provide this market with valuable, unique products that meet customer needs, so that customers are willing to pay for it. When designing the product or service you are preparing to provide, the most critical thing is: What needs do your products meet for the customer? What value does the product itself create for the customer? Why are customers willing to pay for this value? This is the core of product design and the most important result after positioning analysis.

2. The Market.

The key is not to find a market segment to provide the required products and services. The key is to find a fast, large-scale, and continuously growing market. This is a key criterion for determining whether or not it is a good market position.

1. Income expansion.

This is one of the most overlooked issues in the design of many business models. It is also the most critical link in determining whether the model is fast-growing or slow-paced. The size of any company’s revenue is fundamentally dependent on the number of customers and the average customer’s contribution. To achieve rapid growth, we must design various strategies that can quickly increase the number of paying customers, or increase the average customer contribution. From a business practice point of view, what really plays a key role is the expansion of the number of customers. Because if you can't replicate on a large scale, even higher income from a single customer is a loss.

1. Barriers.

Even with the above three points, it is found that there is a high level of industry barriers that cannot be defeated. It can only be Huang Xia's dream and sigh of hope; or anyone can enter this nimble and promising market. Why should you Will it succeed? So, be sure to ask yourself: Why are you and not others? A good business model must be closely integrated with its own unique advantages. The problem that many companies have developed to a certain stage is that they have not considered the barriers of their latecomers and are easily overtaken by others.

1. Risk.

It is to comprehensively assess the various risks that may be faced. It is particularly worth noting that the greatest possibility should be designed to make itself No. 1 in the field to be entered. If you want to take a catch-up strategy from the beginning and it is still difficult to ensure that you are the first, then the best decision is to abandon this target and re-establish a new market segment. An excellent business model should have the greatest possibility of becoming the leader and the owner of the chain, rather than being controlled by others at the beginning of development. The ultimate goal of risk assessment is to identify all possible risks and formulate corresponding countermeasures so that the risks can be controlled and managed. In other words, we must create a business miracle by organically using risks, planning risks and managing risks.

Lack of customer touching – Zipcar, Collabrys and Dropbox

Even though Zipcar had a great business idea and clear mission as a car sharing company to provide cars on-demand, change user lifestyle, convenient and easy to use. Zipcar also described its target customers, but, actually, they didn’t clear show that what their customers’ needs, all plan and problems were just planed out considered by themselves. Comparing to Starbucks, Starbucks eventually kept updating its business plan to make successful. Howard and his team went to Eurpo and had an extremely touch in its local coffee market by observing and stand into customers’ shoes.

Collabrys and Dropbox, they had similar issue on understanding their customers’ needs. Having a similar technological background, the founders themselves considered their technological development more than customers’ needs. Therefore, Zipcar, Collabrys and Dropbox should make its business plan enhances its services and high customer satisfaction through spending more time on understanding the customer and his needs.

No explained solution for risks – Extend Fertility, RFD

Although RFD presents a number of risks, they do not explain any plans to mitigate these risks to preserve company profits. Also, for Extend Fertility case, the company did not mention how to minimize the risk of hurting women’s health when they proceeded to collect their eggs. Furthermore, the business plan did not include the best use time of the storage eggs. If the eggs were expected to keep in years, the quality of eggs could not be ensured. Finally, they did not offer a strong report to state the potential issues of using freezing eggs. 

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