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Toncea, Ion; Iordache, Mihai
Conference Paper The Business Model Canvas "Camelina omega 3 Plus"
Provided in Cooperation with: The Research Institute for Agriculture Economy and Rural Development (ICEADR), Bucharest
Suggested Citation: Toncea, Ion; Iordache, Mihai (2020) : The Business Model Canvas "Camelina omega 3 Plus", In: Agrarian Economy and Rural Development - Realities and Perspectives for Romania. International Symposium. 11th Edition, The Research Institute for Agricultural Economy and Rural Development (ICEADR), Bucharest, pp. 39-
This Version is available at: http://hdl.handle.net/10419/
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THE BUSINESS MODEL CANVAS ”CAMELINA OMEGA 3 PLUS”
ION TONCEA^1 , MIHAI IORDACHE^2
Summary: The Business Model Canvas ”Camelina omega 3 Plus” is a transpose in practice of the information from the best seller book ”Business Model Generation – A handbook for Visionaries, Game Changers and Challengers” written by the Alexander OSTERWALDER & Yves PIGNEUR and of the knowledge accumulated from the complex and diverse activities carried on during project H 2020 - EU RUR- 09 - 2017 ”Replicable business models for modern rural economies (RUBIZMO), financed under Grant Agreement Nº 773621, in which the Business Model Canvas is a basic tool. Firstly, the paper is focusing on a clear presentation of the structural elements (9) of the business model canvas – (PC) Key partners and partnerships, (AC) Key activities, (R-C) Key resources, (PV) Value propositions, (CA) Channels, (RC) Customer relationships, (SC) Customer segments, ($C) Costs structure and (FV) Revenue Streams. Further on it is presented the description, analysis and design of the Business Model Canvas ”Camelina Omega 3 Plus”, a case study for inspiration of those who are interested to develop or who are already running a sustainable business based on similar values as the company ”Camelina Omega 3 Plus”.
Keywords : business, model, canvas, camelina, omega 3
JEL classification: O31 (Innovation and Invention: Processes and Incentives)
INTRODUCTION
The paper is inspired from the first chapter ”The business Model Canvas” (BMC) of the book ”Business Model Generation – A Handbook for Visionaries, Game Changers, and Challengers” written by the Alexander OSTERWALDER and Yves PIGNEUR in cooperation with 470 experts from 45 countries and published in 2010, simultaneous in USA and Canada, by John Wiley & Sons, Inc., Hoboken, New Jersey. The Business Model Canvas was proposed in 2004 by Osterwalder A. in his earlier PhD thesis ”Business Model Ontology, a Proposition in a Design Science Approach”. At that time there was no model to express a company's global business logic from a pure business point of view. The existing models essentially had an organizational or process perspective or covered only parts of a firm's business logic (Osterwalder, A. PhD thesis 2004). This paper is based, also, on the knowledge accumulated from the complex and diversified activities carried on during EU H2020 project ”Replicable business models for modern rural economies – RUBIZMO” , a new European initiative working to discover the vital ingredients for developing entrepreneurship and successful business models in high potential sectors as food and agriculture, new bio-based value chains and ecosystem services (https://rubizmo.eu/project). As follow from the declarations of those who used the ”BMC”, it is an efficient and simple instrument for discovering, describing, analysing and (re)design of any kind of business, and, maybe, of any phenomena or activity from society and nature. It is one-page visual graphics which facilitates reading and debate, stimulates the team work, a common language, imagination, holistic thought, not getting blocked in details and not offering direct solutions. In the same time, the BMC is a strategic management tool to quickly and easily define and communicate a business idea or concept, structuring the idea or concept in a coherent way (Ebinum. M.; 2016). Also, BMC is a hands-on tool that fosters understanding, discussion, creativity and analysis (Ostervalder, A. & Pigneur, Y. 2010) , the essential elements which revolutionised the most of the business models of
(^1) Ion TONCEA, dr. eng, president of Romanian Association for Sustainable Agriculture (A.R.A.D.), [email protected]; (^2) Mihai IORDACHE, economist, manager ”Camelina Omega 3 Plus”, [email protected];
or case, or, at least, an idea at each pillar. Also, the order of structural pillars study is aleatory, but it is not started other pillar study until the discussions about a pillar is not exhausted. The discussions and outline of the business model can be facilitated by the general questions proposed by Canvaziner 2,0 Demo blog (https://canvanizer.com/new/business-model-canvas) and many other sources. The questions are related to the type and characteristics of the business, affiliated, services
- such as consultancy and technical assistance, premium products and personal services (post- sales), payment types etc. This activity is crucial for the development of BMC, because during this process can be discovered elements which were not observed before, such as connections between pillars and innovative elements of the business model. Also, it is to be taken into account that this activity is consumer of time, materials - paper (sometimes hundred meters), post-its, markers, chalk, energy and, of course, some protocol consumables: tea, coffee, water, juices, snacks etc.;
- Synthesize the reading, discussion/debate and imagination results in a holistic manner, oriented to practice;
- The BMC process final phase is communication of new business ideas and the estimation of economic, social and/or environmental results of the proposed business. Usually, in this phase it is presented the future business model innovations based on inspiring and adequate concepts, such as SMART or Sustainable Development concepts. These concepts are paving the way on how to make a profitable company, including how the business was run and how it will be designed in the future, for the transition from Red Ocean category, with strong competition and low revenues, in the Blue Ocean category, without or with less competition and low costs and satisfactory revenues.
RESULTS AND DISCUSSIONS
The business model canvas was not changed at all as shape and content since Osterwalder, A., & Pigneur, Y. published the book ”Business Model Generation - A Handbook for Visionaries, Game Changers, and Challengers”, most of the scientists and businessmen being concern themselves with understanding and successfully applying this concept into practice. In many cases the business model canvas seems to be a universal and revolutionary tool in businesses strategic management, like wheel discovery for the humanity. According to the results of analysis of many Business Model Canvas out existing on the internet, from the all domains (production, distribution and trade) and sectors (public, private and social) of economy - from industries involved in the extraction and production of the raw materials, the industries which produce finished usable goods or are involved in construction, services, research and development etc., all business models have nine (9) pillars: (PC) Key Partners, (AC) Key Activities, (R-C) Key Resources, (PV) Value Proposals, (RC) Customer Relationships, (CA) Channels, (SC) Customer Segments, ($C) Costs Structure and (FV) Revenue Streams and each pillar has, more or less, a small examples number: PC:1-9, AC:1-5, R-C:1-10, PV:1-7, RC:1-6, CA:1-10, SC:1-5, $C:1-14 and FV:1-5, as well as using a specific languages, no detailed, to each business model/case. However, why 9 pillars of BMC? Why not more many, as Osterwalder and Pigneur expected, or less because the (RC) Customer Relationships and (SC) Customer Segments belong to customers area? The number 9 of the structural pillars of BMC is, maybe, ”the complete number of s total analysis (Allendy, R., F.). Also, BMC structure cover all four areas of a business - Offering (PV) , Customers (RC and SC) , Infrastructure (PC, AC, R-C, and CA) and Financial viability ($C and FV). The famous business companies like: Air BnB, Alibaba, Amazon, Car&Go, Easybank, FounderCo, IPOD-ITUNES, GILLETE, HILTI, IKEA, LEGO, TESLA, ZARA, WALMART, WIKIPEDIA etc. do not use a very detailed business canvas (Gira., M. 2020) , each pillar of the BMC having between 1 – 5
patterns. The BMC can assist mainly the new and visionaries entrepreneurs, for classification of the business model according to business model definition of Osterwalder, A., & Pigneur, Y. (2010) – The reason for what the enterprise or entrepreneurs Create, Supply and/or Attract Value , in the business models based on: Creation, Supplying and/or Attraction of the Value.
Case Study: Business Model Canvas ”Camelina Omega 3 Plus”
The business model canvas ”Camelina Omega 3 Plus” is probably, the first Romanian example explored by BMC method. Camelina Omega 3 Plus is a business company established in 2020 for commerce retail by direct marketing and electronic commerce (NACE class 4791). Camelina is a niche agriculture crop cultivated to produce seeds rich in fats, proteins, cellulose, minerals, vitamin E etc. (Toncea, I. 2014). Also, from Camelina seeds is extracted oil rich in omega 3 and omega 6, and is produced meal rich in proteins and cellulose (Toncea, I., et all. – 2013). In the following paragraph, we will present the business model canvas ”Camelina Omega 3 Plus” (Fig 2), inclusive specific explanations and practical examples for each pillar.
( CP) Key Partners and Partnerships – each participant at the common activities or engaged in business transactions for decreasing the high costs, risk and uncertainty of business , as well as to get resources and develop new activities. In case of the business Camelina Omega 3 Plus, the main partners and partnerships are suppliers of Camelina seeds, oil and meal, respectively Affiliates - cooks, pharmacists and sport trainers, Research and Development Institutes for Agriculture and Bio-resources of food and Faculties of pharmacy and medicine (R&D) and the Orders Houses.
(AC) Key Activities – are specific to each business model and are the basis for creating, supplying and attracting value in order to maintain customer relationships and to gain revenues. In most of the business cases the key activities are: producing of goods and services according to market quantitative demand and in the same time of superior quality; finding solution(s) , in the shortest time, for customer’s problems and management and promotion of the businesses. According to official documents of establishment, the key activity of the Camelina Omega 3 Plus SRL is retail commerce by orders houses and internet (NACE class 4791), that belongs of management and promotion of the businesses.
Figure. 2. The Business Model Canvas ”Camelina Omega 3 Plus” (PC) Key Partners and Partnerships √ Partners: Camelina seeds, oil and meal S uppliers √ Partnerships:
- Affiliates
- R & D
- Orders Houses
(AC) Key Activities
√ Commerce retail by orders houses and internet (NACE class 4791) ;
(PV) Value Propositions √ Seeds clean and health and rich in fats, proteins, cellulose, minerals (mainly iron and zinc) and vitamin E √ Oil premium with delicate aroma and rich in ω3 and ω √ Meal with good taste and rich in proteins and cellulose
(RC) Customer Relationships √ Personal and dedicated personal assistance; √ Online sharing information, knowledge and experience
(SC) Customer Segments √ Niche market, with specific and specialised customer segments
(R-C) Key Resources √ Experts in camelina cultivation and seeds processing, and marketing
(CA) Channels √ Sales team √ www.camelina.ro, and other online sites √ Channels preferred by the customers ($C) Costs Structure √ fixed and variable costs; √ diverse cost strategy
(FV) Revenue Streams √ revenue streams from the customer segments;
which can serve two or more customer segments and the market platforms - which bring together two or more distinct and interdependent customer segments.
($C) Costs Structure Any business case or models implies financial resources, because at least one of the three pillars of BMC (Value propositions, Customer relationships and Revenues stream) induces costs. The economic sciences describe two types of costs: fixed costs , that remain the same indifferently of the goods and services production, such as: salary of the indirect productive staff, rents, physical facilities of production (consumptions of electric energy, natural gases, water etc.), taxes, building and equipment insurance, publicity expenses, phone subscription etc., and variable costs , that vary proportional with the volume of the goods and services produced and/or traded, such as salary costs of the personnel direct productive, consumption of raw materials for producing goods and services. Also, each business model or business case has a cost strategy, depending on:
- value proposition: business with low value proposition, as the low cost strategy and business are based on high value proposition, with premium goods and exclusivity services;
- volume and diversity of goods and services: economy of scale – decreasing of unitary costs while the production is increasing, for example as result of low prices of wholesale acquisition and savings from specific activities – decreasing the unitary costs by increasing diversity of goods and services by using the same equipment and personnel. The business case ”Camelina Omega 3 Plus” has both of the costs types - fixed and variable and belongs to the strategy of diverse costs.
(FV) Revenue Streams – represent the arteries of a business model and is based on revenue streams from customer segments side. There are many types of revenues streams, but the most important type, including for ”Camelina Omega 3 Plus”, is the revenue streams from the customers. Also, there are different modalities for revenue streams generation, such as participating at inter/national projects, sponsorships, sales of the actives, taxes or commissions for various services, subscriptions, publicity for specific goods or services, or brand etc. In our case study, the opportunities to participate at national and international development programmes are an option for financial resources. CONCLUSIONS
- The Business Model Canvas (BMC) is an ”universally goods” used by the new and visionaries entrepreneurs for analysis and generation of innovative business cases and models. It is enough to use just the framework of BMC for the complete and efficient description and analysis of any component of the phenomena or activities from nature and society.
- The BMC is the first and the main step of business models generation, a hands-on tool that assures understanding of the business models and cases and fosters discussions, creativity and analysis;
- The most important benefit of BMC is the holistic thought, that is not blocked into details;
- The optimal structure of BMC is with 9 functional structural pillars because, maybe, ”The number 9 is perfect for a complete analysis. Also, each structural pillar has to have 1-5 examples;
- The case study of business ”Camelina Omega 3 Plus” is mainly based on the delivery of value, and, in the near future, on the creation and delivery of value;
- In the context of the present study assisted by the BMC method, Camelina seems to be a crop with less economic and social unknowns, but with many technical challenges;
ACKNOWLEDGEMENTS The research leading to this paper has received funding from the RUBIZMO project of the EU 2020 Programme / under REA grant agreement n° [773621].
BIBLIOGRAPHY
- Allendy, R., F. (1928), Etude sur la Fatalite Interieure, Paris: Gallimard;
- Blog-Canvanizer (2019), Create a Nerw Business Model Canvas; https://next.canvanizer.com/demo/business- model-canvas;
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- Osterwalder, A. (2004), Business Model Ontology: A Proposition in a Design Science Approach, http://www.publishingindia.com;
- Osterwalder, A.,&Pigneur,Y. (2010), Business Model Generation – A Handbook for Visionaries, Game Changers, and Challengers; New Jersey/John Wiley & Sons. Inc.,Hoboken, 1-51pp;
- Osterwalder, A.,&Pigneur,Y. (2010), Business Model Generation – A Handbook for Visionaries, Game Changers, and Challengers (abstract) 8. Toncea, I., & Necșeriu, D., & Prisecaru, T., & Balint, L.N., & Ghilvacs, M.I.,& Popa, M. (2013), The seed’s and oil composition of Camelia – first Romanian cultivar of camelina (Camelina sativa L. Crantz) , Romanian Biotechnological Letters, Vol. 18, No^ 5, 2013, 8594 – 8602 pp;
- Toncea, I,. (2014), The seed yield potential of Camelia – first Romanian Cultivar of Camelina (Camelina sativa L. Crantz) , Romanian Agricultural Research N^0 31, 2014, www.incda-fundulea.ro, 17-23 pp;
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