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Business Model Canvas - MAS Arina (2020988687)

Tourism Management (Universiti Teknologi MARA)

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BUSINESS MODEL CANVAS

PRINCIPLES OF ENTREPRENEURSHIP (ENT530) : BUSINESS MODEL CANVAS

FACULTY & PROGRAMME : Faculty of Hotel and Tourism Management


Tourism Management
SEMESTER : 3
PROJECT TITLE : Le Boba Milk Tea
NAME : Mas Arina Binti Mohd Effendi
LECTURER : Madam Nur Syuhada Binti Muhammad

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ACKNOWLEDGEMENT

Assalamualaikum,

I would like to express my gratitude and appreciation to lecturer Madam Nur Syuhada and
also my beloved classmates that have motivate me to complete this assignment. A special
thanks to my ENT530 lecturer, Madam Nur Syuhada Binti Muhammad whose help, guidance
and encouragement, helped me to coordinate this assignment including writing this Business
Model Canvas.
This Business Model Canvas have helped me to have another perspectives of being an
entrepreneurship, though being one is not easy, but Business Model Canvas (BMC) is a
perfect way for a new businesses to venture into new ideas in order to open up or expanding
a business. This assignment have guided me to think of a new idea to grab the consumers’
attention and how to create new ideas.
Last but not least, many thanks to my family for the supports that have helped me completing
this assignment directly or indirectly.

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TABLE OF CONTENT
PAGE
TITLE PAGE i
ANKNOWLEDGEMENT ii
TABLE OF CONTENT iii
EXECUTIVE SUMMARY iv

1. INTRODUCTION
1.1 Company Background 1
1.2 Problem Statement
1.3 SWOT analysis (two competitors)
1.4 Opportunity recognition 2
1.5 Purpose of business model canvas preparation

2. BUSINESS PROPOSAL
2.1 Business Model Canvas (BMC) 3
2.2 Details of BMC 4

3. CONCLUSION 15
4. APPENDICES 17

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EXECUTIVE SUMMARY

Nowadays milk tea is quite famous among the citizen in Malaysia especially teenagers.
People likes to drink something sweet and unique, so that is why Le Boba have decided
to produce milk tea drinks in UiTM Bandaraya Melaka. This is an individual entrepreneur
business owned by Mas Arina Binti Mohd Effendi. Le Boba offers two types of toppings,
there are a few options for topping such as black pearl and jelly.

The business is located at Tun Mutahir College. The location is really strategic because
students are often study and going in and out from the college to get the food as there
are no restaurant or foodcourt available in the collage. Furthermore, UiTM Bandaraya
Campus is a also one of the strategic location because it is a one stop centre for students
and staff, while they pass by they can grab a cup of milk tea and drink it on the go. If the
customers want to get any informations about the product or service, they can visit Le
Boba’s media social. Social Media apps such as Instagram, WhatsApp and also
Facebook are used to boost about the product. Customers can find out about our daily
informations or updates through the tips of their fingers.

The value proposition that Le Boba practices for the drinks are its price. The drinks are
affordable. There are two different sizes of cups which are regular and large which cost
RM 3 for regular cup and RM 5 for large cup. Delivery service which is cash on delivery
or COD are also provided. Le Boba will take the order first and then uses the runner to
deliver drink later. Customers can pay after they get the drink. Only RM 1 will be charge
for each purchase of 5 cups of drinks per delivery. For the payment only cash are
acceptable because it is more convenience and quick.

As young entrepreneur, I must try my best to conduct this business. Le Boba will improve
marketing relationship from time to time in order to enhance the business performances.
Besides, entrepreneurship skills also plays an important role.

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1. INTRODUCTION

1.1 COMPANY BACKGROUND

This company’s business name is Le Boba means bubbles, which describes the product of this
businesses, boba drinks with main flavour, milk tea but have the idea of expanding with
varieties of flavours. Our main product is focused on the drink which people, especially
youngsters who prefer this drink because it is very popular in Taiwan. In Malaysia, the number
of many brands that sells the beverage has grown to over 50. For more information, boba drinks
are also well received by some foreign countries in North America as such, most of the areas
with high population of Chinese and Taiwanese. Our company offers this kind of drink but with
Malaysia’s all-time favourite milk tea version.

1.2 PROBLEM STATEMENT

• Healthier version of the boba milk tea drink

• Brands such as TeaLive, XinFuTang which offers a higher price

• Packaging which is easy to grab and go.

• Nearest location that can reach the target market which is, students

1.3 SWOT ANALYSIS

Company or brands such as TeaLive and XinFuTang are among the two competitors which
also produced boba drinks. These two brands are well-known among people, consumers who
prefer their drinks is because of the brand itself. They have a very strong recognition and also
produce many different kinds of drinks besides than boba milk tea. However, they offer the
drinks with a higher price, approximately RM13 and above. Consumers might purchase the
drinks only once in a while due to the high price offered. Besides, it is also far away from where
the students could reach. Students mostly spent their weekend in the mall which where the
brands are located. Le Boba have the opportunity to grab the consumer’s attention as the target
market is students and staffs from UiTM Bandaraya Melaka. Though, there are also other
students from nearby college.

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1.4 OPPORTUNITY RECOGNITION.

As we all know, consumers have different choices. Opportunity recognition is a process that’s found
in the way that the individuals and also the businesses that have entrepreneurship mindset to
approach any business venture or ideas. Thus, new and improved ways are amongst the idea in order
to create a new business to improve the customers’ needs and expectation. It is very important in
order to help the business to stay relevant and to become successful in a long-term. Le Boba’s target
market is mostly students, the located preferred is at Tun Mutahir College because students often
spend their time studying at the table provided in the ground floor. Also, there are no nearby stalls for
the students to grab some drinks upon arriving at the college from the class. Our company have the
opportunity recognition to boost the product among students.

1.5 PURPOSE OF BUSINESS MODEL CANVAS PREPARATION

One personal selling objective that a small business sale must meet is search and identifying
the potential customers who are likely to have any interest in our products or services, as well
as the authority to make purchases.

The long-term objective of our drinks selling is building relationships to prevent customer
attrition and increase repeat business. We will do this in varies ways such as following up with a
customer to check that the drinks reach the customer expectation, handling issues in a quick and
efficient manner, providing training and making ourselves readily available to answer
questions. We also offer customer additional value such as regular updates about menu
changes, new products and services.

Next, Le Boba also target to achieve our target in getting some profits. Profit objective, here, is
the percentage of gross profit to be earned on the sales.

As a seller also want to expand our volume of orders. Le Boba hope that our drink will become
famous and well known. So, our company can increase our product as demand increase. Our
company can also gain more profit as the volume increases.

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2. BUSINESS PROPOSAL

2.1 BUSINESS MODEL CANVAS (BMC)

they Partners Key Activities Value Propositions Customer Customer


Relationships Segments
Partnership • Price • Less ingredient • Local events
Suppliers • Marketing • Affordable • Students
• Community based
• Innovation • Small • Small niche
community
• Branding maintenance
• Locals
• Save time
Key Resources Channels

• Knowledge • Marketing
• Management Instagram
• Shop lot Facebook

• Capital Poster
• Delivery

Cost Structure Revenue Streams

• Ingredients • Cash payment

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2.2 Details of BMC

1. CUSTOMER SEGMENTS

Customer segments are the community of customers or businesses that you are aiming to sell
your product or services. Every company needs profitable customers in order to survive.
Customers can be segmented into distinct groups based on their needs, behaviors and other
traits that they share. A customer segment may also be defined through demographics such
as age, ethnicity, profession, gender or on their psychographic factors such as spending
behavior, interests, and motivations.

Types of customer segments:

• A mass market
Focuses on a large group of customers without really distinguishing between different
types of customers, and aims to satisfy a set of broadly similar needs and problems.
• A niche market
Refers to a customer segment with extremely defined characteristics and very
particular needs. This segment requires, or rather expects, a highly tailored product,
custom made to suit their needs.
• Segmented market
Refers to some businesses chooses to provide products and services to customer
segments which may have very minimum variations in their needs and requirements.
The organization creates different value propositions, distribution channels and
customer relationships according to these small differences in the customer segments.
• A diversified market
Similar to the segmented market except that it is utilized to entirely a different sets of
value propositions to cater the unrelated customer segments rather than just slightly
altering the product.
• Multi-sided market
Serve interdependent customer segments. For example, a credit card company
interacts with both the card holder, and the merchants who accept those cards.

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The customer segments that is chosen by the business is the niche market which are UiTM
Bandaraya Melaka students and staffs.

It would be a best seller since the drinks are not something that is sold in the campus or food
courts. The product also have been getting a great demand and are in trend nowadays. The
nearest place for the students to get the same product would be from AEON Bandaraya
Melaka from brands like TeaLive, Cool Blog and Royaltea that are 15 minutes away from UiTM
Bandaraya Melaka. Besides the students, our target customers are also the staffs from UiTM
Bandaraya Melaka. The staffs can buy it during their lunch hours or at night in the Tun Mutahir
College or by the campus.

The price of the drinks are affordable for not only the staffs but also to the students. It costs
RM 3 for a regular cup and RM 5 for a large cup. Only high quality ingredients are used in
order to provide the customers with the best quality drinks and get their satisfactions. The
drinks are packed conveniently to fit our customers busy life schedule so they can always grab
it on the go and fast.

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2. VALUE PROPOSITIONS

A value proposition refers to the value the company promise to deliver to the customers and
why should they choose to buy their product. It can be presented as a business or marketing
statement that company uses to summarize why a consumer should buy the drinks. This
statement, if worded compellingly, convinces a potential customer that one particular product
or service that the company offers will add more value or give them a satisfaction than other
similar offerings will.

A value proposition stands as a promise by company to a customer or market segment. The


proposition is an easy-to-understand reason why a customer should buy the product. A value
proposition should clearly explain how a product fills a need, communicate the specifics of its
added benefit and state the reason why it is better than similar products on the market. The
ideal value proposition is to the point and appeals to a customer's strongest decision- making
drivers.

The first value proposition that we practice for the drinks are our price. The price is very
affordable to the customers. We have 2 different sizes of cups. The size of a regular cup is
RM 3 and RM 5 for a large cup. It is reasonable and affordable compared to other brands like
TeaLive or Cool Blog that their prices are much higher than the company’s drinks.

The second value is the quality of our drinks. Le Boba can assure the customers with high
satisfaction for every cups of the drinks. This is because only quality ingredients are being used
in the drinks. Some of the ingredients used are Lipton’s black tea and black pearl from trusted
supplier, Moko Moko Supply.

Next, the convenient of the packaging will attract customers that have a busy schedule on their
daily basis. The packaging will help the customers to get their drinks on the go and fast. The
drinks will be packed in a plastic cup.

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3. CHANNELS

A distribution channel is a chain of businesses or intermediaries through which a good or


service passes until it reaches the final buyer or the end consumer. Distribution channels can
include wholesalers, retailers, distributors, and also the internet.It is the path by which all
goods and services must travel to arrive the intended consumer. It also describes the pathway
payments that are made from the end consumer to the original vendor. Distribution channels
can be short or long, and depend on the numbers of intermediaries required to deliver a
product or service.

Goods and services sometimes made their way to consumers through multiple channels.
Increasing the number of ways, a consumer is able to find a good can increase in the sales.
But it can also create a complex system that sometimes makes distribution management
difficult. Longer distribution channels can also mean less profit because each intermediary
charges a manufacturer for its services.

Le Boba’s business uses social media as the main channel. Le Boba are using Instagram,
WhatsApp and also Facebook. The company also sometimes publish our advertisements on
UiTM’s official pages. Customers can find out about Le Boba’s daily information or updates
through the tip of their fingers. It will also be easier to the customers and alert them faster about
the daily promotions or business updates.

Furthermore, Le Boba also provide delivery services to the students. The company offer a
delivery services for every 5 cups and upwards purchases. For every delivery services, only
charged RM 1 which are reasonable for a delivery to their rooms.

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4. CUSTOMER RELATIONSHIPS

Customer relationships can be defined as the development of ongoing connection between a


business and its customers. When it comes to increasing profits, it means to make new sales
or gaining bigger accounts. In order to strengthen relationships with customers for a long-term
business success, it is essential for a business to have a positive effect on the customer. The
objective is not only to gain a handsome profit but maintaining the customer relationships could
keep the business thriving and getting regular customers and helped to build a reputable and
trusted brand.

The relationships between a business and customers involves marketing communications,


sales support as well as customer service. This relationship is measured by the satisfaction of
the customers through the sales and product lifecycle. It is not easy to gain customers’
attention that will eventually retain them. However, there are some ways for our business to
maintaining and strengthen the customer relationships.

Let the customers know that we care because caring is an excellent way to let the customers
know that they are important and are our main priorities. For example, effective follow-up with
customers straight away after a sale such as saying “Thank You” and find out whether that the
customers are pleased with the drinks. This is to ensure that the business is always in the
customer’s mind. Once the customers see that we are being authentic in showing how much
we care for the customers, they will trust with our products.

The next way to have a good customer relationship is to give reward to the customers. Regular
and loyal customers are very worth rewarding. For instance, develop a loyalty card or
membership to show our appreciation and respect for being our loyal customers. With the
loyalty card or membership provided to our customers, they could gain a lot of benefits for
example buy 1 drink, free 1 drink when they constantly purchasing our drinks. When they feel
appreciated and rewarded, this will make them trust our product better.

Last but not least is to make personal approach. Being able to remember details such as a
customer’s favourite flavours or their names can mean a lot, this will not only make the
customer feel appreciated but it also ensures that the customers feel valued, known and
understood. One of the ways is to do notes or reminders based on the regular customer’s
preference or likes. When a customer regularly purchases the products, this means that the
company’s customer relationships is indeed very strong.

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5. REVENUE STREAMS

A revenue stream is a source revenue of a company or organization. In business, a revenue


stream is generally made up of either recurring revenue, transaction-based revenue,
transaction-based revenue, project revenue, or service revenue. In government, the term
revenue stream often refers to different types of taxes.

• Transaction based revenue


These revenues based on predictable sales of goods. Revenue is earned by a transaction
from a customer. For example, a customer in a clothing store, buying a new jacket, generates
a transaction based revenue. This type of revenue is often considered less attractive than the
recurring model because an action is required to attract customers.
In our business we use cash payment for transaction based revenue. Cash payment is an
immediate payment in cash. For example, customers come to our shop at Laman Perdana
Uitm Permatang Pauh, buy our drinks and they will pay in cash at that time. It is because the
drinks does not require credit card to pay so cash payment is the best.

• Service revenue
This revenue model sells the time of oneself or of a business’s employees. The service
revenue model is often used in combination with one of the other model. An example of service
based model are consulting firms. The offer their advice and commonly charge per hour.
Service revenue in our business is cash on delivery (COD). Cash on delivery is a system of
paying for the drinks when we delivered. We will charge RM1 for each purchase of 5 cup of
drinks per delivery. Cash on delivery are offer for students and staffs in Uitm Permatang Pauh
only.

• Gratuity or tip
A gratuity is a voluntary amount of money given in exchange for a service performed. A gratuity
is also known as a tip. A gratuity is different from service charge or service revenue, it is
because serviced charge is mandatory while gratuity or tip is voluntary. We put a tip jar in our
shop for our customers to give ant tips for us. Tips on how to improve our business like
introducing new flavors or improve our services.

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6. KEY ACTIVITIES

Key activities are an important element of a business because it represent what the company
must do in order to make the business work and operate successfully. Each of the activities
stated in the business canvas can be producing a product or providing a service, or either a
mix of both. Key activities are required in a business to create and offer a value proposition,
reach the markets, maintain the customer relationships as well as to earn a greater revenue.

However, key activities differ depending on business model type and can be categorize into
production, problem solving, platform or network related. For instance, if a business focuses
on the production of a product, the activities that may include is ongoing learning about the
customers, target market segmentation, and new technique to improve the product.

The first element of the key activities that our business do is maintaining the price of the drinks
and ensuring that the price is reasonable and affordable for our customer to purchase. This is
because, price is one of the main part of the choices that a customer considered before
purchasing any product. The increasing price of the ingredients that are used in the drinks will
be one of the challenges in order to maintain a good price for the customers.

In order for this element to be used in the business, some researches was done based on the
price of other brands’ such as TeaLive and Cool Blog for instance. This activity is very useful
for Le Boba’s business to practice due to the high demand for the drinks that the business will
produce. Hence the price that was practiced in the business is affordable for the customer this
is because the target market mostly are students.

The second element of key activities that are used by the business is to learn new recipes and
technique to produce variety of selections of drinks other than milk tea and also delivering
quality products. One type of drink might not attract some customers who demand for other
drinks with different flavors. Customers would ask for other flavors that are available. For
example, TeaLive produce variety of flavors in their menu such as Fruit Tea, Smoothies and
also Sparkling Juice.

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7. KEY RESOURCES

Key resources are the main inputs that the company uses to create its value proposition,
service its customer segment and deliver the product to the customers. These are the most
important things you need to have for your business model to work and business models are
usually based on a number of tangible and intangible resources. These are the main assets
that the company, in particular, requires to create the end product, and these are usually
differentiated from the key resources being utilized by the competitors.

Categories of Key Resources:

1. Physical – Buildings, vehicles, machines, raw goods.


2. Intellectual – Brand, proprietary knowledge, patents, partnerships.
3. Human – Creativity, experience.
4. Financial – Cash, credit, stock.

One of the key resources is the capital. The business nature is partnership so all the capital
are from the total of 4 partners.The building that the business have chosen is a shop lot at Tun
Mutahir College and UiTM Bandaraya Campus . Next is the management that consists of the
manager, marketing executive, organizational executive and the financial executive. Thirdly is
the knowledge that is important not only for the company but also to everyone that are handling
a business. This is because without any proper knowledge, the business will not succeed and
are unable to achieve their main goals and objectives. The last key resouces are the high
quality ingredients used to get the best results and in achieving customers satisfactions.

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8. KEY PARTNERSHIPS

Key partners are the relationships that you have with other business, governmental, or non-
consumer entities that help your business model work. These can be the relationships that
your company has with your suppliers, your manufacturers and business partners. These
partnerships that you will undoubtedly create will be forces that help your business succeed
in areas that would be inefficient for you to do yourself.

The nature of this business is partnership. A business partnership is a specific kind of legal
relationship formed by the agreement between two or more individuals to carry on a business
as co-owners. A partnership is a business with multiple owners, each of whom has invested
in the business. Some partnerships include individuals who work in the business, while other
partnerships may include partners who have limited participation and also limited liability for
the debts and lawsuits against the business.

There are a few suppliers for the business. A supplier is an entity that supplies goods and
services to another organization. This entity is part of the supply chain of a business, which
may provide the bulk of the value contained within its products. Some suppliers may even
engage in drop shipping, where they ship goods directly to the customers of the buyer.

One of the main suppliers for the business is Moko Moko Supply. Moko Moko Supply was
founded in 2010 with international & halal certificate and provides all kinds of ingredients for
food and beverage such as milk powder mix, coffee powder mix, fructose, smoothie powder &
creamer, crispy waffle powder & spread, concentrated syrup, fruit jam, syrup and sauce,
topping, tea leaf, canned food and snow ice. Lipton’s black tea and other ingredients such as
sugar and fresh milk are from the local TESCO Mall. The cups, straws and cup plastic holder
from King Hin Plastic Enterprise.

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9. COST STRUCTURE

The cost structure describes all the costs incurred in order for the business model to work.
The costs can be easily calculated and relatively after defining the key resources, key activities
and key partnerships. Cost structure refers to the types and relative proportion of fixed and
variable cost that a business incurs. The concept can be defined into smaller units, such as
by product, service, product line, customer, division or geographic region.

Business model cost structure can either be cost-driven or value-driven:

5. Cost driven –This kind of approach concentrates on reducing cost as much as


possible. This can be done through outsourcing and automating wherever possible.
6. Value driven – This is a more value centred approach to the cost structure which
focuses on maximising worth for customer.

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Types of cost structure:

• Fixed cost
A fixed cost is an expenses or cost that does not change with an increase or decrease in the
number of goods or services produced or sold. Fixed costs are expenses that have to be paid
by a business, independent of any business activity. It is one of the two components of the
total cost of running a business, the other being variable costs. A fixed cost is an operating
expenses for a business that cannot be avoided regardless of the level of production or sales.
Examples of fixed cost for the business are salaries and rent. The rent and salary payment
are fixed costs, as it does not change according to how much the business earns its profits.

• Variable Cost
Variable costs are costs that change as the quantity of the good or service that a business
produces changes. Variable cost is the sum of marginal costs over all units produced. They
can also be considered normal costs. Fixed costs and variable costs make up the two
components of total cost. The level of variable cost is influenced by many factors, such as
fixed cost, duration of project, uncertainty and discount rate. For example, business pays for
raw materials such as sugar, black pearl, milk and tea to make our drinks. When activity is
decreased, less raw material is used, and so the spending for raw materials falls. When activity
is increased, more raw materials are used, and spending therefore rises.

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CONCLUSION

Nowadays, marketing plays an important role to any organization for rapid growth and to
establish in the industry. In simplest way to viral our product or service is by using viral
marketing strategy which is one of the newest and effective trend activities. While busy doing
the marketing done, the organization must bring together the marketing activities to relate with
customer relationship. It is also important to play marketing and customer relationship
management together for stay in the industry for a long-term business.

A business will not success if they not make up and plan for the better future. For Le Boba,
the company should improve marketing relationship activities in order to enhance company
performance. The marketing activities that Le Boba can do is value customer feedback,
regularly review, evaluate and enhance customer relationship marketing activities, build trust
with the customers and offer customer rewards.

Leadership in a team also plays an important role. The leadership team is responsible for the
successful company. The leadership team needs to set the direction and build the growth plan,
then everyone is responsible for execution, including sales. Without a good leadership, a group
member may be lost and do not know what to do. The workers may find out that they do the
right things but in fact they are not. Leader should open eyes and always give motivation to the
group members on how to improve entrepreneur skills.

In conclusion, Le Boba would like to say that if we are able to face the challenges in business
and we able to solve the problems in a correct way, in future we will be a successful
entrepreneur.

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REFERENCES

• https://bmcintroduction.wordpress.com/key-partners/
• https://www.cleverism.com/key-partners-in-business-model-canvas/
• https://www.google.com/search?q=moko+moko+supply&oq=moko&aqs=chrome.0.6
9i59j69i57j69i60.1433j0j7&sourceid=chrome&ie=UTvvF-8
• https://smallbusiness.chron.com/personal-selling-objectives-47758.html

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APPENDICES

Diagram 1

Diagram 4

Diagram 2

Diagram 3

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