This case lays out the steps for creating a Business Model Canvas (BMC)-a comprehensive and intuitive framework intended to facilitate description and discussion of a new venture idea. Focusing on both the efficiency and value generating aspects of a new business, the model directs the founding team members to consider key aspects of a core model, including the company's value proposition, customer relationships, revenue streams, cost structure, and competitive environment. A variation on the model for nonprofit organizations, a Social Impact BMC, is also presented, adding additional items such as impact metrics. The case includes several real world business examples and asks students to prepare a traditional BMC for the for-profit company (Nespresso) and a Social Impact BMC for the social impact example (ConBody) using the tools outlined in the case.
In May 2017 in Chennai, India, the chairman of Celebrity Fashions doubted whether the company could last until the end of the year. Venkatesh Rajagopal had found that the company, a readymade garment manufacturing and exporter he founded in 1989, was hitting hard times financially. It had been dealing with declining revenues for the past five years, and its losses had tripled between 2014-16. A slowdown in factory plant processes in 2006 and the value of the rupee against the dollar, as well as wage arrears, contributed to the financial problem. Rajagopal's son, Vidyuth, had recently joined the company after moving roles both within Celebrity and its sister company, Indian Terrain, and at organizations elsewhere. In 2017, as joint managing director, he was convinced he would be able to turn the company around. Vidyuth, along with the independent director Venky appointed, identified the problems. There were communication gaps on the factory floor, and this caused lags in the shipments of garments and pushed up costs of production. The financial problems had confused some employees, and others were not aware of it at all. The leadership team was not communicating effectively. Would Celebrity be able to cut operational costs, and would Vidyuth be able to get the buy-in from his team to transform the company, and protect his family business?
In May 2017 in Chennai, India, the chairman of Celebrity Fashions doubted whether the company could last until the end of the year. Venkatesh Rajagopal had found that the company, a readymade garment manufacturing and exporter he founded in 1989, was hitting hard times financially. It had been dealing with declining revenues for the past five years, and its losses had tripled between 2014-16. A slowdown in factory plant processes in 2006 and the value of the rupee against the dollar, as well as wage arrears, contributed to the financial problem. Rajagopal's son, Vidyuth, had recently joined the company after moving roles both within Celebrity and its sister company, Indian Terrain, and at organizations elsewhere. In 2017, as joint managing director, he was convinced he would be able to turn the company around. Vidyuth, along with the independent director Venky appointed, identified the problems. There were communication gaps on the factory floor, and this caused lags in the shipments of garments and pushed up costs of production. The financial problems had confused some employees, and others were not aware of it at all. The leadership team was not communicating effectively. Would Celebrity be able to cut operational costs, and would Vidyuth be able to get the buy-in from his team to transform the company, and protect his family business?
In 2007, Twentieth Century Fox faced a number of issues in the production of Avatar-a movie that was widely anticipated but had raised concerns in the production studios. Studio executives doubted the appeal of the plot and worried that audiences would not like the story. The movie needed to create an emotional appeal to attract audiences and make sufficient box office receipts. If the movie could not do this, Avatar would become one of the biggest money losers in the history of the movie industry. The project encountered many challenges in development-particularly in terms of time, budget, and technology, and the decision about whether to continue to invest or to pull the plug was extremely difficult. At what point did the risk become too significant? How should the studio decide when to go forward with a project and when to cancel it?
The Palo Alto Health System had three hospitals, 1,600 physicians, and over 1 million patients each year - and a new risk-based model that incentivized the prevention of illness, as well as early intervention in patients with chronic illness. Engaging with patient populations involved clinical interventions, but also involved a marketing approach to encourage patients to adopt health behaviors and keep following those practices. This case study investigates this marketing aspect of health care, and looks at ways in which Amazon's Alexa, an interactive speaker that connected people to the Internet and the cloud-based Alexa voice service, could enhance health care efforts. With patient permission, Alexa could collect specific health-related information, and could help schedule patients for medical screenings and then report back important laboratory results. One early adopter was the U.K. National Health Service, which contracted to use Alexa to provide health-related content to patients - the same information that was available on the public website. The case study considers health care privacy issues, and asks students to consider whether a marketing approach to health care, in this case using Alexa or another Internet personal assistant, would be a successful strategy for the Palo Alto Health System.
McDonald's newly appointed CEO Chris Kempczinski, who assumed office on November 4, 2019, is the protagonist of the case. With $21 billion in sales (in 2019) and 45,000 restaurants globally (thereof 27,000 in the United States), McDonald's remains the largest quick-service restaurant (QSR) chain. Attempting to be "everything for everybody," McDonald's fell victim to being "stuck-in-middle," without a clear strategic position. Kempczinski must confront several challenges if he is to return the company to its former glory, including: 1) How to balance the need to introduce new items while addressing "menu bloat"? 2) How to re-establish the reputation for quality products? 3) How to appeal to Millennials? 4) How to upgrade the customer experience through all channels and locations (in-store, delivery, and drive-through)? 5) How to reignite growth?
In 2017, the global market for rechargeable lithium-ion (Li-ion) batteries was 126 gigawatt-hours (GWh) valued at $37 billion, growing by $10 billion in two years. Once confined largely to consumer electronics and appliances, the rapid increase in demand was spurred by the adoption of electric cars and buses. Moreover, the falling cost of batteries was sparking interest in another potential huge market-the electrical utility sector. Batteries could be used to store electricity in periods of low demand and release it when demand was high, significantly reducing the need for peak generation capacity. However, historically, the costs of doing this had been prohibitively high. In response to the expected demand, several companies had announced "gigafactories," plants that, combined, could produce many times more output than total global demand in 2017. Tesla, Inc., the electric car maker, was the first. In 2014, it announced a 35 GWh battery plant, costing $5 billion, to be built in Nevada, enough capacity to fulfill global demand in 2013. In 2017, Tesla CEO Elon Musk said he would announce an additional four gigafactory locations to supply the global market. Tesla was not alone in its battery ambitions. In late 2016, start-up Alevo began delivery of its new "GridBank" batteries from a 3.5 million square-foot facility in North Carolina, with the potential to scale to 60 GWh. Alevo claimed its batteries lasted four times longer and were safer than the conventional Li-ion batteries used by Tesla. Anxious not to be reliant on third parties, in 2017, several automakers had announced plans to build battery capacity, including General Motors and Daimler. Indeed, Daimler announced two plants for its Mercedes brand cars, one in Germany and one in China. New start-ups were also entering the fray, with Northvolt AB of Sweden partnering with ABB of Switzerland to build a 32 GWh facility.
Indus Valley Telecom Ltd. (IVTL) wanted to set up an optical fibre cable plant at its subsidiary, Cosmic Equipment Company Ltd. The general manager of IVTL had hired an outside consulting agency that determined that the project was technically viable. Next, in January 2016, the general manager needed to conduct a comprehensive economic viability study of the project before presenting the proposal to IVTL management for approval. The decision of whether to proceed now depended on the outcome of the economic assessment.
Cipla Limited was a pioneer in inhalation therapy in India, and was globally acclaimed for its range of inhalers for obstructive airway diseases such as asthma and chronic obstructive pulmonary disease. In 2014, the company wanted to take inhalation therapy to the masses, especially in the rural and semi-urban areas of the country. This required strengthening its reach at the general practitioner level (among primary care physicians) and extending optimal medical care to patients who were otherwise sub-optimally treated. The company proposed a further increase to the sales and marketing budget, but the head of Cipla Limited’s respiratory division had a different viewpoint. He proposed establishing a lateral structure of doctors as knowledge experts to urge practitioners to adopt inhalation therapy, as he had done in a successful trial in Delhi. The company was looking forward to implementing this second option across the country, but there were various issues to resolve with such an unconventional approach, and challenges were anticipated in the plan’s implementation and expansion.
In January 2017, the owner and founder of Storehouse Tea based in Cleveland, Ohio, was considering the company’s next move. Storehouse Tea focused on providing organic, fair trade certified teas, and the founder was committed to operating her business in a way that would have a positive impact in the world by providing work to local refugees. However, she wondered how she could scale this impact. Among her options, she could introduce product extensions, pursue geographic expansion, target larger accounts, or hire additional employees. But which avenue for growth would best allow Storehouse Tea to further its core mission?
Health Services Software (HSS) was a software company specializing in software for hospitals. Founded by a health care team with first-hand knowledge of the issues facing hospitals, HSS had first mover advantage. At the onset of HSS’s operations, hospitals had capital funding that allowed them to acquire the software with five-year licensing agreements. Five years later in 2016, as the licences were expiring, the hospitals no longer had the capital funding and could not afford a large cash outlay from their operating budgets for a new five-year licence. In light of the change in funding options for the hospitals, HSS was considering whether to move to an annual-subscription-based software. But before the team could establish the prices for the software, they needed to better understand the company’s cost structure. HSS hired a consultant to conduct the costing exercise.
Founded in 2016, DeepMap developed high definition (HD) mapping software and localization services for Level 4+ autonomous vehicles. Traditional navigational maps were accurate to a few meters, which was sufficient for drivers, but not for machine-driven vehicles which required centimeter level accuracy. Autonomous vehicles required a new form of map that was highly precise, produced a 3D representation of the surrounding area, enabled vehicles to locate themselves within the map, provided information for how to navigate safely using the correct rules of the road, and was updated continuously as road conditions changed. DeepMap was not selling a static mapping database, but rather licensing its software under a software-as-a-service model. As a startup with limited resources navigating a nascent market, DeepMap faced uncertainty across several dimensions: the timing of overall AV market adoption, which countries would adopt fastest, which AV segments would move most rapidly, which sensor technologies would become standard, and what impact regulation would have. They also faced the challenge of serving customers on a global scale. As DeepMap looked ahead, it had to decide how and where to focus and allocate its funding in order to achieve its short and long-term objectives.
After the legendary founder of Taiwan Semiconductor Manufacturing Company (TSMC) retired, the new chairman had to grapple with fresh challenges related to its China market. A recently opened factory in China had to find ways to reverse its financial loss and meet its full capacity; one of its major Chinese customers was facing sanctions by the U.S. government; China was investing billions of dollars in building its own powerhouse to compete in semiconductor production. The transition from 4G to 5G technology in the telecommunication industry, and the U.S.-China trade war also added to the uncertainties facing TSMC. What had changed in the competitive landscape for TSMC, and how should it respond to the changes? What were the options for the company in doing business with China, when the country had become both a customer and a competitor?
In the early days of the internet, the author was studying electrical engineering at Stanford, excited by the possibilities of the new technology. Later, working in the San Francisco office of the investment bank Alex. Brown & Sons, he gained an in-depth understanding of how to transform an idea into a corporation. Obsessed with the notion of starting a venture in his native Middle East, he moved to Dubai at age 23. There he saw that Arab youths were having a hard time finding work, while business owners were having a hard time finding workers--and he decided to start an online jobs marketplace to connect them. Fewer than 1% of people in the Arab world had internet access at that time, so clients had to be educated in the smallest details of the online universe. That meant installing the first web browser on many of their computers, training HR managers to dial into the internet, and printing and hand-delivering CVs. Today, with tens of thousands of registered companies and more than 36 million job seekers, Bayt has expanded within the Middle East and beyond, offering solutions including applicant tracking systems, video evaluation programs, and virtual event fairs. And in most of the Middle East, the internet culture it helped establish is thriving.