1. Business Plans & Business Models
Kika Keyboard
Business Plans & Business Models

2. Learning Objectives
Identify the critical roles of marketing research, competitive analysis, consumer-value proposition, and market-entry strategy in the development of a business plan
Critically analyse the role of market research and business planning in running a successful enterprise

3. What is a Business Plans
A business plan is an persuasive document that aims to convince its reader to invest money in a company or a project. The plan must answers the following questions:
Who are you (legal structure, ownership, location, etc.)?
What do you sell (product, service)?
Who do you sell to (customers)?
How do you sell (distribution channels, marketing plan)?
Who is the competition?
What is the roadmap (milestones, timetable)?
How is it made (manufacturing process, suppliers, technology, etc.)?
what are the funding requirements (amount, source of financing)?
what is the expected return on investment (cash flow forecast)?
From

4. Discussion Questions How do you design a business plan？
What components do a business plan involve？

5. Theory Basis: Business model based on Internet
Each firm that exploits the Internet should have an Internet business model—how it plans to make money long term using the Internet
This is a set of Internet-and non-Internet–related activities—that allows a firm to make money using the Internet and to keep the money coming
The profit site to enter, what value to offer customers, which customers to provide the value to, how to price the value, who to charge for it, what strategies to undertake in providing the value, how to provide that value

6. Business Models & Business Plans
A business model needs to answer:
The profit site to enter
what value to offer customers
which customers to provide the value to
how to price the value
who to charge for it
what strategies to undertake in providing the value
how to provide that Value
Finally form the business plan

7. Business Model Map Business Model Profit Site Customer Value Scope
Price
Revenue Sources
Connected Activities
Implementation
Capabilities
Sustainability
Cost Structure
Afuah and Tucci (2003)
Internet
Performance
Environment

8. Profit Site
A firm’s profit site is its location in a value configuration vis-a-vis its suppliers, customers, rivals, potential new entrants and substitutes
A firm’s profit site determines the competitive pressures from rivals, suppliers, customers, potential new entrants, and substitutes

9. Customer Value Proposition
Customers normally buy a product from a firm only if the product offers them something that a competitors’ product does not
The most common value strategies are:
A differentiated product/service focus
A low cost products/service focus

10. Scope
Scope is about the market segments or geographic areas to which the value should be offered as well as how many types of products should be sold
A firm’s task of making decisions on scope is not limited to the choice of market segment
A firm must also decide how much of the needs of the segment it can profitably serve
The Internet makes geographic expansion a great deal more feasible than in the bricks-and-mortar world

11. Revenue Sources The sources of a firm’s revenues and profits
In the bricks-and-mortar world
Many firms receive their revenue sources directly from the products they sell.
Others receive their revenues from selling products and servicing them, with a larger share of their profits coming from the service.
With the Internet, its properties of mediating and network externalities
The mediating property suggests that the revenue model of radio, print, and television media provides useful information for the revenue source of Internet

12. Connected Activities
To deliver value to different customers, a firm must perform a series of the activities that underpin the value
Which Activities need to be Performed?
First, the activities should be consistent with the value that the firm is offering
Second, the activities should reinforce each other
Third, the activities should take advantage of industry success drivers
Fourth, the activities should take advantage of any distinctive capabilities that a firm may have or that it can build
Finally, the activities should be geared toward making the industry more attractive to the firm

13. Implementation
Implementation is to carry out the decisions concerning what value to offer customers, which customers to offer this value to, how to price it, and what activities need to be performed
Implementation shows the relationships between strategy, structure, systems, people, and environment

14. Capabilities Resource: Competencies: Competitive advantage:
Intangible resource and tangible resource
Competencies:
The ability or capacity of a firm to turn its resources into customer value and profits is usually called a capability or competence
A core competence must make an unusually high contribution to the value that customers perceive
Competitive advantage:
A firm’s core competencies allow it to have a competitive advantage because they allow the firm to offer its customers better value than competitors
First, it may be difficult to replicate the historical context in which the capabilities were developed
Second, it may take time to develop these capabilities
Third, it may be very difficult at first to identify the core competence and even more difficult to find out how to copy it

15. Sustainability How to maintain the competitive advantage
Three generic strategies:
Block strategy
Run strategy
Team-up strategy

16. Case study: KIKA Keyboard
KIKA is now focusing on "the next generation keyboard” for mobile phone aiming at the international market
KIKA was launched on December And it has been applied by 50,000,000 users in more than 140 countries now
The company’s CEO, Hu Xinyong, has worked for 2 international companies, one was called Skymobi, the other was Tom.com. KIKA is his first start-up
A few words about what TouchPal is

17. Case study: KIKA Keyboard
In their own words:
I think there are 2 things that can contribute to human development. One is input, the other is output. What we are concentrating on is the output. All in all, our mission is to make the world better
The first one, which is also the core of a company, is great dream. We find that Chinese entrepreneurs are not good at expressing themselves and their great dream, while American entrepreneurs are good at that. The second point to be a great company is that the company should keep its promises. If a company is driven by great dream and keeps promises as well, the company can grow larger
This is from their website, it frames the next questions.

18. Pre-Video Discussion What should a business plan consider？
What would you consider to be the core skills needed to start a successful business?

19. Video
Embed/show video

20. Case Study Discussion Questions
Draw the business model map for Kika keyboard
What is the consumer-value proposition of Kika keyboard?
How does Kika conduct their marketing research?
Hoes does Kika consider its competitors?
What is the main strategy of Kika to maintain its competitive advantage?

21. References
Afuah, A., Tucci, C.L. (2003) Internet Business Models and Strategies: text and Cases, The McGraw-Hill Companies.