KATHMANDU

UNIVERSITY SCHOOL OF
ENGINEERING
DEPARTMENT OF

CIVILENGINEERING

Assignment 4

Prepared By:

Binod Chand (09)

Suman GC (15)
Anup Gautam (16)
Nitish Kumar Sah (35)
Ben Subedi (50)
Rugen Thapaliya (56)

Report Submitted To:

Bibhu Ratna Tuladhar

Kathmandu University
Dhulikhel, Kavre.

12 August, 2021
Consider the business idea that you (and your respective group) have chosen and perform
the following tasks:

(1) Make sure that you read and understand the essentials of competitive advantage,
business model and business model canvas, which is included in your course book and
uploaded in Useful Resources in Google Classroom.

a). What is competitive advantage? What is business model? Describe how does it relate to
a company’s business model?

Ans: Competitive advantage is the favorable position an organization seeks in order to be more
profitable than its rivals. To gain and maintain a competitive advantage, an organization must be
able to demonstrate a greater comparative or differential value than its competitors and convey
that information to its desired target market. For example, if a company advertises a product for a
price that's lower than a similar product from a competitor, that company is likely to have a
competitive advantage. Competitive advantages generate greater value for a firm and its
shareholders because of certain strengths or conditions. The more sustainable the competitive
advantage, the more difficult it is for competitors to neutralize the advantage. The two main
types of competitive advantages are comparative advantage and differential advantage.

Market competition

As the idea of Biblioteca Bakery is new in Nepal there are not so many competitors in Nepal.
The lists of some of the competitors who have started their business on the very same idea of
bakery inside the library are as follows:

1. Bodhi Books and Bakes

2. Café Cheeno
3. Palpasa Coffee

These are the names of handful Library café that are operating in Kathmandu. Among these the
top competitors are Bodhi books and Bakes, Café Cheeno and Palpasa Coffee. These are also the
popularly known Library café which has different market strategies, because of which they are
leading the industry of Library Café.

A business model is the plan your business has for making money. It’s an explanation of how
you deliver value to your customers at an appropriate cost. This includes descriptions of the
products or services you plan to sell, who your target market is, and any required expenses.

The business model lets entrepreneurs’ experiment, test, and model different ways to structure
costs and revenue streams. For those just starting out, exploring potential business models can
help you determine if your business idea is viable, attract investors and guide your overall
management strategy. For established businesses, it serves as the basis for developing financial
forecasts, setting milestones, and setting a baseline for reviewing your business plan.

(a) What are the key components of a business model?

In its simplest form, a business model can be broken down into three parts:
 Everything it takes to make something: design, raw materials, manufacturing, labor, and so
on.
 Everything it takes to sell that thing: marketing, distribution, delivering a service, and
processing the sale.
 How and what the customer pays: pricing strategy, payment methods, payment timing, and
so on.

As you can see, a business model is simply an exploration of what costs and expenses you have
and how much you can charge for your product or service. It brings together everything defined
in the opportunity and strategy sections of your business plan. This includes things like your
target market, your value proposition, sales and marketing activities, etc.

How do you know if your business model will be successful?

A successful business model just needs to collect more money from customers than it costs to
make the product. This is your profit simple as that.
New business models can refine and improve any of the three components mentioned above.
Maybe you can lower costs during design and manufacturing. Or, perhaps you can find more
effective methods of marketing and sales. Or, maybe you can figure out an innovative way for
customers to pay. Keep in mind, though, that you don’t have to come up with a new business
model to have an effective strategy. Instead, you could take an existing business model and offer
it to different customers. For example, restaurants mostly operate on a standard business model
but focus their strategy by targeting different kinds of customers.

b) Provide a brief description about various elements of a business model Canvas Develop a
business model canvas for your venture.

Ans. The Business Model Canvas is an entrepreneurial tool that enables you to visualize, design,
and reinvent your business model. It was developed by Swiss business theorist and author
Alexander Osterwalder. For many startups, using the tool can help them develop a clear view of
their value proposition, operations, customers, and finances. As a small business owner, you can
use it to identify how the different components of your business relate to each other. That’s
powerful when deciding where you need to focus your time and attention as you start and grow
your business.
"Many start up entrepreneurs and small businesses are so busy trying to get started and survive
that they spend little time planning. When they do try to plan, they are often confused and don't
know where to start,” explains Bruce Gitlin, SCORE mentor and business development expert.
“This tool sets an overarching framework for developing a business strategy, a detailed business
plan, and/or a prioritized action plan.”
According to Gitlin, the Business Model Canvas can help move entrepreneurs to address specific
risks and acquire more information (about competitors or a market niche, for example).
a. Customer segments:
These are the groups of people or companies that you are trying to target and sell your
product or service to. Segmenting your customers based on similarities such as
geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to
better serve their needs, specifically by customizing the solution you are providing them.
After a thorough analysis of your customer segments, you can determine who you should
serve and ignore. Then create customer personas for each of the selected customer
segments.

There are different customer segments a business model can target and they are;

 Mass market: A business model that focuses on mass markets doesn’t group its customers
into segments. Instead, it focuses on the general population or a large group of people
with similar needs. For example, a product like a phone.
 Niche market: Here the focus is centered on a specific group of people with unique needs
and traits. Here the value propositions, distribution channels, and customer relationships
should be customized to meet their specific requirements. An example would be buyers
of sports shoes.
 Segmented: Based on slightly different needs, there could be different groups within the
main customer segment. Accordingly, you can create different value propositions,
distribution channels, etc. to meet the different needs of these segments.
 Diversified: A diversified market segment includes customers with very different needs.
 Multi-sided markets: This includes interdependent customer segments. For example, a
credit card company caters to both their credit card holders as well as merchants who
accept those cards.
b. Customer relationships:
In this section, you need to establish the type of relationship you will have with each of your
customer segments or how you will interact with them throughout their journey with your
company.
There are several types of customer relationships they are listed below:
 Personal assistance: You interact with the customer in person or by email, through phone
call or other means.
  Dedicated personal assistance: You assign a dedicated customer representative to an
individual customer.
 Self-service: Here you maintain no relationship with the customer, but provides what the
customer needs to help themselves.
 Automated services: This includes automated process or machinery that helps customers
perform services themselves.
 Communities: These include online communities where customers can help each other
solve their own problems with regard to the product of service.
 Co-creation: Here the company allows the customer to get involved in the designing or
development of the product. For example, YouTube has given its users the opportunity to
create content for its audience.
You can understand the kind of relationship your customer has with your company through a
customer journey map. It will help you identify the different stages your customers go through
when interacting with your company. And it will help you make sense of how to acquire, retain
and grow your customers.
C)Channels:
This block is to describe how your company will communicate with and reach out to your
customers. Channels are the touchpoints that let your customers connect with your company.
Channels play a role in raising awareness of your product or service among customers and
delivering your value propositions to them. Channels can also be used to allow customers the
avenue to buy products or services and offer post-purchase support.
There are two types of channels
 Owned channels: company website, social media sites, in-house sales, etc.
 Partner channels: partner-owned websites, wholesale distribution, retail, etc.
c. Revenue streams:
Revenues streams are the sources from which a company generates money by selling their
product or service to the customers. And in this block, you should describe how you will earn
revenue from your value propositions. A revenue stream can belong to one of the following
revenue models,
 Transaction-based revenue: made from customers who make a one-time payment.
 Recurring revenue: made from ongoing payments for continuing services or post-
sale services.
There are several ways you can generate revenue from
 Asset sales: by selling the rights of ownership for a product to a buyer
  Usage fee: by charging the customer for the use of its product or service
 Subscription fee: by charging the customer for using its product regularly and
consistently
 Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a
fixed period of time
 Licensing: customer pays to get permission to use the company’s intellectual property
 Brokerage fees: revenue generated by acting as an intermediary between two or more
parties
 Advertising: by charging the customer to advertise a product, service or brand using
company platforms
d. Key Activities:
What are the activities/ tasks that need to be completed to fulfill your business purpose? In this
section, you should list down all the key activities you need to do to make your business model
work. These key activities should focus on fulfilling its value proposition, reaching customer
segments and maintaining customer relationships, and generating revenue.
There are 3 categories of key activities:
 Production: designing, manufacturing and delivering a product in significant quantities
and/ or of superior quality.
 Problem solving: finding new solutions to individual problems faced by customers.
 Platform/ network: Creating and maintaining platforms. For example, Microsoft provides
a reliable operating system to support third-party software products.
e. Key Resources:
This is where you list down which key resources or the main inputs you need to carry out your
key activities in order to create your value proposition.
There are several types of key resources and they are:
a) Human (employees)
b) Financial (cash, lines of credit, etc.)
c) Intellectual (brand, patents, IP, copyright)
d) Physical (equipment, inventory, buildings)

f. Key Partners:
Key partners are the external companies or suppliers that will help you carry out your key
activities. These partnerships are forged in order to reduce risks and acquire resources.
Types of partnerships are
a) Strategic alliance: partnership between non-competitors
b) Coopetition: strategic partnership between partners
c) Joint ventures: partners developing a new business
d) Buyer-supplier relationships: ensure reliable supplies
g. Cost structure:
In this block, you identify all the costs associated with operating your business model. You’ll
need to focus on evaluating the cost of creating and delivering your value propositions, creating
revenue streams, and maintaining customer relationships. And this will be easier to do so once
you have defined your key resources, activities, and partners. Businesses can either be cost-
driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing
maximum value to the customer).
h. Value propositions:
This is the building block that is at the heart of the business model canvas. And it represents your
unique solution (product or service) for a problem faced by a customer segment, or that creates
value for the customer segment. A value proposition should be unique or should be different
from that of your competitors. If you are offering a new product, it should be innovative and
disruptive. And if you are offering a product that already exists in the market, it should stand out
with new features and attributes
Business model canvas for our venture (biblioteca bakery) is tabulated below:
.

2) Develop a marketing mix for your venture to effectively capture your target
market(s). Elaborate your answer.

Ans:As the idea of bibliotica Bakery is new in Nepal there are not so many competitors in Nepal.
The lists of some of the competitors who have started their business on the very same idea
ofbakery inside the library are as follows:

1. Bodhi Books and Bakes

2. Café Cheeno

3. Palpasa Coffee

These are the names of handful Library café that are operating in Kathmandu. Among these the
top competitors are Bodhi books and Bakes, Café Cheeno and Palpasa Coffee. These are also the
popularly known Library café which has different market strategies, because of which theyare
leading the industry of Library Café.in order to be outstanding between these we have to work
hard on a model which is 7P marketing model.

The marketing mix of bibliotica revolving around 7 P’s capturing our target market are explained
below:

Product: It goes without saying that the service or product you’re selling should be at the centre
of every element of the marketing mix.Fundamentally, it allows you to address the questions key
to sales conversion: what problem or issue does the product solve for customers? Why is your
product the best one to solve it?

The main product in the marketing mix of an bakery store will be facebook marketing and
website which will be accessed by users to know about our bakery. As our product Library
bakery is the main part of differentiating as we provide library and bakery at a single store. A
there are wide numbers of colleges and students, with the wide numbers of book worms, there is
no such place where they can get the facility of library and bakery at single places. The customer
will get choices of choosing books from the wide variety of available book. The bakery service
will allow customers to enjoy books and treat themselves. with food and coffee. The products
includes coffee, lemonade, mojito, ice tea, bread, pastries, cookies, patties, pizza, doughnuts,
rolls, muffins in the initial stage. We will provide proper environment to study and also books of
their choices to such customer. While borrowing books customer should be member of library
bakery and we provide book borrowing service to member customer with online renewing
system. Our business will be providing their own space to the customer. The events that we will
be organizing for our member customer will encourage more of customers to join our project
being a member. As library bakery will be providing the books with proper condition to
customer who is willing to buy books and customer can fill up the membership form from
online. We will be focusing on the proper and good environment to the customer. Our target
market will be all aged people mainly those who are book lovers and those who want to find
proper studious environment. We will provide proper environment to study and also books of
their choices to customer.

Quality for us is giving best product and service to our customer. By providing peaceful study
area with well-maintained books in library and in bakery providing hygienic food which will not
hamper health of customer with clean sitting area, we will be able to give quality product and
services to our customer.

Price:

The strategy behind the pricing of your product needs to be based on what your customers are
prepared to pay, costs such as retail mark-up and manufacturing, as well as other considerations.

Pricing is a crucial factor that determines how frequent people will come to your bakerywe will
be targeting student si will be providing our serveice at affordable price.Below mentioned points
we will use for the customer service: -

 Special orders and online order/ home delivery within 8 km

 40% off on all bakery items after7 pm
 Membership card facility for both discount purpose on bakery and library facility

Place:

Where and how your product is displayed and sold should be directly informed by your
customers.

A deep understanding of their purchasing patterns – and targeting them at the right stage in their
buying cycle – will make it clear where you should promote and sell your products and how that
fits into your online and real-world marketing mix.

We have decided to open our bakery in New Baneshwor. We are focusing on mainly attracting
students in our bakery where they can enjoy the bakery items as well as spend some time
studying. As there are lots and lots of schools, college in that area, we would easily attract these
students. Moreover, our library would contain variety of books and so students can get wide
range of knowledge. In exam days, students feel scared of whether they would pass in exam or
not, so we have chosen this place so that students can enjoy our delicious coffee and freshen up
their mind before examination.
Promotion:

Successful marketing strategies include all the promotional activities across the marketing mix,
including advertising, direct marketing, and in-store promotional activities. The possibilities of
digital promotion are limited only by your imagination and can include online events, chats,
social media groups, and livestreams.Promoting your business through social media platforms,
digital and media marketing campaigns to create brand awareness is crucial for ensuring that
your online grocery service is known to maximum users.

Talk programs, home delivery in our bakery can be considered our unique selling point ag. These
strategies can be applied to win against this competition as not only the customers will promote
the bakery but also the authors and other celebrities will make the bakery the topic of discussion
in the market.also we are going to give platform to launch book , This will attract additional
people and spread the word of the bakery thus making us very popular and strengthening the
bakery to win against the competitors.

People:

Excellent customer service not only converts to sales, but can increase your customer base by
referrals. Acquiring these referrals by people who love your brand can also be a great example of
how your marketing efforts can support your sales process.It’s important that everyone who
represents your brand or deals with customers – including the non-human chat bot variety! – are
fully trained sales professionals with an intimate knowledge of your product and how it will
improve the lives or solve the problems of your customers.

Bakery staff should be polite to the costumer including delivery staff too.our business is an
costumer oriented business, so it has to have a positive and result-oriented team that can work
tirelessly to go above and beyond customers’ expectations. From delivery guys to customer
service staff, all members need to wok cohesively towards a common goal of complete customer
satisfaction. Biblioteca bakery is for people and to have better reading experience for people.

Process:

The process of delivering your product to the consumer should be designed for maximum
efficiency and reliability, but may also include features that are in line with your brand, such as
being environmentally or sustainably focused.With the rise in online shopping, digital
partnerships and logistics have become an essential part of the marketing mix.

Below mentioned points we will use for the customer service: -

 Proper parking facility

 Two way roads for feasible transportation
 Special orders and online order/ home delivery within 8 km
 40% off on all bakery items after7 pm
Physical Evidence:

Your marketing mix must take into consideration all the things your customer sees, hears –
sometimes even smells – in relation to your product.This, of course, includes packaging and
branding, but should also bring in the ways products are displayed in stores, where they are
placed, and the context in which they sit, as well as digital placement, including on your website
and social media.

Quality for biblioteca bakery is giving best product and service to our customer. By providing
peaceful study area with well-maintained books in library and in bakery providing hygienic food
which will not hamper health of customer with clean sitting area, we will be able to give quality
product and services to our customer.