9/10/2018

BUSINESS MODEL INNOVATION – BUSINESS MODEL CANVAS

PGDM BATCH 2020 | SECTION B | APO GROUP 6

 Business Model Innovation – Business Model Canvas

THE STARTUP- ARCATRON MOBILITY PRIVATE LIMITED

The group chose to work with a start-up called Arcatron Mobility.

The startup revolutionized the “assisted living” industry with their design of a mobility device when in
2011 they initiated this idea to use technology in the art of caregiving in the form of Arcatron Mobility
Private Limited. The startup was found by 4 engineers – Kunal Kamble, Ganesh Sonawane, Dewaj Baruah
and Laxmikant Banjarey.

The fundamental goal of the company was to launch a product that enabled the consumer to bathe and
use the washroom safely and if possible, independently, without much human intervention. In the
words of Ganesh Sonawane, their main aim was to make washroom access easier and safer for both the
wheelchair users and their caregivers.

PROBLEM STATEMENT

This startup analyzed one of the biggest challenges faced by people routinely - to get locomotive
assistance especially during the usage of restrooms. The analysis listed the following major problems
faced by people on a regular basis as under:
 Physically entering in washroom
 Getting oneself injured due to slipperier conditions in the bathroom
 Immobility while using commode
 Unavailability of a reliable support along with hygiene & suitable customizations.

SOLUTION

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The startup created a unique design of a wheelchair - one chair for all bathroom needs – through which
both shower and commode could be accessed using it as a regular wheelchair. The chair includes a
detachable seat which can fit over the commode to switch its functionality. It is a self-propelled
wheelchair which is portable and can be fit in a single suitcase.

BUSINESS MODEL CANVAS

Our primary research on the startup comprised of online research as well as consistent dialogues with
one of the founders of the organization – Mr. Laxmikant Banjarey.

The 9 building blocks of the canvas are discussed in the further sections.

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CUSTOMERS AND CUSTOMER SEGMENTS

The start-up primarily works in the industry of assisted living. Hence their main focus is on the elderly
and disabled individuals. The startup mainly targets the people related to the following segments (the
people might be related in the form of the need based individuals or the caregivers or the companies
that focus on these two):
 Hospitals
 Old Age Homes
 Clinics
 Commercial and rental usage
 Households
 Homecare companies

Thus, the specific market segment chosen by the startup revolves around the disabled and elderly and
their facilitators.

CUSTOMER VALUE PROPOSITION

In terms of customer value proposition, Arcatron Mobility provides the following unique selling points:

1) Newness: It’s a first of its kind in India. According to the founders of the company, even though
there are companies like Ottobock and Invacare which provide wheelchairs alongside the

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wheelchair industry in China, the options available before Arcatron weren’t either compatible
with the Indian infrastructure (for instance, the Indian style toilet seat instead of the western
style told seat) or weren’t perceived as safe by the users. This design was one of its own kind
and completely new for the Indian market.
2) Cost: Initially the product was priced at around INR 20000 but it was brought down to the range
of INR 11000 for the customers. An average wheelchair of this sort outside costed more than
INR 40000-50000 and hence the cost was a main attraction point.
3) Portability: The aim of the design was “packed in a single suitcase” wheelchair. The chair is
portable and can be carried anywhere with ease.
4) Usage: The wheelchair could be used both in a shower and commode format which eased the
qualms of the elderly and the handicapped.
5) Terrain Compliant: The chair comes in an all-terrain mobile format for rough and smooth
surfaces alike.
6) Ease of Usage: The chair provided both an option for self-propelling and attendant-propelling
thus giving the users independent access without any apprehensions and also eased the job of
the attendants and caregivers.
7) Safety: The chair also provided easy rolling over to the bed or commode seat because of its
design and dimensions, thus making it very safe for the users.

CHANNELS

Arcatron Mobility Private Limited makes use of both physical and digital channels to facilitate their
operations – through both their owned channels as well as partnership based channels.
 Awareness: For spreading awareness, the startup has been tapping both online and offline
channels. The online channels include their promotions on social media, their own blogs and
website. This also includes their presence through the media networks like HT, Times Of India
and others. The physical channels include the startup forums and community outreach
programs where they pitch their ideas.
 Sales and Service: The sales and services can be divided into two categories: Direct Channels like
the sales force and web sales, and the indirect channels - which include own stores and
franchisees.
The start-up has been tapping online channels in the forms E-commerce companies such as

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Amazon, Snapdeal, IndiaMart. The E-commerce companies purchase the product from the start-
up on the credit basis & store it into their own warehouses. It is also investing in offline channels
to deliver the distribution network. For offline channels, they have tied-up with around 50
hospitals and clinics, 1 homecare company called the Knightingale Co. and 30-40 NGOs and old
age homes.

It evaluates its promotion on the basis of analysis of small sample taken. Most of the product is
purchased from the digital social platform.

CUSTOMER RELATIONS

In terms of customer relations, the following has been done in two phases:

1) Customer Acquisition: This has been facilitated via creating buzzes on social media, the blog and
community programs as well as pitching of ideas through startup forums and demo facilities.
This has also been taken care of via the tie-ups with hospitals, NGOs, clinics and homecare
companies.
2) Customer Retention: The company has focused a lot on customer retention through the
following ways:
 Dedicated Personal Assistance – They have tied up with homecare assistants and
provided them as personal assistants to the users
 24*7 helpline- The company has a 24 hour helpline to hear customer grievances and
feedback to improve upon their products
 Customization: They also let their customers co-create the wheelchair by including their
customizations according to the specific needs of their customers

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REVENUE STREAM

In the current scenario, the startup has introduced three price ranges:
1) Approximately INR 10000 in the low-range division.
2) INR 25000 in the medium-range division
3) INR 40000 in the premium division

Furthermore, the company is not charging any subscription fees but they plan to introduce this feature
in the next 6 months. The enterprise also earns revenue in the form of lending and rentals and it is here
in this business stream, that they plan to introduce the subscription fee charges.
They also follow the dynamic pricing method which depends on the current maintenance contracts.
Our recommendation to the startup is to do away with the dynamic pricing and adopt fixed pricing
strategy since their product is of a high utility and not a luxury item and the fixed pricing method would
help them gain and enhance customer trust.

KEY RESOURCES

The key resources of any organization are the assets which form the building blocks governing the
business model and its working. The assets can be classified as under:
1) Physical Assets: These comprise of manufacturing facilities, design office, corporate office and
others. For Arcatron, the manufacturing facility has been facilitated through outsourcing
whereas other facilities like the design and corporate offices have been taken on lease.
2) Financial Assets: These include the funds provided by angel investors and venture capitalists.
This also includes the owners’ equity. For long term vision, ESOP (Employee Stock Ownership
Plan) has also been incorporated for employees.
3) Intellectual Assets: These include the utility patents which govern the use of the product only
for caregiving and not for commercial purpose by the buyers. Further more, the company has
acquired design patents and copyrights as well.

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4) Human Resource Assets: These include the staff from different departments such as marketing,
finance, operations, technical and human resources. As of now, the company boasts of 16-20
human resource assets in total.

KEY ACTIVITIES

The key activities taken up by the startup include the following:

The enterprise does R&D to enhance its product. Later on the design team tries to optimize its product.
The manufacturing of the product takes out at an outsourced facility. The product manufactured is
delivered to the distributors. The start-up visits to many forums for idea pitching as well as establishing
networks.
1) Production: In the production phase, the activities and functions involve:
 Designing and R&D: The startup draws an initial design and does intense R&D to
develop new and enhance existing products. The design team tries to optimize the
design based on R&D analysis
 Making and Manufacturing: The manufacturing of the product takes place at an
outsourced facility
 Delivering: The manufactured product is then taken to the distributors for further
sales
2) Problem-Solving: The team of engineers always strives to solve the problems based on the
repetitive feedbacks gained from the customers and caregivers. This phase also involves
customer relation activities such as providing efficient commencement and maintenance
service to the customers
3) Platofrm/Networking: The startup visits many forums to pitch their ideas and establish
partners and networks to sustain and expand their business.

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KEY PARTNERS

For a business model to sustain, they have to form alliances and parterships with various other entities
which significantly help the business, at different places and periods.
 For Arcatron Mobility Private Limited, the supplier of raw materials and spare parts provide it
with inward logistics
 For clearances and licensing from government to carry out the business operations, the startup
follows the processes mentioned by the government as well as the startup supporting
authorities of the government – the DIPP. This body shortlisted the idea and further provided
them with the facility of an incubator
 The startup pitched themselves on many forums, thus winning awards and fundings from
notable angel investors -Sudhir Mehta, Harish Mehta and Ketan Dalal from the Indian Angel
Network
 Alongside angel investors, industry leaders like Google Cloud Platform, Microsoft and Autodesk
also have provided the initial funding for the startup
 The company uses courier service to deliver its product to the distributor such as FEDEX and DHL
 Amongst media houses, the company has established good connections with the The Hindu,
TOI, HT and KnowStartup due to their innovative ideas

COST STRUCTURE

The key cost structure components include:

1) In terms of key resources, the most expensive are the human resources required for the
company - the main workforce of which is technical R&D engineers.
2) The most expensive key activity is manufacturing. The startup outsources the manufacturing
component and this adds up to their costs and forms a major part of their expenses.
3) The most significant cost of the business is R&D and infrastructure.

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The start-up has chosen a value-driven business model presently and it aims for a cost-driven business
model in the long term scenario. Owing to confidentiality and legal hassles, the quantitative figures of
the startup have been kept undisclosed by the founders.
With respect to economies of scale, the start-up is currently producing 80-90 units monthly & it has
estimated that the cost can be reduced by 60-70% if they tries to manufacture around 1000-1500 units
monthly with the help of cost optimization.

CONCLUSION

A budding startup, Arcatron Mobility can do much better by marketing their product but for this they
need to increase their funding and revenue streams. Our major recommendation to the startup is to
change their pricing strategy from dynamic pricing to fixed pricing since theirs is a high utility product
and fixed pricing will gain customer trust as well as constant source of revenues.

SOURCES

1) http://arcatron.com/arcatron-shower-wheelchair/
2) http://arcatron.com/arcatron-a-debut-on-wheels/
3) https://economictimes.indiatimes.com/small-biz/startups/features/reinventing-the-wheelchair-
how-arcatron-mobility-is-innovating-to-address-mobility-challenge/articleshow/62439968.cms
4) http://myfrido.com/
5) https://www.thehindubusinessline.com/info-tech/arcatron-mobility-raises-funds-from-indian-
angel-network/article9762167.ece