Please note! This essay has been submitted by a student.
Business modelling is a tool that analyses an organization’s ability to create and capture value. Business model canvas is a modelling tool based on Alexander Osterwalder’s Business Model Ontology and provides a comprehensive view of the business logic of an organization (Zolnowski, A. el al. 2014)
Key partners: Key partners of Flipkart are manufacturers, traders, payment companies, investors, lenders and subsidiaries. Major investors in Flipkart are Walmart, SoftBank Group Corp, Naspers Ltd, Tencent Holdings Ltd, Microsoft Corp, eBay Inc, Tiger Global and Accel Partners. Strategic and exclusive tie-ups with manufacturers such as Motorola, Samsung, Lenovo etc and various other manufacturers of goods sold via Flipkart, lenders such as ICICI, payment companies such as Visa and Euronet, subsidiaries such as Myntra, Jabong, Ekart are the other major business partners of Flipkart.
Key activity: Key activity of Flipkart is providing an online marketplace for goods. In relation to this, Flipkart is also engaged in logistics, supply chain optimization, management of customer data and product catalogues, advertising, product development, operation of payment gateway and customer support.
Key Resources: Essential resources for smooth operation of Flipkart’s business are venture capital funds, users (over one hundred million), in house logistics arm of Ekart, strategic partners in brands such as Motorola, Samsung etc., over 20000 highly motivated employees, an app with a user friendly interface and its own payment gateway PayZippy.
Value Propositions: The most important of Flipkart’s values propositions is its exclusive offers on certain products. Cash on delivery, development of in-house products and more than 20 million products make shopping on Flipkart a unique experience. Some 10 million users visit their website and app to choose from an assortment of cheap, quality products from reputed manufacturers and can have them conveniently delivered at their door-step. Over the years, the brand has managed to gain customer trust.
Customer Relationships: Safe and on-time delivery of goods, a 24/7 customer care that is responsive, safe and secure online payment modes, cash on delivery option etc. have enhanced customer relations. The app has personalized shopping for many users. Deals of the day, discounts, initiatives like ‘Big billion day’ have all helped improve upon existing customer relationship levels.
Channels: Flipkart app is the main channel that brings in customers for the firm. Its user-friendly website, e-mail marketing campaigns, database marketing, print and video advertising, blogs, news and knowledge centers have contributed to a burgeoning business for the organization. Exclusive deals mean that original product websites also channel the potential buyer to Flipkart. Word of mouth publicity is another bringer of business.
Customer Segments: Urban, tech-savvy and internet literate are the primary users of Flipkart. Starting as a book seller, Flipkart retains a loyal following of book lovers. Cheap prices have meant that price sensitive buyers flock to their portal for everyday needs. Strategic tie-ups with brands for exclusive sales rights have meant that customers loyal to those brands buy only through Flipkart.
Cost structure: FLipkart has adopted a cost structure that enables it to remain in the upper echelons of the e-commerce industry in India, for years to come. Cost cutting measures such as operating an in house logistics arm and payment gateway has helped it stay relevant in a market that is extremely price sensitive. High discount contracts with manufacturers, employment of state of the art warehousing solutions, streamlined delivery and return process etc. have helped pass on the benefit to end consumer. In house brands have been developed to offer more value at a less price.
Revenue streams: Most of the revenue generated by Flipkart comes from its sale of goods advertised on the web portal it hosts. A portion of the value of sales of a product is obtained by the firm as its fee for hosting the product. Another main source of income are advertisement on the app as well as website of the portal. Product listing ads and promotional activities associated are also sources of revenue. Flipkart Shopper Audience is a contemporary advertising program that leverages company’s understanding of customer behaviour and its vast tranche of user data to effectively market products to a discerning audience, thereby cutting down on arbitrary advertising spending. This is now a major revenue contributor to the company.