The business model is considered the imperative requirement for every organization since it serves as a guiding framework for enhancing strategic performance. The business model enables an organization to ascertain what they have and what they should do with the available resources to accomplish sustainable performance in the concerned industry. The business model canvas acts as a flexible template that lets an organization frame its business model and the major components that are involved in the canvas are referred to as building blocks. The business model canvas comprises nine building blocks that include the target customer segments, revenue streams, sources of finance and the key activities of the organization (Aversa et al., 2015).
The following assessment aims to decode the business model canvas of Not Dogs, a casual fast food restaurant based in Birmingham, UK. The primary highlights of the assessment would be a description of the organization’s background and the industry in which it operates. Following the description, the business model canvas for Not Dogs would be presented to identify specific interrelationships between the building components. Furthermore, the report would also emphasize recognizing the critical success factors for Not Dogs, factors contributing to downside risk that can help in drawing credible inferences for changes in the business model.
Not Dogs is a vegetarian fast food restaurant established in Birmingham, UK. The organization was founded by the efforts of Katie and Jane who had interesting prospects for changing the perception of vegetarian fast food (Not Dogs – Meaty…Without the Meat, 2018). The primary objective of the organization was aligned with the reduction of meat content in fast food while providing the fast-food experience to customers (Chesbrough, Di Minin & Piccaluga, 2013).
In the initial stages of the company, it was operated on a food truck that travelled throughout the UK. The products offered by Not Dogs include an assorted menu comprising of breakfasts, fries, side dishes and burgers from vegetarian ingredients. The organization operates in the fast-food industry which has been promisingly associated with references to the global revenues estimated at $570 billion with a predicted estimated annual growth of 2.5% over the next few years (Not Dogs – Meaty… Without the Meat, 2018). The fast-casual restaurant sector to which Not Dogs can be related is accountable for contributing more than 50% of sales in the restaurant sector.
The evaluation of the business model canvas of Not Dogs could be facilitated through references to individual components that represent the functional aspects of the business model.
The first component of the business model canvas of an organization includes the customer segments and the particular characteristics of the segment that include behavioural traits, demographic composition and the alternatives available for them.
As per Clark, Osterwalder & Pigneur (2012), the customer segment that can be identified in the business model canvas of Not Dogs primarily includes vegan people with a knack for fast food (Clark, Osterwalder & Pigneur, 2012). Other notable customer segments include university students, working mothers, unmarried youth, travellers and individuals working late hours. The primary characteristic that can be recognized in all the customer segments is reflective of their need for healthy food. The increasing awareness against the health hazards of fast food products has induced behavioural preferences of customers tailored to the demand for healthy food.
The second component in the business model canvas of an organization reflects the value proposition of the organization. As per Dudin et al., (2015), the value proposition is defined by considering the issues faced by customer segments and how the company aims to resolve the issues. One of the prominent highlights in the formation of value propositions is aligned with the consideration of the individual persona of the customer segments (Dudin et al., 2015).
The value proposition of Not Dogs could be presented as, ‘We aim to provide food enthusiasts with an exciting and amazing menu that guarantees delicious, quality food with a fun experience’. The primary issue of customers addressed through the value proposition of Not Dogs is the assurance of healthy fast food with an unaltered experience of the fast-food taste. The business of Not Dogs also emphasizes sustainability and protection of animals through the use of vegetarian ingredients that appeal to the needs of the vegan customer segment.
Channels’ building block in the business model canvas of an organization reflects on the avenues through which the business provides its products and services to customers. The channels that are identified in the case of Not Dogs include the easily accessible fast-casual restaurant in Birmingham, Not Dogs pop-ups, television and online advertisements and the delivery service (Kaplan, 2012).
The next component in the business model canvas of an organization is customer relationships which are reflective of the various approaches that are available to customers for communicating with the organization. The customer support service facilitated on the website of Not Dogs as well as feedback forms and the sausage selfie club are considered major aspects of customer relationships in the business model. Social media presence, as well as offers and token gifts, are also accounted as significant contributors to the customer relationships aspect of the business model of Not Dogs.
As per Joyce & Paquin (2016), revenue streams that are presented in the business model canvas of an organization are reflective of the specific sources through which the organization can earn revenue. The revenue streams identified in the case of Not Dogs are primarily observed in sales of fast food and the costs of delivery (Joyce & Paquin, 2016).
Key activities highlighted in the business model canvas are indicative of the initiatives of an organization for facilitating value proposition to the customer segments alongside executing other core functions of the enterprise such as marketing. The key activities identified in the case of Not Dogs include food preparation, restaurant service, delivery service, administration operations, social media and marketing.
The next building block included in the business model canvas refers to key resources which can be identified in the strategic assets needed for executing the key activities and providing the value propositions to customers. The key resources of Not Dogs are identified in financial capital, the infrastructure of the Birmingham fast-casual restaurant, management employees and human capital (Ovans, 2015).
The key partnerships that are noted in the business model canvas of Not Dogs include investors, advertising agencies, farms and food suppliers.
The final element of the business model canvas is the cost structure that highlights references to the mandatory costs needed for the execution of the business. In the case of Not Dogs’ business model, the cost structure comprises food supplies costs, marketing costs, monthly expenses, and cost of establishment, tools and costs of labour.
It is essential to focus on the interplay between various building blocks of the business model canvas as it would help in deriving plausible insights for management. The primary relationship identified among the building blocks is identified among the cost structure, key activities and key resources of Not Dogs (Zandoval & Ari Zilber, 2014).
The key activities and key resources are responsible for framing a major part of the cost structure of Not Dogs and can be evident in the form of food supplies cost depending on the activities of food preparation while the monthly expenses involved in the cost structure are related to the key resources such as human capital, physical establishment and management employees.
The necessity of identifying critical success factors for an organization is primarily aligned with the requirement for long term sustainability and some of the critical success factors for Not Dogs in the fast-casual restaurant industry can be presented as follows.
As per Joyce & Paquin (2016), diversity of products and services is accounted as the foremost critical success factor as customers in the fast-food industry demand frequent variations in the offerings of the industry for matching their palette (Joyce & Paquin, 2016). Not Dogs should continue perfecting its menu which would lead to the proliferation of new menu choices for customers thereby increasing the appeal of the business.
The second and most crucial success factor for Not Dogs could be identified in the form of relations with investors. The organization is operating on a small scale and therefore it requires additional investment to expand its operations across the UK. Acquisition of investments can be a prolific contributor to the sustainability of Not Dogs in the fast-casual restaurant industry.
The prominent downside risks that can be encountered by Not Dogs can be identified in the increasing awareness of the health impacts of fast food and relevant legislation. Furthermore, the organization also lacks the outlook for partnerships other than its supply chain (Clark, Osterwalder & Pigneur, 2012). The awareness campaigns against the negative impact of fast food on health could be responsible for the withdrawal of customers alongside implying large scale changes in the menu of Not Dogs that can affect the brand identity as well. The organization’s lack of partnership could also be recognized as a downside risk as it relies solely on investors for its expansion. The lack of franchising and joint venture initiatives could be assumed as a notable setback in the expansion of Not Dogs across the UK (Chesbrough, Di Minin & Piccaluga, 2013).
According to the review of the business model canvas of Not Dogs, specific changes could be recommended to accomplish superior strategic performance. First of all, the organization needs to include partners in the business model to improvise the management of the cost structure.
The management expertise of partners could also be leveraged alongside their financial capital for obtaining viable results in terms of market performance. From a positive point of view, Not Dogs should also focus on its present social media strategy to enhance customer relationships that can address the downside risk of health awareness. Customer relationships would imply that the organization would be able to convey nutritional information regarding the products to customers thereby retaining their faith in the brand’s products.
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