KIKA KEYBOARD
Business Plans & Business Models
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
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)?
Discussion Questions
◦ How do you design a business plan？
◦ What components do a business plan involve？
Theory Basis: Business model
based on Internet
Business model:
◦ 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
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
Business Model Map
Business Model
Profit Site
Customer Value
Scope
Price
Revenue Sources
Connected Activities
Implementation
Capabilities
Sustainability
Cost Structure
Internet
Afuah and Tucci (2003)
Performance
Environment
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
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
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
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
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
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
Capabilities
◦ Resource:
◦ 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
Sustainability
◦ How to maintain the competitive advantage
◦ Three generic strategies:
◦ Block strategy
◦ Run strategy
◦ Team-up strategy
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 2014. 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
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
Pre-Video Discussion
◦ What should a business plan consider？
◦ What would you consider to be the core skills needed to start a
successful business?
Video
◦ Embed/show video
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?
References
◦ Afuah, A., Tucci, C.L. (2003) Internet Business Models and
Strategies: text and Cases, The McGraw-Hill Companies.