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COURSE: EBUSINESS AND UNDERSTANDING BUSINESS F2011 TEACHER: ULRIK VILHELM FALKTOFT WRITTEN BY AnneMette Teisen ante 010687 Camilla Overgaard Jönsson cojo 220185 Jeanette Boesen jebo 230586 Katrine L. N. Kristensen klnc 290980 Louise Jensen loje 060686 Maya Gürtler Lorentzen mglo 110685
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Mar 17, 2016

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Louise Jensen

Research question: On  the  basis  of  our  own  analysis,  can  Virtual  Showroom  prove  to  be  a  sustainable  concept  on  the  Danish   market?
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Page 1: E-business

     

   

 COURSE:  E-­‐BUSINESS  AND  UNDERSTANDING  BUSINESS  -­‐  F2011  

TEACHER:  ULRIK  VILHELM  FALKTOFT    

             

 WRITTEN  BY  Anne-­‐Mette  Teisen  -­‐  ante  -­‐  010687  Camilla  Overgaard  Jönsson  -­‐  cojo  -­‐  220185  Jeanette  Boesen  -­‐  jebo  -­‐  230586  Katrine  L.  N.  Kristensen  -­‐  klnc  -­‐  290980  Louise  Jensen  -­‐  loje  -­‐  060686  Maya  Gürtler  Lorentzen  -­‐  mglo  -­‐  110685    

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CONTENT    

 

1.     Project  introduction   3    1.1 Introduction   3  1.2 Research  questions   3  1.3 Method  &  theory   4  1.4 Limitations   6  2. Concept  description   7  2.1 Vision  &  mission   7  2.2 Concept  description   7  2.2.1 Concept  model   9  2.2.2 Virtual  showroom  as  a  type  of  business   10  3. Business  model   11  3.1 Introduction   11  3.2 Target  group   12  3.2.1 Segmentation   13  3.3 Stakeholders   15  3.4 Value  proposition   19  3.4.1 The  flow  of  values   20  3.5 Value  chain   21  3.6 Cost  &  revenue   23  3.7 Channels   25  3.8 Implementation  &  design   25  3.9 Summary  of  business  model   26  4. Analysis  of  the  environment   28  4.1 External  environment   28  4.1.1 SLEPT-­‐analysis   29  4.1.2 Market  research  and  competitor  analysis   31  4.2 Internal  environment   34  4.3 SWOT  analysis   37  5. Marketing  strategy   40  5.1 Situation  analysis   41  5.2 Objectives   42  5.3 Strategy   43  5.4 Tactics   45  5.4.1 Customer  relationship  management   45  5.4.2 Supply  chain  management   46  5.4.3 The  marketing  mix   46    5.5 Action   51  5.6 Control   51  6. Discussion   52  7. Conclusion   53  8. Literature   56  9. Appendix   57  

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1.  PROJECT  INTRODUCTION    

 1.1    INTRODUCTION    

90%  of  Danish  Design  companies  are  one  man  companies  and  very  few  ever  grow  in  revenue  and/or  size.  This  indicates  that  these  smaller  companies  do  not  have  the  capacity  to  solve  larger  and  more  complex  assignments  for  larger  business  customers  (Erhvervs-­‐  og  Bygdogestyrelsen,  2007).  In  a  one  man  business  there  will  be  little  room  for  diverse  expertize  and  good  designer  will  likely  not  have  the  time  to  be  a  good  businessman.  Furthermore  the  unemployment  rate  amongst  designers  is  twice  as  high  as  for  the  rest  of  the  Danish  workforce,  amongst  the  employed  designers  25-­‐50%  do  not  work  with  design#.  The  area  of  interest  for  this  business  concept  has  been  to  support  these  designers  in  easing  the  process  of  having  their  industrial  design  ideas  put  into  production.  In  order  to  reach  this  goal  we  have  worked  on  an  e-­‐business  concept  we  named  Virtual  Showroom.      Virtual  Showroom  functions  as  an  intermediary  between  the  designer  and  the  production.  The  business  will  make  money  on  taking  a  commission  on  sold  ideas  (between  designers  and  production  companies).  The  main  platform  for  the  business  will  be  a  website,  on  which  designers  can  upload  their  ideas.  Other  designers  and  site  visitors  can  rate  these  different  ideas.  The  highest  rated  idea  will  then  be  put  into  production  by  one  of  Virtual  Showrooms  production  partners.  

 

 1.2   RESEARCH  QUESTION      To  support  this  report  that  describes  Virtual  Showroom  as  a  e-­‐business  concept,  the  following  research  question  has  been  formulated:      On  the  basis  of  our  own  analysis,  can  Virtual  Showroom  prove  to  be  a  sustainable  concept  on  the  Danish  market?  

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1.3 METHOD  &  THEORY    The  report  is  divided  into  seven  main  chapters  including  project  introduction,  discussion  and  conclusion.  The  first  chapter  will  be  an  introduction  to  the  rapport  followed  by  the  second  chapter,  which  will  introduce  the  business  concept.  In  chapter  three  we  present  our  business  model  where  we  dive  deeper  into  describing  the  business  and  consider  the  areas  and  aspects  that  are  relevant  to  Virtual  Showroom.  Chapter  four  is  an  analysis  of  the  internal  and  external  environment  of  the  business,  which  leads  to  

rapport  will  end  with  a  discussion  (chapter  six)  and  a  conclusion  (chapter  seven)  about  whether  the  concept  is  sustainable  and  worth  investing  money  in.    

 

   

Figure  1:  Project  process  map.  This  map  is  a  model  of  our  project  process,  and  shows  some  of  the  interconnections  between  the  chosen  methods.      

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To  explain  the  correlations  between  the  analyses  and  models  applied  in  this  report,  we  have  created  a  map  of  the  project  process  (figure  1).  The  map  is  a  graphical  illustration  that  is  meant  to  map  how  research  and  analytic  work  has  been  used  in  the  process,  and  how  they  are  connected.  The  map  explains  these  interconnections  and  our  process,  both  chronologically  and  methodically.    We  are  aware  that  in  an  analytic  process  like  this,  every  method  and  analysis  will  influence  each  other  to  some  extent.  The  findings  from  each  method  will  most  likely  go  back  and  change  some  factors  in  a  previous  or  a  following  model  or  analysis.  This  is  however  not  what  we  want  to  illustrate  using  this  map,  but  we  want  to  clarify  how  the  findings  from  each  method  are  important  in  order  to  continue  towards  the  final  step,  the  marketing  strategy  and  a  conclusion.      The  project  process  map  is  read  vertically  from  the  top  and  down,  towards  defining  a  marketing  strategy.  The  starting  point  for  the  project  is  the  vision  and  mission  of  the  business.  We  chose  this  starting  point  because  it  decides  what  we  are  going  to  examine.  The  vision  and  mission  leads  to  the  development  of  a  business  model,  mainly  inspired  by  Chaffey  (2009)  and  Osterwalder  and  Pigneur  (2010).  To  complete  the  business  model  several  considerations  and  analyses  need  to  be  conducted,  which  the  map  illustrates.  This  includes  defining  and  analysing  will  be  selected  by  doing  a  segmentation.  We  also  define  and  analyse  our  stakeholders  to  ensure  that  the  business  concept  stays  interesting  and  lives  up  to  the  expectations  from  the  most  important  stakeholders.  After  completing  the  business  model  we  continue  analysing  the  environment  of  the  business.    The  investigation  of  the  external  environment  will  start  with  a  market  research.  We  analyse  the  existing  market  and  similar  businesses,  in  order  to  determine  the  competitive  situation.  This  is  relevant  to,  what  strategies  we  chose  in  the  end  in  order  to  differentiate  from  the  potential  competitors  on  the  market.  The  investigation  of  the  external  environment  will  end  up  with  a  SLEPT  analysis  (Andersen  et.  al,  2007,  p.  

-­‐analysis  (Chaffey,  2009,  p.274).    

gathered  divisionalized  form.  The  organizational  structure  is  crucial  for  the  working  environment  and  the  decision-­‐making,  whether  our  organization  is  decentralized  or  centralized.  Afterwards,  we  will  shortly  mention  the  most  important  internal  factors  that  exist  within  Virtual  Showroom,  which  leads  us  to  the  SWOT  analysis.  The  main  theorists  used  in  the  environmental  chapter  are  Chaffey  (2009)  and  Mintzberg  (1980).      To  sum  up  on  the  findings  and  relevant  factors  from  all  previous  work,  these  results  will  be  applied  in  a  SWOT  model  that  as  well  as  defining  external  opportunities  and  threats,  also  identifies  the  internal  strengths  and  weaknesses.  Together,  these  factors  will  get  analysed  in  order  to  continue  with  the  marketing  strategy  of  Virtual  Showroom.      Virtual  Showrooms  marketing  strategy  is  developed  on  the  basis  of  the  SOSTAC  model  (Smith,  1999  cited  in  Chaffey,  2009,  p.  418).  The  SOSTAC  model  helps  revise  the  objectives  and  vision  of  the  business,  and  helps  develop  strategies  and  initiatives,  which  aims  at  maximizing  the  strengths  and  opportunities  from  the  SWOT  analysis,  as  well  as  minimizing  the  weaknesses  and  threats.  We  go  through  the  six  steps  

prepare  a  marketing  mix  with  inspiration  from  Chaffey  (2009,  p.449).  Altogether,  ending  up  with  a  marketing  plan  that  decides  how  to  communicate  and  serve  our  target  group  and  stakeholders  to  achieve  the  objectives  of  the  e-­‐business.    

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1.4   LIMITATIONS  

 The  resources  available  to  our  research  and  evaluation  of  the  concept  are  restricted  by  the  relatively  limited  project  resources  of  a  six  person  group.  First  off,  given  the  fact  that  our  concept  is  still  in  an  early  stage,  we  have  not  made  a  detailed  economic  strategy.  To  develop  this,  it  would  require  more  research  and  contact  to  one  or  more  key  players.      When  it  comes  to  choice  of  target  group  and  analysis  of  the  environment,  best  case  scenario  would  be  to  execute  a  market  research  and  analyse  customer  data  in  order  to  evaluate  and  select  the  most  profitable  target  segments  (Chaffey,  2009,  p.  437).  It  would  be  beneficial  to  gather  customer  data,  conducted  a  demand  analysis,  and  analyse  current  market  size  and  value,  future  market  size,  potential  revenue  and    market  share.  We  chose  to  make  a  segmentation  based  on  estimations  from  our  own  online  research.  We  are  aware  that  the  analysis  will  be  based  on  weak  data  and  that  it  will  affect  the  final  discussion  (Kuniavsky,  2007)  

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2.  CONCEPT  DESCRIPTION      The  following  section  is  dedicated  to  elaborate  the  concept;  Virtual  Showroom.  In  order  to  understand  what  our  business  model  is  built  on,  a  vision  and  mission  has  been  created.  In  the  concept  description  a  thorough  description  of  the  different  aspect  of  the  concept  is  provided.  In  addition  to  this  a  conceptual  model  has  been  created  in  order  to  understand  the  user  experience  of  the  concept.  Finally  we  describe  what  kind  of  e-­‐business  Virtual  Showroom  is.  

 

2.1   VISION  &  MISSION    The  vision  is  a  long-­‐term  view,  describing  how  Virtual  Showroom  would  like  to  be  in  the  world  which  it  operates.  The  mission  on  the  contrary,  describes  how  Virtual  Showroom  is  going  to  achieve  its  goal.    Vision  Being  the  intermediary  that  enables  designers  to  showcase  their  ideas,  and  potentially  having  them  produced.    Mission  Virtual  Showroom  seeks  to  make  the  vision  possible  by  developing  a  platform  with  a  design-­‐upload  functionality  and  additionally  a  rating-­‐system  that  allows  site-­‐visitors  to  rate  the  best  idea,  so  that  the  best  industrial  designs  will  be  produced.  In  order  to  enable  the  manufacturing,  the  organisation  behind  Virtual  Showroom,  will  convince  potential  investors  to  buy  the  legal  rights  to  highest-­‐rated  designs.  Finally  the  website  contains  a  log-­‐in  and  a  community  for  both  visitors  and  designers.        

2.2   CONCEPT  DESCRIPTION    

The  Virtual  Showroom  concept  aims  to  help  people  who  have  ideas  within  industrial  design1,  to  get  their  ideas  sold  and  put  into  production,  by  functioning  as  an  intermediary  between  the  designer  and  production  and  sales.  Virtual  Showroom  will  make  money  on  taking  a  commission  on  sold  ideas  (between  designers  and  production  companies).      The  main  platform  for  the  business  will  be  a  website,  on  which  designers  can  upload  their  ideas  for  free.  Other  designers  and  site  visitors  can  rate  these  different  ideas.  The  highest  rated  idea,  typically  of  the  month,  will  then  be  put  into  production  by  one  of  our  various  production  and  business  partners.      Production  companies  will  then  buy  the  right  to  the  idea  from  the  designer.  The  designer  will  not  negotiate  the  price  with  the  production  company,  but  instead  be  faced  with  a  fixed  reward  information  provided  by  Virtual  Showroom.  Production  will  also  handle  where  the  product  is  to  be  sold  and  at  what  pricing.      

                                                                                                                     1  For  our  concept  development  we  define  industrial  design  as  arts  and  crafts,  which  can  appear  as  anything  from  furniture  to  kitchen  utensils  and  useful  inventions  

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Virtual  Showroom  will  take  on  the  role  of  promoting  and  showcasing  all  the  winning  products  on  the  website,  where  visitors  and  designers  will  be  able  to  view  or  even  follow  the  link  to  where  the  product  is  sold.          Furthermore  there  is  an  open  online  community  on  the  website,  in  which  the  designers  and  visitors  can  interact  with  each  other.  This  sphere  will  be  the    meeting-­‐place  where  they  advise,  critique  and  help  each  other.  In  order  to  upload  ideas,  comment  and  discuss,  one  needs  to  become  a  member  on  the  website  and  create  a  profile.    

 

   

Figure  2:  Mock-­‐up.  This  sketch  shows  how  we  imagine  Virtual  Showroom  will  look  like.    Figure  2  is  a  mock-­‐up  of  Virtual  Showroom.  The  design  is  not  based  on  any  empirical  data  or  user-­‐needs  and  because  of  this  it  is  not  a  design  proposal,  as  this  would  take  more  design  and  development  work.  Instead  the  mock-­‐up  is  meant  to  create  a  better  understanding  of  the  concept  as  the  visualization  shows  the  most  important  features.      

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2.2.1  CONCEPT  MODEL    

 Figure  3:  Concept  model.  This  illustration  describes  how  the  designer  experiences  our  concept.    In  order  to  communicate  the  concept,  we  created  a  graphical  concept  model  (see  figure  3).  The  model  describes  the  concept  from  the    point  of  view,  and  also  shows  which  other  parties  are  involved  in  the  process.  It  clarifies  what  will  happen  in  given  situations,  from  a  designer  submitting  a  design  idea,  to  a  partner  buying  the  idea.  The  white  area  represents  what  happens  within  the  company,  and  everything  outside  this  area  is  external.  In  the  illustration  the  concept  is  divided  into  six  steps:      1:  The  designer  submits  an  idea  to  the  website  for  free.      2:  All  ideas  need  to  be  evaluated  and  approved  by  Virtual  Showroom  before  they  are  published.  It  is  not  up  to  Virtual  Showroom  to  decide  if  an  idea  is  good  or  bad,  but  to  catch  frivolous  submissions.    3  and  4:  Designers  and  site-­‐visitors  vote  for  ideas.  The  top  rated  idea  will  be  presented  to  Virtual  

-­‐  the  production  and  sales  companies  -­‐  who  have  agreed  to  produce  the  most  rated  and  popular  item.    5:  The  production  company  pays  the  winning  designer.  Virtual  Showroom  charge  a  commission  fee  from  the  money  the  designer  receives.    6:  The  site-­‐visitors  can  view  all  winning  products  and  can  follow  a  link  to  the  external  web-­‐shops.  

 

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2.2.2  VIRTUAL  SHOWROOM  AS  A  TYPE  OF  BUSINESS  In  order  to  narrow  the  scope  of  the  following  analysis  of  Virtual  Showroom  as  a  business  this  section  aims  to  define  Virtual  Showroom  as  a  type  of  business.  Firstly  Virtual  Showroom  is  an  e-­‐business  in  the  sense  that  it  is  a  business  that  mainly  operates  online,  in  form  of  the  website  and  communication  between  partners  online.  Secondly,  in  the  sense  that  it  will  employ  e-­‐business  strategies  and  overall  operations  (Chaffey,  2009,  p.  13).  The  business  will  employee  electronic  tools  in  every  day  operations,  it  will  realise  strategies  for  its  online  presence  e.g.  the  e-­‐marketing  strategy  described  later.  The  fact  that  contact  between  designers,  visitors,  production  and  Virtual  Showroom  is  handled  on  the  website  as  a  primary  chabusiness,  as  there  is  no  retail  distribution  network  (Chaffey,  2009,  p.  88).    

-­‐business  and  e-­‐commerce  and  the  relationship  between  them,  we  consider  e-­‐commerce  as  a  subset  of  e-­‐business  (figure  1.3c  in  Chaffey,  2009,  p.14).  A  widespread  view  on  the  term  e-­‐commerce  is  an  online  based  company  like  a  web-­‐shop,  where  all  financial  transactions  are  perfor definitions  Virtual  Showroom  is  also  considered  to  be  an  e-­‐features  utilize  e-­‐commerce  elements.  Most  pre-­‐  and  post-­‐sale  activities  are  performed  electronically.  Pre-­‐sale  activities,  like  designers  presenting  their  ideas  and  visitors  voting  for  them.  Post-­‐sale  activities,  like  feedback  to  visitors  on  the  produced  design  (2009,  p.  11).  Virtual  Showroom  could  be  viewed  as  an  e-­‐commerce  from  a  communicative  perspective  as  described  by  Kalakota  and  Whinston  (1997,  cited  in  Chaffey  p.  10).    Virtual  Showroom  can  be  defined  as  a  virtual  organization.  According  to  Chaffey  a  virtual  organization  is  

o  operate  without  clearly  defined  physical  boundaries  between  different  functions.  It  provides  customized  services  by  

(2009,  p.  354).    

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3.  BUSINESS  MODEL      3.1     INTRODUCTION    The  following  chaporganization.  Since  our  business  model  is  for  a  start-­‐up  company  (in  contrast  to  an  already  existing  business  becoming  an  e-­‐business)  this  business  model  will  be  vital  to  provide  funding  from  venture  capitalists  (Chaffey,  2009,  p.  77).    There  exist  quite  a  lot  of  definitions  of  what  a  business  model  is.  We  chose  to  work  with  the  definitions  

The  rationale  of  how  an  organization  creates,  delivers  and  captures  value A  summary  of  how  a  company  will  generate  revenue,  identify  its  product  offering,  value-­‐added  services,  revenue  sources  and  target  costumers2009,  p.  77).  We  made  this  choice  afresearch  (2010)  .    

stakeholders,  value  proposition,  cost  &  revenue  and  channels,  to  account  for  how  we  see  the  concept  creating  value  on  the  market.      What  kind  of  business  we  are  talking  about  is  also  very  important  to  the  business  model.  E-­‐business  is  a  thriving  subcategory  within  business  models  and  under  this  definition  lays  many  types  of  models.  Timmers  (1999,  cited  in  Chaffey,  2009,  p.  78)  have  categorized  different  types  of  business  models  into  11  different  types.  In  that  terminology  we  would  characterize  Virtual  Showroom  as  being  a  Collaboration  platform2.  The  Zott  research  also  gives  a -­‐business  types  that  can  be  used  to  see  Virtual  Showroom  in  different  lights.  For  example  is  the  Virtual  Showroom  an  

 et  al.  p.  12)  and  a    

 Throughout  the  whole  report  we  define  Virtual  Showroom  with  a  lot  of  labels  trying  to  pin  down  the  essence  of  the  concept    this  can  be  faulty,  especially  when  using  theory  that  is  not  always  up  to  date,  with  the  Internet  being  in  such  a  rapid  development.  We  do  not  see  Virtual  Showroom  as  being  labeled  to  one  category  of  businesses,  but  instead  we  wish  it  to  be  looked  at  as  a  new  player  in  a  somewhat  new  

   

model,  see  figure  4  to  give  an  overview  of  Virtual  Sh  

                                                                                                                     2   -­‐  These  enable  collaboration  between  businesses  or  indChaffey,  2009  p.  78).    

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   Figure  4:  Graphical  overview  of  our  business  model.  business  strategies.  This  model  is  an  adaption  of  Osterwalder  and  Pigneur  (2010,  p.  44)  

 

 

3.2   TARGET  GROUP    It  is  important  for  Virtual  Showroom  to  build  their  business  around  the  proper  target  group.  Based  on  figure  5,  it  is  necessary  to  start  with  identifying  the  market  for  different  customer  segments.  Similar  characteristic  and  needs  are  categorized  to  provide  a  overview  of  the  potential  of  the  market,  and  evaluate  which  segments  will  be  most  profitable.  Afterwards  Virtual  Showroom  should  make  an  effort  

revenue.  We  took  a  conscious  decision  on  which  segments  to  target  and  which  segments  to  ignore.  To  choose  the  right  segment,  see  figure  5  step  2,  one  must  group  the  potential  customers  into  distinct  segments  with  common  needs  so  each  can  be  evaluated.  Once  the  decision  of  which  target  group  to  address  was  made,  we  carefully  designed  the  business  model  around  understanding  that  specific  group  

analysis,  we  will  handle  the  positioning  on  the  market  (Step  three),  which  should  be  taken  into  consideration  when  choosing  a  target  group.  When  we  have  finished  analysis  on  three  steps,  we  are  able  to  plan  the  proper  marketing  strategy,  where  we  will  figure  out  how  we  want  to  deploy  our  resources  in  order  to  achieve  our  plan  (Step  4).  The  positioning  and  planning  of  the  marketing  strategy  will  be  further  discussed  in  marketing  mix.  

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Figure  5:  Target  marketing  model.  This  illustration  shows  the  stages  in  target  marketing  strategy  development,  this  model  is  an  adaption  from  Chaffey  (2009,  p.  437)  

 

3.2.1  SEGMENTATION  Virtual  Showroom  is  an  intermediary  website  that  targets  people  that  are  interested  in  designing  

 in  that  sense  that  everyone  can  design  at  different  levels.  Even  though  the  designers  do  not  necessarily  have  their  own  business,  they  do  sell  a  service  (a  design  idea)  and  are  therefore  categorized  as  businesses  themselves.  On  that  notion  the  main  target  group  can  be  perceived  as  a  business  which  makes  Virtual  Showroom  a  B2B  (Chaffey,  2009,  p.26).      The  segmentation  does  not  focus  on  specific  demographics,  since  Virtual  Showroom  wants  to  target  everyone  interested  in  getting  their  designs  produced.  It  could  be  the  promising  design  student,  the  experienced  carpenter,  the  stay-­‐at-­‐home  mom  interested  in  industrial  design,  or  a  homeless  guy  with  a  great  idea  and  access  to  the  Internet.  The  brilliant  part  is  that  everyone  is  a  designer  at  Virtual  Showroom;  thereby  targeting  a  broad  audience  within  a  niche  market.  Given  that  we  do  not  want  to  exclude  any  potential  users,  there  is  no  age,  gender,  geographic  or  life-­‐cycle  criteria.  What  is  important  is  the  attitudinal  variable  (Chaffey,  2009,  p.438).  As  a  designer  on  our  website,  there  will  be  some  risk  attached  to  displaying  unique  design  ideas  to  potential  competitors  (see  SLEPT  in  section  4.1.1).  Based  on  this;  our  concept  targets  designers  who  are  willing  to  take  some  risks.    

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 It  was  discussed  whether  it  would  be  profitable  for  our  business  to  be  on  the  international,  European  or  just  Danish  market.  Given  that  we  do  not  yet  know  where  the  break-­‐even  cost  are,  we  will  start  will  the  Danish  market.  Since  we  believe  that  there  is  enough  creative  people  in  Denmark  who  wishes  to  have  their  ideas  put  into  production,  the  Virtual  Showroom  should  start  with  being  a  Danish  service.  If  Virtual  Showroom  is  a  success  it  should  rethink  whether  it  should  geographically  expand  this  segment  or  not.    

 

   Figure  6:  Segmentation  model.  This  model  illustrates  the  segmentation  process.  The  model  is  an  adoption  from  International  markedsføring,  Trojka  (2007).      SELECTING  SEGMENTS  

Based  on  estimations  and  on  online  market  research  (see  4.1.2  Market  research  and  competitor  analysis  chapter)  different  segments  has  been  selected,  thereby  making  identification  of  the  segment-­‐shared  characteristics  and  needs  possible.  The  different  needs  of  the  target  group  depend  on  design  skills  and  where  the  individuals  are  in  the  process  of  creating  and  manufacturing  design.  The  most  common  characteristics  for  all  three  segments,  is  that  they  all  need  capital  for  production,  which  is  their  main  motivation  for  signing  up.  These  are  the  selected  segments:    Un-­‐experienced:  Designers  with  none  or  only  a  little  design  experience,  who  needs  to  show  their  ideas  to  others  in  order  to  make  it  real  and  start  being  a  designer.  They  need  this  platform  to  develop  their  skills  through  feedback  on  their  ideas.      Experienced:  Experienced  designers  who  have  not  had  success  yet.  It  is  our  thesis  that  experienced  people  that  already  have  worked  or  is  studying  design  is  more  likely  to  be  interested  in  the  service  we  provide.      Professional:  Self-­‐employed  designers  working  in  their  own  small  business,  who  needs  capital.    So  to  summarize;  our  target  group  is  Danish  people  interested  in  industrial  design  with  different  levels  of  design  skills,  who  are  interested  in  getting  their  design  ideas  manufactured.      

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3.3   STAKEHOLDERS    Osterwalder  &  Pigneur  describes  their  building  bl

 (2010,  p.  38).  The  concept  description  of  the  Virtual  Showroom  shows  that  the  business  is  dependent  on  quite  a  few  key  partnerships  (see  chapter  2  in  particular  concept  model  in  figure  3).  Due  to  the  complexity  of  these  relationships  we  have  decided  to  elaborate  the  analysis  of  this  block  with  a  stakeholder  analysis.  A  stakeholder  analysis  is  a  management  tool  that  can  be  used  to  gain  an  overview  of  the  stakeholders  in  a  business,  allowing  management  to  manage  and  prioritize  the  attention  that  a  given  group  should  receive  (Thomsen,  2009,  p.  499).    

   (Thomsen,  2009,  p.  499).  In  this  section  the  focus  is  on  the  primary  stakeholders,  they  are  defined  as  the  groups  whose  participation  is  crucial  for  the  survival  of  the  company  (Thomsen,  2009).  The  term  primary  stakeholders  are  used  interchangeable  with  Osterwalder  

   The  target  group  for  Virtual  Showroom  has  previously  been  outlined  as  the  designers;  these  are  obvious  external  stakeholders  in  the  business.  Furthermore  each  of  the  parties  mentioned  in  the  concept  model  are  stakeholders.  Including  these  the  following  list  of  potential  stakeholders  has  been  identified:  

Designers     Potential  new  designers  to  the  Virtual  Showroom   Existing  designers  in  the  Virtual  Showroom    

Visitors   Potential  visitors  of  the  Virtual  Showroom     Re-­‐visitors  of  the  Virtual  Showroom,  these  might  migrate  into  buyers  of  the  final  

product     Production  companies    

Potential  new  contacts   Existing  companies  that  has  already  used  our  service  

The  employees  of  Virtual  Showroom   Competitors   Advertisers    

   Some  of  the  groups  have  been  divided  in  to  existing  and  potential,  obviously  at  start-­‐up  Virtual  Showroom  will  only  have  potentials  in  each  group,  but  from  the  get-­‐go  it  is  necessary  to  have  a  strategy  on  how  to  recruit  new  designers,  visitors  and  production  partners  as  well  as  on  how  to  maintain  existing  in  the  future.  For  this  reason  these  are  described  as  separate  stakeholder  groups.  The  groups  that  have  already  associated  themselves  with  our  company  and  the  ones  that  has  not.    All  the  stakeholder  groups  are  analyzed  according  to  interest  versus  power  in  the  below  sections.  The  mapping  has  been  applied  in  a  matrix  as  described  by  Mendelow  (1991,  cited  in  Olander,  2003,  p.  60;  Cornelissen  ,  2011,  p.  49).    Designers  Existing:    It  is  completely  essential  that  Virtual  Showroom  takes  care  of  the  designers  that  use  its  service  and  that  the  business  creates  tangible  value  for  them,  as  they  will  have  little  incentive  to  submit  ideas  again  if  their  participation  in  Virtual  Showroom  does  not  generate  any  interest  for  their  designs.  As  these  

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designers  and  their  ideas  are  the  main  source  of  income  for  the  Virtual  Showroom,  keeping  these  satisfied  must  have  a  high  level  of  importance  in  any  strategy.    As  described  in  the  target  group  section  above,  (see  3.2  -­‐  target  group)  the  designers  belong  to  several  different  groups;  however  there  will  likely  be  some  degree  of  networking  between  designers.  Having  these  existing  designers  advocate  the  website  to  other  designers  will  likely  be  some  of  the  best  marketing  the  business  can  get  in  order  to  recruit  additional  designers.  From  such  perspectives  this  group  will  have  some  amount  of  influence  on  the  business.  Once  they  are  involved  in  the  project  they  will  have  shown  some  interest  in  Virtual  Showroom  and  if  it  generates  business  for  them  they  will  have  high  interest.  In  the  power  vs.  interest  matrix  this  will  place  this  group  somewhere  between  keep  satisfied  and  key  player.    Potential:  Turning  the  view  to  the  designers  that  are  not  yet  involved  in  Virtual  Showroom  are  a  important  potential  revenue  for  the  business.  Therefore,  increasing  the  amount  of  designers  will  likely  be  an  obvious  goal  and  be  a  guide  in  the  development  of  the  business.  For  this  reason  this  group  does  influence  the  decisions  made  within  the  company.    As  previously  described  in  the  target  group  section  the  designers  targeted  for  Virtual  Showroom  are  a  very  diverse  group  and  it  is  possible  that  the  different  sub-­‐segments  of  designers  will  have  different  levels  of  influence  or  power  within  the  business.  The  fact  that  this  group  is  not  yet  active  contributors  means  that  they  either  do  not  know  that  the  Virtual  Showroom  exists  or  that  they  simply  do  not  believe  that  it  will  provide  a  service  that  is  interesting  for  them;  hence  they  have  a  very  low  level  of  interest  in  the  business.  This  group  is  placed  in  the  minimal  effort  section  of  the  power  vs.  interest  matrix.  Once  they  are  aware  of  the  concept  exists  their  power  will  significantly  increase  and  hopefully  their  interest  along  with  the  effort  that  is  made  to  recruit  them  to  Virtual  Showroom.    Visitors  Re-­‐visitors:    The  visitors  of  Virtual  Showroom  are  an  important  component  in  the  overall  concept.  They  create  value  for  the  designers  as  they  make  their  designs  interesting  for  the  producers.  The  showroom  may  also  provide  a  type  of  testing  ground  for  the  designers  to  get  feedback  on  their  ideas.  Therefore  visitors  will  indirectly  create  value  to  the  business  and  it  is  important  to  keep  them  satisfied  so  that  they  will  return  and  keep  rating  design  ideas  and  adding  content.  Furthermore  these  visitors  are  important  to  us  as  they  may  become  ambassadors  for  the  concept  and  recruit  new  visitors  and  designers.  The  interest  that  these  users  will  have  is  likely  to  be  on  a  leisure-­‐level,  but  they  will  not  have  a  personal  or  economic  stake  in  the  project,  like  the  designers  or  productions  companies.  This  group  is  placed  somewhere  between  keep  satisfied  and  keep  informed  in  the  power  vs.  interest  matrix.    Potential  new  visitors  within  the  interesting  segment:    Like  the  potential  new  designers,  these  visitors  either  do  not  know  of  Virtual  Showroom  yet  or  do  not  believe  that  it  is  able  to  provide  them  with  an  interesting  service.  Therefore  they  have  a  low  interest.  They  will  obviously  have  good  potential  for  the  company  as  they  may  migrate  into  visitors,  hence  they  will  have  some  influence  on  any  given  business  strategy  on  how  to  increase  their  numbers.  In  the  power  vs.  interest  matrix  they  are  placed  in  the  minimal  effort  section,  but  close  to  the  keep  informed.    Production  companies  

Existing:    As  it  is  in  the  contact  and  sales  between  the  designers  and  the  production  companies  that  Virtual  

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Showroom  will  generate  its  primary  income,  these  companies  will  obviously  play  an  important  part  in  the  business  concept.      In  some  sense  the  product  that  Virtual  Showroom  offers  to  these  companies  is  interest,  interest  that  the  

has  will  likely  be  dependent  on  the  success  of  that  given  product.  That  success  will  likely  be  for  a  given  product  to  generate  good  revenue  for  the  company,  but  it  is  also  possible  that  an  association  with  up-­‐and-­‐coming  and  innovative  designers  may  generate  good  marketing  value  for  a  given  company.  Hopefully  the  visitors  of  Virtual  Showroom  will  help  to  ensure  that  only  products  that  will  generate  good  sales  will  be  put  into  production,  hence  make  it  more  likely  for  the  production  companies  to  use  the  service  again.  Virtual  Showroom  will  also  try  to  create  value  for  the  companies  when  displaying  the  final  products  on  the  website,  with  links  to  the  production  companies  respective  web-­‐shops  (see  figure  2  -­‐  mock-­‐up).  Existing  production  companies  that  choose  to  use  Virtual  Showroom  again  will  likely  have  a  high  interest  in  the  concept.      The  power  that  these  companies  have  will  likely  be  dependent  on  the  number  of  production  companies  that  uses  Virtual  Showroom.  In  the  start-­‐up  phase  the  business  will  likely  have  very  few,  their  power  is  likely  to  be  very  high;  a  start-­‐up  business  will  have  great  difficulty  in  ignoring  their  initial  income  sources.  Further  down  the  line  the  business  will  likely  not  be  as  dependent  on  single  production  companies  and  their  power  will  decrease.  This,  places  these  companies  somewhere  between  keep  informed  and  key  player  in  the  power  vs.  interest  matrix.      Potential:  As  it  was  the  case  with  potential  designers  and  potential  visitors,  these  will  either  not  have  heard  of  the  concept  yet  or  simply  believe  the  Virtual  Showroom  does  not  provide  a  service  that  will  generate  any  value  for  them.  Therefore  their  interest  in  the  company  is  low.      

hopefully  get  a  good  price  for  the  idea,  increasing  the  competition  between  the  production  companies  will  generate  value  for  the  business.  Increasing  competition  will  logically  happen  when  the  numbers  of  the  interested  production  companies  increases.  For  this  reason  it  is  important  to  continuously  be  aware  of  recruiting  more  companies  and  this  goal  will  have  some  influence  in  a  given  business  strategy.  This  places  the  potential  production  companies  in  the  minimal  effort  section  of  the  power  vs.  interest  matrix.      The  employees  of  the  Virtual  Showroom  The  employees  of  the  business  are  the  obvious  internal  stakeholders.  They  have  a  high  interest  in  the  

vision  and  that  generates  an  appropriate  profit.  However  they  may  have  lower  interest  in  the  actual  service  that  the  Showroom  provides.    With  relatively  few  employees  (see  4.2.1  -­‐  Organization  structure)  the  power  of  the  individual  will  be  higher,  the  success  and  in  the  beginning  the  survival  of  the  business  will  be  dependant  on  the  effort  of  the  employees.  This  places  the  employees  high  in  power  and  relatively  high  on  interest  in  the  key  player  section  of  the  power  vs.  interest  matrix.    Competitors  The  competitors  of  the  Virtual  Showroom  will  be  described  in  the  below  section  on  External  factors  (see  4.1.2  -­‐  Market  research  and  competitor  analysis).  Obviously  the  Virtual  Showroom  will  in  start  up  not  represent  any  real  threat  to  its  potential  competitors,  as  the  success  of  the  business  hopefully  increases  

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the  interest  of  competitors  will  heighten.  The  power  of  competitors  will  equally  increase  as  their  numbers  or  success  increases.  Potential  upcoming  or  existing  competitors  with  very  similar  services  will  also  influence  the  success  of  the  Virtual  Showroom,  so  changes  in  the  market  may  greatly  influence  the  level  of  power  that  the  competitors  have.  This  initially  places  competitors  in  the  minimal  effort  section  of  the  power  vs.  interest  matrix.      Advertisers  It  is  possible  that  it  over  time  will  be  interesting  for  the  Virtual  Showroom  to  use  advertisers  on  the  website.  Should  this  be  the  case  the  interest  of  potential  advertisers  will  likely  be  dependant  on  the  number  of  visitors  on  the  website.  The  power  of  the  advertisers  will  be  influenced  by  how  dependent  the  business  is  on  the  additional  income  that  the  advertisements  generate.  However  it  is  a  likely  assumption  that  if  the  business  becomes  highly  dependant  on  the  advertisers  it  is  because  it  has  little  income  on  design  ideas,  likely  because  they  will  have  few  designers,  following  fewer  visitors  and  finally  fewer  advertisers.  In  this  case  the  power  of  the  advertisers  will  be  irrelevant  as  they  will  no  longer  have  any  interest  in  the  business.  Potential  high  interest  and  low  power  of  the  advertisers  places  them  in  the  keep  informed  section  of  the  power  vs.  interest  matrix.      POWER  VS.  INTEREST  GRID  

The  above  allows  for  the  following  map  of  stakeholders.    

 

   Figure  7:  Stakeholder  analysis  model.  This  model  both  illustrates  how  important  and  powerful  the  various  stakeholders  are.  This  map  is  built  on  a  model  of  Mendelow  (cited  in  Olander,  2003,  p.  60)    It  will  be  important  for  the  company  to  keep  regulating  this  map  as  it  changes  in  size,  revenue  or  the  market  around  it  changes.  Initially  the  first  designers,  production  companies  and  visitors  that  associate  themselves  with  Virtual  Showroom  should  receive  a  high  level  of  interest.  Furthermore  the  employees  will  be  very  important  in  this  initial  phase.    The  stakeholders  as  described  above  shows  that  the  key  players  in  particular  are  heavily  dependent  on  each  other.  The  interest  and  following  the  numbers  of  the  companies  is  dependent  on  the  visitors  rating  ideas.  The  interest  of  visitors  is  dependent  on  the  design  idea  and  the    interest  will  be  dependent  on  the  numbers  of  visitors  and  production  companies.  So  in  order  to  ensure  success  of  the  business  it  is  necessary  to  satisfy  and  successfully  recruit  each  group  of  stakeholders,  and  preferably  all  at  once.  This  constitutes  a  significant  challenge  in  the  sustainability  of  the  concept.  

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3.4   VALUE  PROPOSITION    

The  reason  for  conducting  a  value  proposition  is  to  try  and  identify  all  values  Virtual  Showroom  can  offer  to  the  different  stakeholders.  Thereby  Virtual  Showroom  can  be  able  to  make  these  visible  through  clever  design  and  marketing.  Also  knowing  what  Virtual  Showroom  can  offer  makes  it  easier  to  evaluate  and  improve  upon.    Designers  There  is  an  obvious  value  for  designers  in  selling  their  ideas  for  money,  but  also,  Virtual  Showroom  believes  that  there  is  value  for  designers  in  being  part  of  an  online  design  community  that  enables  them  to  speak  their  mind  and  interact  with  peers,  in  building  a  valid  portfolio,  in  strengthening  and  expending  their  connections  and  network  and  in  getting  noticed  in  the  design  sphere.    Virtual  Showroom  advertises  for  the  winning  products,  in  case  they  are  put  into  production,  from  the  website.  This  makes  the  value  more  tangible  for  the  designers.  Also  through  the  community  Virtual  Showroom  offers  various  amounts  of  user  generated  content  and  information.      In  comparison  to  rbeing  cheaper,  though  it  is  free  of  cost  if  the  idea  is  not  sold.  Therefore  Virtual  Showroom  will  try  to  make  the  perceived  quality/features  better,  offering  more  value.      Visitors  Website  visitors,  being  designers  or  other  users,  can  participate  in  the  community  equally.  Virtual  Showroom  imagines  that  this  will  seem  intriguing  to  users  with  an  interest  in  design,  or  working  within  the  field.  People  with  interest  in  new  designs  would  probably  value  the  influence  they  get,  when  rating  and  commenting  designs.    All  visitors  can  see  the  previously  winning  designs  and  if  they  want  to  and  go  the  web-­‐shops  of  the  production  companies  where  they  can  buy  the  products.    Virtual  Showroom  may  try  to  offer  some  sort  of  winnings  to  attract  as  many  visitors  as  possible.  Finally  Virtual  Showroom  offers  various  amounts  of  user  generated  content  and  information  through  the  community,  which  could  be  of  value  to  visitors.    Production  companies  The  production  companies  could  definitely  benefit  from  new  innovative  designs.  Choosing  the  highest  rated  idea  could  probably  result  in  choosing  something  most  customers  would  like,  keeping  in  mind  that  this  may  differ,  since  the  visitors  on  our  website  may  not  represent  the  costumers  of  the  production  companies  or  the  general  population.    Furthermore  they  would  benefit  from  the  PR  they  would  get  by  positioning  themselves  as  a  company  willing  to  help  out  new  designers.  This  would  positively  influence  their  brand.  Again,  we  are  aware  that  this  may  differ.  It  is  not  all  companies  that  may  benefit  from  this  e.g.  high  end  brands  may  be  perceived  less  valuable  being  associated  with  new  unknown  designers.      The  production  companies  would  also  get  costumers  sent  directly  to  their  web-­‐shops,  through  our  direct  links  to  their  sites.  This  may,  to  some  extent,  increase  their  sales  and  SEO  (Search  Engine  Optimization).    Intermediacy  -­‐  Virtual  Showroom  Virtual  Showroom  would  get  a  commission  on  the  sold  ideas,  between  designers  and  production  companies.  Second,  Virtual  Showroom  could  make  money  on  advertisement  for  the  production  

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companies  and  or  other  relevant  ads.    With  a  large  community  Virtual  Showroom  could  receive  value  through  user  generated  content.    

 

3.4.1  THE  FLOW  OF  VALUES  

 

   

Figure  8:  Value  flow  model.  This  is  a  model  we  created  ourselves  in  order  to  show  the  flow  of  values.  It  both  illustrates  the  flow  and  the  character  of  the  different  values  between  the  different  stakeholders.    The  designers  submit  their  ideas  and  if  it  gets  sold,  as  a  consequence  of  receiving  the  most  votes,  they  will  earn  money  which  Virtual  Showroom  will  take  a  commission  from.  The  organization  Virtual  Showroom,  the  designers,  site  visitors  and  the  community  all  exchange  various  information  and  content  through  the  website.  Much  of  the  content  will  be  user  generated,  but  ultimately  the  quality  of  the  

community.      Virtual  Showroom  feeds  the  production  and  sales  companies  with  ideas  and  in  return  the  production  company  buys  some  of  these.  Furthermore  Virtual  Showroom  advertises  for  the  companies  on  the  website,  and  by  linking  to  an  external  web-­‐shop  they  will  forward  potential  customers.  In  return  Virtual  Showroom,  if  offering  ads,  receives  money.  Virtual  Showroom  gives  the  production  partners  goodwill  and  PR,  by  presenting  them  as  supporters  of  the  design  industry  who  wishes  to  encourage  designers  who  do  not  have  the  capital  themselves.  In  return  Virtual  Showroom  might  be  presented  on  the  production    websites,  which  would  give  Virtual  Showroom  PR  and  advertisement.  

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3.5   Value  chain    The  next  step  in  developing  Virtual  Showroom  could  have  been  to  create  a  supply  chain  model.  The  supply  chain  could  clarify  the  accusation  of  resources  and  the  transformation  into  products  and  services  which  are  then  delivered  to  the  costumers  (Chaffey,  2009,  p.  340).  The  model  can  give  an  overview,  which  ideally  can  result  in  revision  of  the  supply  chain  to  optimize  efficiency  at  a  lower  cost.  Due  to  lack  of  resources  it  has  not  been  conducted  yet.  If  we  were  to  make  this  analysis,  we  would  shape  it  according  to  our  product  character.  Since  Virtual  Showroom  offers  a  service,  this  would  mean  revising  the  analysis  to  some  degree.      

ly  chain  model.  This  means  that  the  focus  of  the  supply  chain  is  to  deliver  value  to  customers  who  are  actively  involved  in  product  and  service  specification.  In  practise  this  means  that  Virtual  Showroom  would  try  to  base  the  product,  and  develop  the  product  according  to  customer  needs  and  demands,  identified  through  market  and  costumer  research,  working  in  collaboration  with  costumers  to  develop  and  revise  the  service  product.  Whereas  a  push  supply  chain  model  would  suit  a  company  pushing  their  already  developed  product  onto  the  market.  (Chaffey,  2009,  p.347)    VALUE  CHAIN  MODEL  The  main  purpose  of  creating  this  model  is  to  optimise  the  value  for  the  users  of  Virtual  Showroom  and  

traditional  value  chain  by  Porter  (Chaffey,  2009,  p.  348)  that  shows  different  value  adding  activities,  and  clarifies  where  a  product  increases  its  value  when  it  passes  through  the  different  activities  in  the  chain.    As  the  traditional  value  chain  is  most  applicable  to  the  manufacturing  of  physical  products  and  Virtual  Showroom  offers  a  non-­‐physical  service,  the  model  displayed  in  figure  9  has  been  revised.  This  is  done  in  order  to  fit  the  intermediary  function  that  Virtual  Showroom  has,  and  the  fact  that  the  business  is  an  e-­‐business  that  primarily  exists  online,  by  Chaffey  referred   -­‐company  (Chaffey  2009,  s.88).  Activities  such  as  production  shown  in  the  traditional  model  are  not  performed  by  Virtual  Showroom.  For  this  part  an  external  value  chain,  highlighting  the  activities  performed  by  Virtual  Showrooms  partners,  could  have  been  generated.  (Chaffey,  2009,  p.  348).  Contrary  to  the  traditional  model  we  also  consider  the  needs  and  requirements  from  the  users,  which  is  the  starting  point  of  our  model.  

 Figure  9:  Value  chain.  This  model  illustrates  the  different  activities  that  Virtual  Showroom  is  going  through  in  order  to  deliver  the  value  proposition  to  the  customers.  Adaption  from  Porter  (1980,  cited  in  Chaffey,  2009,  p.  348)      Figure  9  shows  the  necessary  activities  between  identifying  the  needs  of  the  users  and  fulfilling  these.  The  designers  are  characterized  as  the  users,  and  they  are  the  ones  who  need  to  be  satisfied.  The  chain  

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Showroom  creates  value  to  its  users.      The  following  is  a  description  of  each  activity,  and  reveals  what  activities  are  most  important  in  order  to  fulfil  the  needs  of  the  users.      Market  research  Consists  of  investigating  both  users  and  existing  companies.  This  way  Virtual  Showroom  will  know  the  needs  and  desires  of  the  end-­‐users  and  by  being  better  at  fulfilling  these  needs  adding  value  to  the  services.  Investigating  the  market,  and  following  trying  to  differentiate  from  existing  services,  makes  Virtual  Showroom  more  valuable  to  the  end-­‐users.      Development  and  design  of  service  Further  investigation  needs  to  be  done  in  order  to  identify  needs  and  requirements  from  the  users,  so  Virtual  Showroom  (both  web-­‐design  and  service)  ends  up  fulfilling  these  needs.  The  web  design  shall  be  user-­‐friendly  and  reflect  what  Virtual  Showroom  stands  for.    Implementation  and  design  of  website  Design  and  programming  of  the  website  shall  be  an  iterative  activity  and  process,  again  in  order  to  pay  

functions  and  visual  expression,  and  hereby  enhancing  value  for  the  costumers.      Establishment  of  partnerships  It  is  important  that  this  is  an  on-­‐going  activity.  The  collaboration  with  the  partners  is  a  great  part  of  maintaining  the  business  and  making  sure  it  is  attractive  for  the  designers  to  upload  their  designs.  Without  various  partners  that  are  willing  to  buy  and  produce  the  winning  uploaded  designs,  the  business  cannot  exist,  since  much  of  the  value  for  the  designers  lies  in  getting  their  designs  sold  and  produced.  This  activity  creates  great  value  for  the  users.      Deliver  the  service  The  service  that  Virtual  Showroom  provides  is  cost  free  for  the  designer  until  their  idea  is  sold.  This  involves  that  the  designers  only  needs  to  spend  time  and  energy  on  uploading  ideas,  and  have  no  initial  financial  risk.  The  delivery  and  the  transaction  of  ideas  and  money  should  be  done  as  smoothly  as  possible.      

important  job  is  to  obtain  and  maintain  partner  relationships.  This  activity  needs  to  be  in  focus  all  the  time,  and  maybe  will  need  an  employee  to  manage  this  job.  Furthermore,  from  where  Virtual  Showroom  stands  right  now  (start-­‐up  phase)  they  need  to  invest  in  the  development  process  in  order  to  develop  the  website  from  the  customer  needs.    

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3.6   COSTS  &  REVENUE      Looking  at  the  financial  possibilities  of  the  concept,  there  is  a  lot  of  things  to  consider.  Without  putting  

s  model,  we  will  shortly  address  the  main  costs  and  revenues  of  Virtual  Showroom.    Virtual  Showroom  focuses  on  being  a  fairly  value-­‐driven  company.  Its  main  objective  is  to  help  designers  getting  put  into  production,  but  also  to  earn  money  on  this.  Realizing  that  making  a  substantial  profit  only  on  selling  designers  ideas  may  be  a  harder  task;  shareholders  should  have  some  drive  and  interest  in  the  field  and  the  vision.      Obviously  Virtual  Showroom  should  have  a  larger  revenue  than  its  costs,  to  be  able  to  stay  in  business,  

create  a  financial  strategy  for  Virtual  Showroom  that  would  account  for  a  detailed  revenue  map  that  would  explore  all  the  potential  income  possibilities  and  also  a  comprehensive  cost  analysis.      When  that  is  said,  stating  that  Virtual  Showroom  is  a  value-­‐driven  company  is  not  as  fitting  when  it  comes  to  its  cost  structure.  Virtual  Showroom  is  neither  cost-­‐driven  (always  focusing  on  minimizing  costs)  or  value-­‐driven  (not  focusing  on  cost,  but  on  value  creation),  but  falls  somewhere  in  between  as  most  companies  (Ostervalder  and  Pigneur,  2010,  p.  41).  Virtual  Showroom  would  want  to  create  value  for  their  designers,  but  still  maintaining  a  reasonable  budget  to  achieve  revenue.        

Although  Virtual  Showroom  has  outsourced  the  production  activity,  and  thereby  saves  money  on  production,  it  will  forfeit  sales  on  produced  items  which  potentially  could  be  a  large  income.  We  made  this  decision  so  Virtual  Showroom  did  not  have  to  deal  with  needing  technological  knowledge  of  production,  storage,  needing  a  sales-­‐department  and  more  important,  finding  the  funding.      Letting  Virtual  Showroom  manufacture  the  products  itself  at  a  reasonable  price  would  be  hard,  based  on  the  classic  supply-­‐comparison,  it  is  mostly  bigger  companies  like  Ikea,  who  produces  their  own  products,  because  they  can  reach  and  sell  in  a  mass-­‐market.      

 

COSTS  

To  determinate  the  costs,  it  is  important  to  look  at  the  key  activities  that  needs  to  be  done  (by  employees  and  external  help)  to  get  the  company  up  and  running  and  maintained.  We  assessed  the  most  important  activities  to  be:    

Creating  the  website   Finding  and  preserving  partners   Maintenance  of  the  website  and  concept   Marketing  

 Figure  10  is  an  early  estimation  of  how  we  see  our  key-­‐activities  prioritized.  The  top  pie-­‐chart  shows  how  we  see  the  importance  of  the  activity  and  the  bottom  pie-­‐chart  shows  how  costly  the  activity  is.  Both  are  in  comparison  to  the  other  key-­‐activities.      

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The  charts  show  the  difference  between  how  important  and  how  costly  a  key  activity  is  perceived  to  be  -­‐  e.g.:  finding  new  partners  is  very  important,  but  we  do  not  see  it  as  being  equally  costly  compared  to  the  other  key  activities.  We  also  find  marketing  important  but  it  is  more  dominant  in  how  costly  it  is.  It  is  also  notable  that  the  creation  of  the  website  has  a  low  percentage  even  though  it  is  not  possible  to  do  the  concept  without  the  site,  but  in  comparison  to  the  other  key  activities,  it  is  a  onetime  thing.      As  said  before  the  figure  is  only  an  early  estimation,  which  purpose  is  to  provide  our  thoughts  on  the  subjects  of  cost.  A  later  financial  plan  would  be  based  on  thorough  research.              

Figure  10:  Cost  &  importance  estimation  of  key  activity.  This  model  provides  an  early  estimation  of  how  important  and  expensive  the  key  activities  are.  

REVENUE  

 

represents  different  revenues  that  can  be  optimized  by  targeting  the  particular  segment.    

gets,  are  made  differently  with  our  production  partners  based  on  parameters  as  the  product  category,  cost  of  production  etc..    Our  revenue  model  is  based  on  commission-­‐based  sales  (Chaffey,  2009,  p.  80)  which  means  Virtual  Showroom  gets  a  commission  for  each  sale.    Another  way  of  looking  at  Virtual  Showrooms  revenue  

10,  p.32),  which  is  a  intimidation  service  on  behalf  of  two  or  more  parties.        To  support  our  income,  Virtual  Showroom  would  also  do  advertising  (e.g.  banners)  on  the  site.  In  regards  to  online  advertising,  having  a  collaboration  with  our  partners  would  be  preferable.          Another  revenue  the  business  could  pursue  would  be  funding  from  different  funds  and  institutions  that  work  with  supporting  the  creative  industry  e.g.  Kulturministeret  and  Center  for  Kultur-­‐  og  Oplevelsesøkonomi.  

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3.7   CHANNELS      Channels  describe  how  Virtual  Showroom  is  going  to  reach  its  customers  with  its  value  proposition  (Osterwalder  and  Pigneur,  2010,  p.27).    As  we  will  mention  later  under  marketing  mix  in  the  place  section  (see  section  5.4.3)  there  are  certain  channels  Virtual  Showroom  must  go  through  to  deliver  its  intent.  This  section  will  establish  the  different  channels  whereas  place  will  look  channels  form  a  marketing  point  of  view.        Virtual  Showroom  main  channel,  is  as  mentioned  before,  the  Virtual  Showroom  website.  This  is  the  hub  of  the  entire  concept  and  it  is  where  designers  upload  their  ideas  and  where  the  site-­‐visitors  decide  which  product  they  wish  to  see  put  into  production.  Another  internal  channel  will  be  the  employees  at  Virtual  Showroom,  who  will  make  sure  to  the  value  proposition  gets  delivered  thought  different  work  tasks  (e.g.  making  contact  to  production  partners).      However,  having  a  website  is  not  enough;  Virtual  Showroom  also  needs  to  attract  the  designers  and  viewers  to  our  site,  which  is  why  it  is  important  to  develop  a  marketing  plan  concerning  these  details  (see  section  5.4  -­‐  Tactics).  

showcase  of  winning  designs  -­‐   ith  potential  customers.  An  additional  external  channel  would  be  sale,  which  is  managed  by  Virtual  Showrooms  production  partners.      Our  distribution  channels  are  indirect,  since  Virtual  Showroom  is  an  intermediary  between  the  designer  and  the  production,  and  all  sales  goes  though  partners  channel  (Osterwalder  &  Pigneur,  2010,  p.  27).    We  are  aware  of  the  possibility  of  a  channel  conflict  between  the  production  /  sales  department  and  Virtual  Showroom.  Why  should  the  first  mentioned  go  through  Virtual  Showroom  in  finding  their  designers?  To  shortly  answer  this  is  because  Virtual  Showroom  can  provide  them  with  attention  (by  taking  part  in  the  concept),  an  audience  who  has  expressed  interest  in  a  specific  product  (by  voting)  and  legal  right  to  the  designs  put  into  production.  Another  conflict  could  arise  externally  between  production  and  sales.  If  a  production  company  does  not  have  a  sales  force  it  could  be  too  much  of  a  hassle  to  involving  themselves  in  Virtual  Showroom.  A  next  step  would  be  to  analyse  and  identify  the  potential  channel  conflict  that  lies  in  the  concept,  and  seek  out  to  a  solution  that  could  be  provided  to  stakeholders.        Look  deeper  into  the  main  channel,  the  website.    

 

3.8   IMPLEMENTATION  &  DESIGN      Looking  at  the  e-­‐concept  from  a  technical  aspect,  there  are  certain  things  that  need  to  be  done  to  implement  the  concept.  First  thing  to  do  is  make  a  strategy  for  the  implementation.  This  would  feature  a  flowchart  and  a  use-­‐case,  which  illustrates  and  describes  scenarios  of  how  the  user  is  going  to  interact  with  the  website.  Especially  when  the  website  includes  a  log-­‐in  system  and  user-­‐uploads  it  is  relevant  to  look  more  into  and  analyse  these  processes  in  order  to  make  the  navigation  as  user-­‐friendly  as  possible.  The  use-­‐case  would  also  create  an  overview  of  what  functions  on  the  website  that  are  necessary,  and  would  function  as  a  preparation  to  the  programming  phase.      As  earlier  mentioned  the  website  should  feature:    

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The  ability  to  create  a  profile  and  log-­‐in  (both  as  a  designer  and  a  visitor)   A  voting-­‐system   A  showcase  gallery  of  ideas  to  vote  +  winning  designs  with  external  links  to  our  partners  web  

shops   A  community   A  way  of  easily  uploading  design  ideas  that  without  much  redesign  can  be  presented  in  the  

showcase  gallery.    The  technology  for  this  is  not  ground-­‐breaking  but  it  can  quickly  be  a  costly  affair,  if  needing  to  hire  both  a  developer,  a  graphic/web  designer  and  a  usability  expert  .    

-­‐generated  content.    The  optimal  thing  would  be  to  do  a  demo  of  the  concept  before  launching  to  the  whole  market,  getting  as  much  real-­‐world  input  through  usability  test  in  an  early  stage,  to  be  able  to  fix  and  manage  problems  and  errors  before  launching  to  the  whole  market.              Mentioned  in  key  activities  under  cost  &  revenue,  developing  the  website  is  a  one-­‐time  thing,  and  more  comprehensive  and  prolonged  task  is  maintenance  of  the  site,  making  sure  the  concept  functions  works  and  that  Virtual  Showroom  develo    To  give  an  insight  into  our  thoughts  about  the  website,  we  created  an  early-­‐stage  mockup  (see  figure  2).      

3.9   SUMMARY  OF  BUSINESS  MODEL    

This  section  summarizes  the  main  points  of  the  Business  Model  chapter  above,  with  particular  focus  on  the  conclusions  that  is  brings  us  closer  to  answering  the  research  question.    

design  with  different  levels  of  design  skills,  who  are  interested  in  getting  their  design  ideas  

segments.  This  will  allow  for  targeted  marketing,  maintenance  of  customer  relations  among  others.      Furthermore  key  partnerships/stakeholders  has  been  identified  and  their  importance  for  the  company  analysed.  The  analysis  recommends  focus  on  existing  designers,  production  companies,  re-­‐visitors  and  employees  of  Virtual  Showroom.  The  analysis  also  points  to  a  potential  risk  in  high  interdependence  between  the  key  stakeholders.  The  stakeholder  analysis  is  followed  with  a  description  of  value  proposition  for  each  of  these  important  stakeholders.  Also  a  description  of  the  value  chain  that  outlined  a  set  of  activities  that  Virtual  Showroom  could  do  in  order  to  improve  value  creation  for  them.  The  most  important  activity  will  be  to  obtain  and  maintain  partner  relationships.      The  next  step  of  the  model  was  an  overview  of  some  of  the  financial  aspects  of  Virtual  Showroom.  A  main  point  of  this  was  to  prioritize  the  importance  and  cost  estimate  the  key  activities  that  start-­‐up  and  daily  operations  of  Virtual  Showroom  should  include.  In  reference  to  the  conclusion  of  the  value  chain  the  most  important  activity  will  be  to  find  and  preserve  partners.  The  most  costly  will  likely  be    

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commission  on  sold  ideas.  The  section  also  concluded  that  this  income  alone  likely  would  not  be  enough    

 Channels  that  Virtual  Showroom  should  use  to  communicate  with  the  different  stakeholders  has  been  identified,  the  most  prominent  of  these  is  the  website.  It  has  also  been  established  that  there  should  be  no  technological  hindrances  to  the  completion  of  the  business  concept.  

 

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4.  ANALYSIS  OF  THE  ENVIRONMENT    

Various  facts  in  the  internal  and  external  environment  will  affect  the  Virtual  Showroom.    It  is  therefore  important  to  make  a  situation-­‐analysis  to  understand  the  current  and  future  environment  in  which  the  company  operates  in,  with  the  aim  that  the  strategic  objectives  are  realistic  in  light  of  what  is  happening  on  the  marketplace  (Chaffey,  2009,  p.420).    Risk  linked  to  the  business,  should  be  identified  and  either  turned  into  possibilities  or  handled,  so  the  consequences  are  minimized.  At  the  same  time  possibilities  should  be  identified  and  exploited.  Therefore,  there  is  a  need  for  constant  monitoring  of  the  environment,  also  referred  as  environmental  scanning,  and  afterwards  managing  the  business  in  relation  to  this  (Chaffey,  2009,  p.52.).  This  ability  to  respond  to  these  environmental  opportunities  and  threats  is  commonly  referred  to  as  strategic  agility  (Chaffey,  2009,  p.57).      We  seek  to  analyse  the  environment  around  Virtual  Showroom,  with  the  use  of  a  traditional  SWOT-­‐analysis.  A  SWOT  analysis  is  a  relatively  simple,  yet  powerful  tool  that  we  use  to  analyse  Virtual  

environment  in  relation  to  opportunity  and  threats  (Chaffey,  2009,  p.274).    Before  compiling  the  SWOT-­‐analysis,  we  have  chosen  to  analyse  the  different  external  factors  of  the  SLEPT-­‐framework  (Chaffey,  2009,  p.  193).  The  SLEPT-­‐analysis  is  often  used  in  conjunction  with  a  SWOT  analysis  to  examine  the  situation  of  an  individual  business.  If  the  Virtual  Showroom  strategically  analyses  the  five  factors  in  SLEPT,  a  good  foundation  for  the  opportunities  and  threats  is  provided  for  the  SWOT  (ibid).      Competitors  in  one  of  the  factors  in  the  micro-­‐environment  and  is  therefore  a  important  issue  to  take  into  consideration  (ibid).  The  competitive  situation  and  tendency's  in  the  market,  that  Virtual  Showroom  is  captivating,  dictates  the  conditions  for  conquering  market  share  and  market  growth.  Based  on  this  we  have  conducted  a  market  and  competitor  analysis.  In  order  to  prepare  thoroughly  the  internal  factors  to  the  internal  part  in  SWOT,  a  organizational  analysis  is  compiled.  Simultaneous  the  SWOT  analysis  also  focuses  on  other  internal  weaknesses  and  strengths  in  the  internal  environment.    If  Virtual  Showroom  is  going  to  be  implemented,  it  would  be  beneficial  to  also  conduct  a  empirical  demand  analysis  (Chaffey,  2009,  p.421)  and  afterwards  re-­‐consider  the  marketing  mix.  This  analysis  is  conducted  as  a  foundation  for  the  marketing  mix  to  be  built  on.  In  addition  to  market  research  it  would  be  useful  to  consult  an  e-­‐consultancy  that  are  specialized  in  providing  reports  compiled  from  the  various  research  material  such  as  Internet  statistics  compendium.  Besides,  there  are  various  free  services  such  as  Alexa  and  paid  services  such  as  Hitwise,  Netrating,  Comscore,  ABCD  database,  Forrester  (Chaffey,  2009,  p.63).  

 

4.1   EXTERNAL  ENVIRONMENT    In  order  to  make  sure  that  the  business  model  is  built  on  a  solid  foundation,  it  is  important  to  consider  the  external  environment  before  planning  the  strategy.  Factors  in  the  external  environment  affect  the  Virtual  Showroom  and  should  therefore  be  carefully  considered.  For  instance  should  high  risks  should  be  handled  through  a  risk  management  analysis.  In  order  to  stay  competitive  and  defend  gained  market  

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shares,  it  is  important  for  Virtual  Showroom  to  continue  supervising  the  environment,  in  order  to  address  future  destructive  factors.  Besides  identifying  risk,  it  is  also  important  to  keep  an  eye  on  potential  opportunities  that  could  strengthen  the  business.  

 

4.1.1  SLEPT-­‐ANALYSIS  There  is  various  versions  of  the  marketing  environment  models,  such  as  PEEST,  STEP,  PESTEL,  STEEPLE  and  SLEPT  (Andersen  et.  al,  2007).  From  these  we  chose  a  SLEPT-­‐model,  since  it  fit  the  environmental  situation  of  Virtual  Showroom  the  most.    The  SLEPT-­‐frame  is  an  efficient  analysing  tool,  used  to  evaluate  the  impact  of  factors  in  the  macro  environment;  political,  economic,  social,  technological  and  legal  factors  (Chaffey,  2009,  p.  193).  Since  the  analysis  also  reveals  some  opportunities  within  the  frames,  these  opportunities  will  be  applied  in  the  SWOT-­‐analysis  later.  When  an  overview  of  the  position  of  the  e-­‐business  is  provided,  it  is  easier  to  evaluate  which  directions  that  might  be  more  profitable  than  others.      The  table  below  is  listing  the  most  relevant  factors,  that  could  have  an  significant  impact  on  Virtual  Showroom.    

   

Figure  11:  SLEPT  model.  This  table  illustrates  influential  macro-­‐factors  in  the  external  environment.      A  threat-­‐  and  opportunity  matrix  could  be  used  to  evaluate  whether  these  factors  are  critical  and  

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probable  (Andersen  et.  al,  2007,  p.  101).  If  this  project  had  allocated  more  resources,  we  would  have  made  use  of  this  model.  Instead  we  will  discuss  the  most  important  factors  in  the  section  below.  

 

   Figure  12:  Threat  matrix.  This  table  is  an  example  of  how  probable  and  important  some  SLEPT-­‐factors  are.    Social  factors  Given  that  our  business  model  is  based  on  a  trustful  relationship  between  our  designers  and  production  companies,  it  has  high  priority  that  Virtual  Showroom  addresses  social  risks  that  may  damage  our  relationships  with  them.  The  most  important  issues  to  address  is  that  both  designers  and  manufactures  do  not  trust  us  with  their  ideas  or  do  not  see  the  value  proposition  or  fears  the  unknown.  Others  factors  would  be  fear  of  the  unknown,  cultural  issues  in  communication  and  that  the  customers  do  not  perceive  our  value  proposition  as  relevant  benefits.    Legal  factors  Legislation  is  one  of  the  critical  factors,  which  could  have  a  substantial  impact  on  Virtual  Showroom.  It  should  therefore  be  taken  very  seriously.  The  most  significant  legal  issues  that  should  be  taking  into  considerations,  is  uploaded  designs.  When  designers  upload  their  design,  legal  protection  of  digital  assets  such  as  

proval-­‐step  in  the  uploading  process  should  take  care  of  the  disability  and  discrimination  law,  so  no  provocative  content  will  be  published  on  our  website.  In  reference  to  the  following  section  on  marketing  mix,  online  advertising  law  is  also  taken  into  consideration.  Finally  when  designers  register  their  personal  information,  we  need  to  handle  their  information  according  to  the  data  protection  and  privacy  law.        Economic  factors  As  there  is  an  on-­‐going  recession,  production  companies  have  less  capital  to  invest  in  new  designs,  which  is  a  significant  challenge  since  our  cost  revenue  model  relies  on  this.  Financial  organisations  have  since  the  financial  crisis  been  more  cautious  when  approving  loans  to  design  entrepreneurs,  and  in  combination  designers  with  no  capital  who  wants  their  designs  produced,  the  finance  crisis  actually  open  up  a  possibility  for  Virtual  Showroom  to  succeed.      Political  factors  

existence.  International  trade  restrictions  and  increased  taxes  will  reduce  the  profit,  but  it  is  less  likely  that  new  rules  will  become  effective.  Since  political  decisions  often  are  resolved  over  a  longer  period  of  time,  Virtual  Showroom  will  have  time  to  respond  to  political  factors.      

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Technological  factors  In  relation  to  technological  issues  we  do  not  regard  it  as  a  substantial  issue.  Users  of  the  website  should  of  course  have  access  to  computer  and  Internet,  but  since  this  is  not  an  issue  in  Denmark,  it  is  not  factor  that  needs  to  be  addressed.  There  is  of  course  a  variety  of  interface  opportunities,  e.g.  being  aware  of  usability  is  important.    The  most  influential  risks  will  be  taking  into  consideration  in  the  discussion  of  the  SWOT  model.  

 

4.1.2  MARKET  RESEARCH  AND  COMPETITOR  ANALYSIS  The  following  section  focuses  on  researching  market  trends  and  existing  companies  within  Virtual  

-­‐business,  with  the  purpose  of  identifying  potential  competitors.  Virtual  Showroom  is  a  newly  established  company  in  a  relatively  new  area  of  business,  which  deals  with  sharing  and  selling  ideas  and  product  designs  online.  Market  trends  are  interesting  in  order  to  learn  from  existing  companies.  Furthermore,  it  is  important  to  gain  this  knowledge  about  the  market  and  to  know  our  competitors  in  order  to  end  up  with  the  right  differentiation  strategy.          The  process  of  market  research  and  identifying  our  potential  competitors  started  with  a  review  of  existing  and  similar  online  services.  In  order  to  fit  into  the  same  business  category  as  Virtual  Showroom,  the  companies  should  provide  a  platform  that  makes  it  possible  to  sell  ideas  or  designs  online  and  that  make  it  possible  for  the  designers  to  get  their  ideas  produced.    REVIEW  OF  COMPETITORS  An  e-­‐business  that  shows  many  similarities  to  Virtual  Showroom  is  Quirky.com.  The  users  of  Quirky  can  upload  their  own  industrial  designs  (technology-­‐,  kitchen-­‐,  kids-­‐  and  pets-­‐stuff),  and  at  the  same  time  vote  for  the  best  designs  of  the  week.  The  ideas  with  most  votes  will  be  put  into  production  and  end  up  

   It  is  challenging,  risky  and  expensive  to  put  an  idea  into  production  by  the  individual  designers.  Quirky.com  is  attractive  to  designers,  because  they  have  manufacturing  relationships,  and  all  the  

and  they  earn  money  every  time  their  product  sells  on  the  website.    Even  though  Virtual  Showroom  does  not  directly  sell  physical  products,  the  prize  competition  is  worth  considering.  Quirky,  who  is  our  closest  competition,  is  not  a  free  platform.  They  differ  from  Virtual  Showroom  by  charging  10  dollars  from  the  designers  who  submit  a  design.  Virtual  Showroom  only  charges  a  fee  if  a  designer  succeeds  in  selling  the  design-­‐idea,  which  becomes  an  advantage  for  the  

   Similar  to  Quirky.com  is  Redesignme.com.  They  call  their  website  a  creative  marketplace  within  the  area  of  graphic  design,  marketing  ideas  and  product  design.  Contrary  to  Quirky,  Redesignme.com  do  not  take  on  the  role  of  producing  anything.  Instead  they  cooperate  with  many  clients  and  create  a  business  of  being  the  intermediary  between  these  clients  and  designers,  and  earn  money  by  charging  fees.  The  idea  of  being  the  intermediary  between  designers  and  producers  is  similar  to  the  idea  of  Virtual  Showroom.  But  it  is  a  very  different  product  and  design  category  that  Redesignme.com  deals  with,  and  therefore  Redesignme.com  is  not  direct  competitors.    Another  aspect  on  Redesignme.com,  which  is  considered  a  strength  is  that  the  clients  create  

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challenges,  and  the  company  then  chooses  and  rewards  the  best  design  with  points  or  cash.  The  idea  of  challenges  works  well,  because  the  designer  actually  answers  a  real  assignment.  This  is  a  strength  compared  to  Virtual  Showroom  where  users  submit  ideas,  which  they  do  not  really  know  if  any  company  is  interested  in.  A  challenge  functions  as  a  great  motivational  factor.  Redesignme.com  differs  from  the  rest  of  the  websites  by  not  giving  their  users  a  voice.  Only  the  clients  decide  the  best  designs,  there  is  no  possibility  of  voting,  which  give  the  customers  no  influence,  and  could  be  a  weakness.      The  business  Threadless.com  is  simple  and  more  niche  than  the  two  previous  businesses.  It  is  the  same  principle  as  Quirkly.com  by  being  a  community-­‐based  site  where  the  users  are  able  to  upload  and  vote  for  t-­‐shirt  designs  that  Threadless  puts  into  production  and  sells  on  the  website.  Again  it  is  a  strength  that  Threadless  have  their  own  production  and  web  shop.  It  is  also  noticeable  that  the  users  have  very  high  influence.  They  play  a  central  role  throughout  the  whole  process  from  design  to  production.  The  users  are  responsible  for  designs  and  for  deciding  the  best  designs.  They  have  a  lot  of  power,  because  without  the  users  there  would  be  no  business.  Threadless.com  rewards  the  winning  designers,  and  makes  money  on  selling  the  t-­‐shirts.      Another  kind  of  community  based  idea  sharing  and  -­‐selling  business  is  Kickstarter.com.  This  platform  is  intended  for  communicating  ideas  for  creative  projects  within  many  different  categories.  

A  way  for  creative  people  to  fund  their  ideas  and  projects.  And  This  concept  is  very  different  from  Virtual  Showroom,  but  it  

is  interesting  to  look  at  the  power  of  the  users  and  the  community  part  of  this  website,  which  is  a  strong  aspect  of  the  concept.  A  project  creator  starts  a  funding  (uploads  an  idea  for  a  private  project),  and  decides  how  much  money  that  are  needed  to  complete  the  project.  The  community  needs  to  support  project  and  place  money.  Only  if  a  project  has  met  its  funding  goal,  the  creator  receives  the  fund.  What  

-­‐or-­‐no  money  changes  hands,  which  can  be  compared  to  the  idea  of  Virtual  Showroom;  if  the  design  is  not  popular  within  the  community,  it  is  not  put  into  production.  This  also  means  that  risks  that  are  normally  placed  by  both  creators  and  donors/producers  are  minimized.  The  producers  get  a  design  that  are  popular  and  has  potential.      The  project  creators  produce  all  projects  themselves  and  keep  100%  ownership  and  control  over  their  work,  which  is  different  from  the  previous  sites  and  could  be  attractive  to  the  users.  Another  strength  is  that  it  is  free  to  upload  a  project  on  the  site,  and  Kickstarter.com  earns  money  by  charging  fees  but  only  if  a  project  is  successfully  funded.    The  concept  of  web-­‐users  posting  their  own  ideas  online  is  also  being  exploited  by  large  international  companies  who  are  embracing  this  idea  and  are  implementing  it  as  sub-­‐websites  on  their  own  company  website.  Two  examples  are  Dell  and  Starbucks,  where  the  users  of  their  online  community  are  able  to  upload  ideas  for  new  products  and  services  and  get  to  vote  on  which  ideas  to  be  realized.    

ideastorm.com    ideas  with  the  best  ratings  (Dell,  2010).  Dell  describes  the  concept  as  a  way  to  talk  directly  to  their  

customers.  The  same  tendency  is  shown  at  Starbucks  mystarbucksidea.com  with  the  sloga Your  Ideas.  (Starbucks  Cooperation,  2010).    

 The  two  examples  show  that  there  is  much  focus  on  user  influence  through  voting  systems.  Though,  neither  Dell  nor  Starbucks  will  assure  that  the  ideas  with  most  votes  will  be  implemented.  The  winning  idea  is  chosen  by  a  combination  of  decision  makers  within  the  companies  and  the  most  popular  idea.  Neither  will  the  users  be  compensated  or  rewarded  if  their  ideas  are  chosen.  Despite  that  there  are  no  

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guarantees  or  rewards  many  users  upload  their  ideas  and  comment  on  each  other,  which  prove  the  strength  of  online  communities.    OTHER  COMPETITION  Lastly,  it  is  also  necessary  to  be  aware  of  competition  from  distributors  and  producing  companies.  The  designers  and  users  of  Virtual  Showroom  have  the  opportunity  to  negotiate  directly  with  these  companies  without  the  help  from  Virtual  Showroom.  Some  of  the  designers  will  also  be  able  to  pay  for  their  production  of  their  ideas  themselves;  these  will  not  make  use  of  a  place  like  Virtual  Showroom.  Consequently,  in  order  to  make  Virtual  Showroom  attractive  to  designers,  they  need  to  establish  good  arrangements  with  clients  who  want  to  invest  in  designs  from  the  users.    ANALYSIS  None  of  the  reviewed  businesses  are  direct  competitors  to  Virtual  Showroom,  but  they  are  all  in  the  same  category  of  business.  They  are  all  platforms  that  enable  the  users  to  show  and  sell  ideas  and  designs  online.  This  indicates  to  us,  that  there  is  a  market,  and  that  Virtual  Showroom  could  potentially  succeed.  A  difference  between  Virtual  Showroom  and  most  of  the  reviewed  business  though,  is  that  most  of  the  businesses  are  taking  on  the  role  of  manufacturing  the  submitted  designs  themselves,  and  are  also  selling  the  products  on  their  website.  This  is  a  huge  strength  because  the  competitors  can  assure  the  users  that  their  designs  will  get  into  production.  Virtual  Showroom  on  the  contrary  is  dependent  on  partners  and  clients.  Like  Redesignme.com,  Virtual  Showroom  is  primary  functioning  as  an  intermediary  between  designers  and  producers.  As  the  name  indicates,  it  is  simply  a  showroom,  which  is  a  strength  since  it  helps  the  designers  get  business  connections  that  could  continue.    Businesses  that  contain  a  web  shop  have  the  advantage  that  they  can  prove  to  new  designers  that  many  users  actually  succeed  with  their  designs  on  the  website.  The  shop  thereby  becomes  a  great  motivational  factor.  Virtual  Showroom  on  the  other  hand  does  not  contain  a  concrete  web  shop  since  they  do  not  own  or  sell  the  products.  However,  all  products  that  have  been  bought  and  produced  by  the  partners  can  be  viewed  on  a  sub-­‐website  with  a  link  where  to  buy  it,  which  is  both  a  motivational  factor  for  the  designers,  and  it  creates  value  for  the  clients  who  get  their  website-­‐link  as  publicity  on  Virtual  Showroom.  A  common  characteristic  of  the  competitors,  is  that  they  are  all  community  based,  and  they  focus  a  lot  on  user  influence  and  co-­‐determination.  A  commonly  recurring  and  highly  motivational  factor  in  all  the  businesses  is  the  voting  system,  which  gives  users  of  the  community  a  voice,  and  makes  them  feel  like  a  part  of  the  production  process.  This  kind  of  involvement  will  at  best  create  more  buyers  in  the  end.  To  Virtual  Showroom,  user  involvement  is  important  even  though  the  products  are  not  for  sale  on  the  website.    Generally,  the  community  part  of  the  reviewed  websites  seems  to  play  a  large  role,  and  becomes  a  value  to  the  users.  The  communication  between  user  and  user,  typically  in  a  forum,  makes  it  possible  to  discuss  and  share  thoughts  and  experiences  and  get  competent  feedback  on  ideas.  This  forum  creates  value  to  the  designer  even  if  they  succeed  in  selling  their  ideas  or  not,  and  is  a  feature  that  Virtual  Showroom  should  embrace.    Another  noticeable  feature  on  most  websites  is  the  Blog,  which  enables  direct  communication  between  the  company  and  its  users.  Through  the  blog  posts  the  companies  shows  that  they  are  present.  This  creates  the  feeling  of  personal  contact,  which  builds  trust.  As  mentioned  in  the  SLEPT,  trust  is  important  because  the  designers  leave  their  ideas  in  the  hands  of  people  they  do  not  know.  It  is  important  to  Virtual  Showroom  that  they  succeed  in  appearing  loyal  and  trustworthy.  This  could  be  by  communicating  through  a  blog.  

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 Virtual  Showroom  has  chosen  one  kind  of  economic  business  model,  but  the  competitor  analysis  shows  that  there  are  various  possibilities  of  revenue  stream  models.  Virtual  Showroom  contains  many  of  the  aspects  which  we  have  identified  from  competitors  and  existing  concepts.  This  indicates  that  Virtual  Showroom  as  a  new  concept  on  the  online  market  is  competitive.  The  threats  from  existing  businesses  at  the  moment  do  not  seem  significantly  large,  since  no  one  offers  exactly  the  same  product.  Virtual  Showroom  is  clearly  a  niche,  which  can  be  our  advantage,  provided  that  we  are  able  to  gain  enough  users  and  collaborating  clients.  The  Danish  market  is  a  small  market,  but  it  makes  us  present  and  it  also  means  that  the  designers  do  not  need  to  compete  internationally.  Thereby  we  can  exploit  this  challenge.    We  have  only  identified  one  direct  competitor,  Quirky.com,  which  is  the  only  business  that  operates  within  the  same  product  area  as  Virtual  Showroom.  Quirky  is  the  only  competitor  that  offers  close  to  the  exact  service  and  can  be  a  substitute  for  Virtual  Showroom.  Of  this  reason  we  do  not  find  it  relevant  in  this  context  to  perform  any  benchmarking  of  the  competition.    

4.2   INTERNAL  ENVIRONMENT    

After  discussing  the  external  environment,  the  internal  environment  is  analyzed  below.    The  choice  of  the  organizational  structure  affects  the  Virtual  Showrooms  internal  environment  and  will  therefore  be  a  vital  part  of  the  analysis  of  the  internal  environment.    Since  the  structure  of  business  influences  the  working  process,  it  is  essential  to  a  business  how  the  organization  is  composed.  We  worked  out  an  analysis  of  how  we  imagined  that  the  organization  would  be  composed.  This  was  conducted  in  order  to  enlighten  which  organizational  possibilities  and  disadvantages  Virtual  Showroom  would  possess.      In  order  to  identify  internal  strengths  and  weaknesses  that  are  not  already  discussed  in  the  business  model,  SLEPT-­‐analysis,  market  research,  competitor  analysis  and  the  organizational  structure,  a  SWOT  analysis  is  put  into  use  in  order  to  enlighten  these  aspects.  In  addition,  the  external  opportunities  and  treats  are  also  discussed  in  the  SWOT.  As  mentioned  before  SWOT  is  also  used  as  a  model  that  reflects  a  compiled  overview  of  important  environmental  factors,  which  the  Marketing  strategy  is  based  on.    4.2.1    

 

ORGANIZATION  STRUCTURE  ANALYSIS  

The  organization  structure  reflects  the  internal  environment  within  a  company,  and  its  working  division.  

Henry  Mintzberg  (1980),  who  suggests  a  typology  of  five  basic  coordinating  mechanisms/five  types  of  decentralization;  simple  structure,  machine  bureaucracy,  divisionalized  form  and  the  adhocracy.  (Mintzberg,  1980,  p.  322)  

   

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Figure  13:  Organizational  structure.  Osimple  structure,  us/intermediaries  at  VS  as  adhocracy,  and  the  production  department  as  machine  bureaucracy.    Shortly,  to  enumerate  the  basic  parts  of  the  organization,  there  is  the  operating  core,  which  counts  all  the  different  parts  of  the  processes  from  design,  validating  to  production.  Though  one  cannot  get  their  products  produced  without  making  it  through  the  keyhole  on  the  online  platform.  The  actual  operating  core  is  within  the  area  of  designers  and  producers.  The  strategic  apex  consists  of  the  general  managers  and  the  personal  staff  -­‐  this  will  only  count  our  own  team  as  the  intermediaries.  Further  one  can  talk  about  the  middle  line,  those  who  are  in-­‐between  the  strategic  apex  and  the  operating  core.  But  because  of  the  small  size  of  this  organization  (e.g.  five  persons)  there  will  be  nobody  assumed  as  middle  line,  because  these  decisions  often  will  be  considered  among  the  strategic  apex.  Considering  the  technostructure,  this  often  consists  of  analysts,  who  apply  analytic  techniques  to  the  design  and  to  the  maintenance  of  the  structure  and  the  environment.  But  this  part  will  also  be  found  among  both  the  operating  core  and  the  strategic  apex,  since  Virtual  Showroom  will  be  divisionalized  into  

     The  overall  process  that  takes  place  seems  to  be  a  divisionalized  form,  which  has  to  coordinate  the  working  processes  for  respectively  individual  designers,  Virtual  Showroom  and  the  production  team.  But  in  each  step  where  a  coordinating  process  is  taking  place,  there  will  be  a  dominating  organizational  structure.  In  our  case,  the  majority  of  the  structures  will  even  be  a  mixture  of  some  of  the  other  methods,  in  order  to  create  a  harmony  within  its  environment.      The  overall  working  process,  the  divisionalized  form,  is  known  for  its  limited  vertical  decentralization,  which  means  that  the  power  therefore  flows  outside  the  line  of  authority  and  the  power  instead  is  delegated  in  parallel  to  managers  of  divisions.  This  kind  of  structure  is  very  market-­‐based  with  a  central  headquarters  overseeing  a  set  of  divisions  with  serving  more  or  less  each  their  own  markets.  Hence,  it  is  a  challenge  to  find  a  mechanism  to  coordinate  work  across  our  three  specific  departments.  The  divisionalised  structure  is  often  found  as  fashionable  among  industries.  (Mintzberg,  1980,  p.  327+335)      Virtual  Showroom  Further  we  would  describe  the  Virtual  Showroom  as  an  individual  organization.  Employees  at  Virtuel  

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Showroom  will  consider  themselves  as  an  adhocracy  organization.  This  is  known  by  little  formalization  of  behavior,  and  least  of  the  classical  principles  of  management.  There  is  obviously  a  blurring  line  between  staff  and  management.  The  environment  can  both  seem  complex  and  dynamic.  Further  the  employees  at  Virtual  Showroom  would  be  a  part  of  an  administrative  adhocracy,  when  the  innovation  is  

rt,  but  finally  examined  by  Virtual  Showroom.  In  general  adhocracy  is  popular  within  its  field.  (Mintzberg,  1980,  p.  336-­‐337)      The  users  of  Virtual  Showroom  Among  the  designers  there  will  be  no  such  structure  to  find,  therefore  a  very  simple  structure  is  used.  

power  is  centralized,  after  which  the  designers  never  will  make  the  rules  themselves.  This  is  an  organic  structure  and  dynamic  environment,  which  seems  not  to  be  predicted  after  which,  the  management  of  Virtual  Showroom  cannot  predict  their  work  tasks  on  forehand.  (Mintzberg,  1980,  p.  331)      Production  -­‐  firms  that  agree  with  cooperation  This  part  of  the  organization  is  known  as  machine  bureaucracy  as  structure.  This  is  typical  for  the  production  part  of  a  firm.  In  our  situation  a  larger  organization  outside  Virtual  Showroom  will  probably  cooperate  for  a  certain  period  of  time,  and  will  mainly  be  responsible  of  producing  the  products  that  our  designers/customers  have  invented.  The  machine  bureaucracy  is  highly  specialized  and  depends  on  routines  and  standardization  for  the  operation  to  some  extent.  Power  of  decision  making  is  often  centralized  and  placed  externally  from  the  actual  production.  Further  this  kind  of  coordination  is  known  within  mass-­‐production  firms,  that  contains  simple  and  stable  environments.  In  the  concrete  situation  of  Virtual  Showroom,  we  imagine  there  will  be  certain  uncertainties  regarding  to  working  tasks,  compared  to  a  normal  mass  production.  (Mintzberg,  1980,  p.  332-­‐333)    In  general  we  cannot  look  upon  the  whole  organization  within  its  suppliers  and  define  an  exact  organization  structure;  therefore  the  above  section  is  a  guess  of  how  it  could  be.  It  applies  most  modern  companies  today  to  use  a  combination  of  several  organizational  structures.      SUMMARY  OF  INVIRONMENT  Additionally,  Virtual  Showrooms  is  strongly  affected  by  its  internal  strengths  and  weaknesses  according  

has  a  Unique  Selling  Point  (Andersen,  2007,  p.  374-­‐375)  in  that  way  that  it  is  a  good  stepping  stone  for  new  designers  within  the  industry  of  industrial  design.  When  we  are  only  engaged  by  this  area,  we  are  able  to  contribute  with  high  competencies  and  guidance  especially  for  this  type  of  design.  Furthermore  we  cooperate,  as  written  above,  with  strong  external  business  partners  who  take  care  of  the  production  part.      For  obvious  reasons  it  is  a  weakness  that  Virtual  Showroom  is  very  dependent  of  a  huge  group  of  designers  to  come  up  with  ideas,  and  further  it  needs  a  huge  group  of  users  to  rank  the  ideas.  It  is  also  a  weakness  that  designers  have  to  trust  Virtual  Showroom.  Technology  and  usability  of  the  production  depends  of  the  external  production  companies,  which  makes  Virtual  Showroom  very  dependent  on  the  quality  of  their  work,  because  their  job  reflects  back  at  our  popularity  in  the  end.  

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4.3   SWOT  ANALYSIS      The  investigation  of  external  and  internal  factors  of  Virtual  Showroom  constitutes  a  good  foundation  for  making  a  SWOT  analysis.  This  strong  strategic  planning  tool  is  used  with  two  goals  in  mind:  it  is  of  great  value  when  used  to  analyse  the  current  situation  and  as  a  tool  to  formulate  strategies  (Chaffey,  2009,  

as  a  base  for  strategic  decisions  when  planning  the  marketing  strategy  in  the  next  part  of  the  report.  In  extension,  external  opportunities  and  threats  are  identified.    The  in  previous  SLEPT-­‐analysis,  we  mentioned  macro-­‐factors  that  might  have  an  influence  on  Virtual  Showroom.  In  order  to  get  a  overview  of  the  most  influential  factors,  it  is  only  the  most  critical  factors  that  are  mentioned  in  the  SWOT-­‐model.      Influential  factors,  which  either  can  be  optimized  or  exploited,  will  be  analysed  in  the  Situation  Analysis  in  the  SOSTAC-­‐model  (See  section  5.1.).      

 

   

Figure  14:  The  SWOT  analysis.  This  model  illustrates  the  internal  strengths  and  weaknesses,  and  the  external  opportunities  and  threats.        STRENGTHS  Cooperating  with  producers  and  displaying  produced  produc -­‐shop,  

exposition  of  winning-­‐  and  produced  designs  and  customer  base  e.g.  that  1200  customers  want  a  particular  product  will  enforce  credibility.  However,  this  could  also  be  a  weakness  if  Virtual  Showroom  does  not  succeed  in  attracting  both  customers  and  investors.        

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As  mentioned  in  the  competition  and  market  analysis  (see  section  4.1.2.)  it  is  an  internal  strength  that  Virtual  Showroom  differentiates  itself  from  competitors  by  involving  viewers  in  the  design  process  (they  choose  what  should  be  produced),  having  a  communication  forum  and  is  a  free  service.  Virtual  Showroom  consists  of  an  organization  which  besides  generating  profit,  is  a  value-­‐driven  company,  which  most  likely  will  strengthen  the  brand  and  good  will  of  investors  and  business  partners.      WEAKNESSES  As  mentioned  in  the  business  model  (Section  3.6),  the  revenue  stream  in  Virtual  Showroom  is  built  on  convincing  production  companies  to  manufacture  the  highest  rated  products.  Therefore,  the  business  depends  strongly  on  investors,  since  Virtual  Showroom  otherwise  would  have  to  pay  for  getting  the  

y  the  fact  that  the  value  proposition  to  production  companies  is  not  very  strong  and  should  be  strengthened.  The  challenge  for  

desires.  The  product  is  based  on  an  actual  problem  but  uses  the  thesis  that  the  designer  knows  what  

 a  designer  to  design  a  particular  product  that  fits  into  the  remaining  product  selection.      If  Virtual  Showroom  is  not  able  to  make  an  agreement  with  any  production  companies,  plan  B  could  be  to  invest  ourselves,  which  will  bring  Virtual  Showroom  in  a  financial  very  risky  position.  Since  production  and  sales  is  outsourced  there  will  be  less  financial  capital  on  stake.  On  the  contrary  this  involves  less  control  in  these  parts  of  the  external  value  chain.  Therefore  Virtual  Showroom  cannot  guarantee  that  the  ideas  are  actually  put  into  production,  when  the  production  companies  buy  an  idea  and  the  right  for  it.    As  mentioned  in  the  cost  &  revenue  stream  (see  section  3.6),  it  is  likely  that  the  revenue  stream  is  week  in  the  first  stages.      OPPORTUNITIES  In  the  modern  society  being  entrepreneur  has  a  special  high  social  status,  which  it  is  very  likely  that  the  customer  segment  would  like  to  be  associated  with.  We  believe  that  getting  success  in  the  design  industry  do  not  only  rely  on  good  design  competences  and  luck3.  Knowing  the  right  kind  of  people  is  almost  just  as  important.  In  our  communications  forum  both  production  companies  and  designers  have  the  opportunity  to  network.  With  this  lies  a  variety  of  opportunities  for  connecting  designers  with  their  desired  network.    As  mentioned  in  SLEPT-­‐analysis  the  recession  influences  e-­‐business,  but  also  our  customer  segment.  It  is  only  a  limited  amount  of  banks  that  will  lend  broke  designers  money,  on  merely  a  paper  sketch,  and  without  capital,  designers  would  not  go  very  far.  This  opens  up  an  opportunity  for  Virtual  Showroom  since  it  means  the  increased  criteria  to  get  a  loan  and  makes  the  offer  on  getting  a  product  produced  more  attracting  (if  the  win  the  competition).    Center  for  kultur  og  oplevelse  økonomi  4  have  a  financial  pool  from  which  they  give  subvention  to  new  and  innovative  entrepreneur.  For  instance  a  3D  household  showroom  has  just  received  a  large  financial  subvention  in  20115.  Virtual  Showroom  should  obviously  apply  since  there  are  good  changes  that  they  

                                                                                                                     3  http://www.lederne.dk/KommendeLedere/Talogtendenser/boeger/netvaerkdigtilsucces.htm  4  English:  Center  for  experience  economy  5  http://www.cko.dk/gruppe/robinhus-­‐design-­‐experience    

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might  get  a  subvention.    As  mentioned  in  the  stakeholder  analysis  it  would  be  beneficial  to  recruit  users  as  super  users  and  ambassadors  for  Virtual  Showroom.    Additionally,  It  is  not  always  enough  for  the  designers  to  have  good  design.  Often  it  is  necessary  takes  a  broad  network  and  knowing  the  right  people.  It  could  both  be  good  connections  to  investors,  manufactures  or  journalists.  This  need  for  network  could  be  exploited  by  promoting  the  opportunity  for  connecting  with  the  industry.      THREATS  As  mention  in  the  competitor-­‐  which  has  a  similar  value  proposition  as  ours.  It  is  unavoidable  that  we  will  lose  some  market  shares  to  this  operator.  Additionally  given  low  entry  barrier,  market  growth  and  technological  possibilities  that  make  it  easy  for  new  e-­‐businesses  evolve  quickly,  entail  that  it  is  very  likely  that  a  new  un-­‐identified  competition,  will  appear  in  the  future.  Since  our  revenue  stream  is  built  on  interest  from  investors,  it  would  be  crucial  if  no  producers  perceive  Virtual  Showroom  as  a  potential  profit-­‐generator.  In  relation  to  this,  given  culture  differences  and  different  agendas,  it  is  possible  that  Virtual  Showroom  will  conflict  with  its  supplier.  Worst  case  would  be  if  the  producers  withdraw  their  offer.    In  the  segmentation  (See  section  3.2.1)  we  selected  Denmark  as  the  primary  target  country.  Since  Denmark  is  small  country  and  Virtual  Showroom  is  targeting  a  niche  customer  segment,  it  is  possible  that  there  is  not  enough  of  Danish  designers  who  would  like  to  bring  their  design  intro  production.  As  analysed  in  the  SLEPT-­‐analysis  there  are  various  social  and  technological  factors  that  might  reduce  the  customer  interest  for  contribute  with  designs  at  Virtual  Showroom.  It  will  have  fatal  consequences  if  Virtual  Showroom  is  not  able  to  attract  a  large  customer  base,  in  spite  of  a  well  prepared  and  executed  use  of  the  marketing  mix  (See  section  5.4.3).  Without  a  large  and  active  customer  base,  there  is  no  designs,  no  rating  (and  thereby  interest  for  the  potential  produced  goods)  and  in  the  end  there  is  no  enticement  for  production  companies  to  produce  goods.      SUMMARY  OF  SWOT  Even  though  Virtual  Showroom  is  similar  to  Quirky  (e.g.  proven  consumers  interest  and  profit),  Virtual  Showroom  has  various  internal  strengths  which  reinforces  the  customer  value  proposition.  Being  the  value-­‐driven  e-­‐business  with  user  involvement  and  possibility  for  networking,  Virtual  Showroom  have  a  better  good  will  towards  customers  and  investors,  which  could  be  exploited.  It  is  though  crucial  that  

any  control  of  sold  designs  in  the  production  and  sales.  When  counterbalance  the  threats  towards  the  opportunities,  there  is  certainly  more  opportunities  than  threats.  Competition  and  conflicts  can  all  be  solved  through  damage  control  risk  management  and  the  right  marketing  strategy,  which  will  be  handled  in  the  following  SOSTAC.  Virtual  Showroom  should  without  a  doubt,  exploiting  the  benefit  of  having  user  ambassadors,  apply  for  a  CKO-­‐subvention  and  exploit  possibilities  for  branding  users  as  creative  entrepreneurs,  since  it  has  a  high  social  status.      Before  Virtual  Showroom  is  implemented,  all  mentioned  risks  should  be  further  handled  in  a  detailed  risk  management  analysis  build  on  research  data.  Otherwise  the  outcome  might  be  fatal  to  the  concept  if  not  handled  properly  (Von  Stamm,  2008,  p.  388).    

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5.  MARKETING  STRATEGY  It  will  be  in  the  interest  of  Virtual  Showroom  to  ensure  that  future  decisions  and  actions  regarding  the  organization  and  its  marketing,  are  planned  carefully  in  order  to  optimise  the  success  rate.  Spending  time  and  resources  on  planning  the  marketing  strategy  will  benefit  in  the  long  run,  since  it  tends  to  reduce  frequency  of  risks  and  mistakes.  Thereby  possible  and  unpredictable  costs  and  time  waste  are  

revise  the  specific  business  objectives,  and  then  it  is  possibility  to  plan  how  to  get  there,  and  what  to  do  to  achieve  these  goals.    SOSTAC    

marketing  planning  system  that  systematically  goes  through  the  most  relevant  elements  of  a  business.  According  to  Chaffey,  the  model  contains  the  six  main  issues  to  consider  within  a  digital  marketing  strategy  shown  in  figure  15.  In  the  following  section,  our  marketing  plan  will  be  defined  by  going  through  the  six  stages  of  the  SOSTAC  model.    Many  of  the  issues  to  consider  in  the  following  have  already  been  addressed  in  the  previous  sections  of  the  report.  The  findings  from  these  previous  analyses  are  used  as  a  foundation  for  much  of  the  decision  making  and  will  be  implemented  in  the  SOSTAC  model  and  the  marketing  plan.  Furthermore,  new  methods  are  introduced  during  the  next  chapter.    

 

   

Figure  15:  The  SOSTAC  model  This  model  is  a  marketing  planning  system  that  systematically  goes  through  the  most  relevant  elements  to  consider  when  planning  a  marketing  strategy.  

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5.1   SITUATION  ANALYSIS    We  have  already  done  research  on  the  current  situation  of  Virtual  Showroom,  when  analysing  both  external  and  internal  factors  of  the  Virtual  showroom.  Therefore  this  section  will  focus  on  the  most  importance  results  from  the  previously  sections  that  involved  situation  analysis  and  analyse  how  to  handle  these.      TOWS  MATRIX  Both  Chaffey  (2009,  p.  422)  and  Andersen  et.  al  (2007,  p.102),  suggest  that  it  will  be  a  beneficial  for  organizations  to  extend  the  SWOT-­‐analysis  with  a  TOWS-­‐matrix.  The  difference  between  SWOT  and  TOWS  is  that  when  SWOT  focus  on  identifying  strengths/weakness  and  threats/opportunities,  TOWS  has  the  purpose  to  force  the  organisation  to  generate  marketing  initiative  based  on  the  SWOT  (Andersen  et.  al.,  2007,  p.102).  The  elements  in  the  TOWS  is  similar  to  the  SWOT,  but  is  instead  constructed  as  a  matrix.  The  content  of  the  TOWS-­‐analysis  consist  of  4  squares:    

SO  strategies  is  defined  as  an  attacking  strategy.     ST  strategies  is  defined  as  a  defensive  strategy.     WO  strategies  is  defined  as  a  build  strength  to  attack  strategy.     WT  strategies  is  defined  as  a  build  strength  for  defensive  strategy.    

 Which  strategy  a  business  focus  on  depends  on  which  situation  that  they  are  in.  Given  that  Virtual  Showroom  is  un-­‐implemented  business,  this  TOWS-­‐  analysis  can  be  used  to  found  the  business  model  and  marketing  mix  since  there  is  still  time  to  fix  unsatisfying  elements  in  the  concept.  

 

   

Figure  16  [The  TOWS  Matrix]  This  model  is  an  operational  planning  tool,  that  forces  organization  to  develop  marketing  initiatives  based  on  findings  form  the  SWOT-­‐analysis.      The  SO  strategies  focus  on  how  Virtual  showroom  can  use  its  strengths  to  take  advantage  of  the  opportunities  (Andersen  et  al.,  2007,  p.104).  Virtual  Showroom  is  entering  a  new  market  and  should  always  focus  on  using  its  strengths  in  exploiting  opportunities.  One  of  them  is  using  our  communications  

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forum  to  e.g.  create  a  self-­‐presentation  of  the  designers  that  position  them  as  creative  and  innovative  entrepreneur,  which  has  a  high  social  value.  Since  we  found  that  the  customer  segment  desire  to  expand  their  network  into  influential  and  important  key  players  in  the  design  industry,  it  would  be  beneficial  to  combine  the  personal  account  with  either  a  Linked-­‐In  sign-­‐in  or  a  functionality  with  similar  features  to  Link-­‐in.    Additional,  if  Virtual  Showroom  could  convince  CKO  to  donate  a  submission  by  using  the  argument  that  we  are  a  value-­‐be  a  part  of  it  because  of  the  social  status.  Obviously  another  SO-­‐strategy  would  be  to  use  the  competitive  advantage,  that  viewers  are  involved  in  the  design  process  with  the  User-­‐ambassador  opportunity.  

The  ST  strategies   r  to  to  avoid  

strengths  is  that  we  have  a  close  collaborations  with  both  designers  and  producers;  this  should  be  embraced  by  using  Customer  Relationship  Management  (See  section  5.4.1.).  Virtual  Showroom  should  of  course  also  point  out  our  competitive  advantages  compared  to  Quirky.  Since  it  is  irrelevant  and  against  the  competition  legislation,  Virtual  Showroom  would  never  mention  that  we  are  better  than  Quirky  because  of  this  and  this.  It  should  be  handled  delicately.      One  of  the  most  important  initiatives  is  attracting  new  business  partners.  Besides  from  emphasizing  that  there  is  proven  interest  on  particular  products,  Virtual  Showroom  should  display  how  profitable  it  has  been  for  other  business  to  produce  different  products,  e.g.  with  turnover  reports  and  purchase  statistics.    Finally  if  Denmark  is  a  too  would  be  easy  to  make  this  service  global.      The  WO  strategies  concerns  using  opportunities  to  overcome  the  weaknesses  Virtual  Showrooms  will  experience  (ibid).  Besides  using  a  potential  CKO  submission,  to  make  the  cost  revenue  less  exposed,  the  opportunity  we  found  in  SWOT  is  not  in  comparable  with  the  Weaknesses.  If  we  looked  deeper  into  financial  opportunities  we  might  find,  aspects  to  look  deeper  into  which  WO  strategies  could  be  built  on.    The  WT  strategies  explore  how  Virtual  Showroom  can  minimize  weaknesses  and  avoid  threats  (ibid).  With  the  right  marketing  mix,  the  chance  of  winning  more  market  shares  than  un-­‐identified  competition  and  Quirky  would  be  within  reach.  Potential  producers  should  always  be  nursed  and  given  a  imperatively  value  proposition  which  they  can  so  no  to.  This  is  done  through  Supplier  relation  management,  where  supplier  conflicts  and  trust  issues  also  are  handled  (section  5.4.2.).  If  Virtual  Showroom  experience  that  it  is  a  too  big  of  problem  that  the  revenue  streams  depend  on  producers  and  lack  of  control  within  production  and  sales,  a  new  mission  should  be  though  out.  Alternative  founders  should  invest  their  own  capital.      

5.2   OBJECTIVES    Since  the  first  original  vision  was  formulated  and  the  analysis  of  Virtual  Showroom  that  has  been  conducted,  substantial  risks  attached  to  the  concept  has  not  been  located  (see  4.2.2  SWOT).  However  the  original  vision  was  made  more  precise  and  adequate.  Additionally,  in  the  previous  SWOT-­‐TOWS  

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analysis,  various  solutions  were  found  to  embrace  possibilities  and  address  threats.  The  vision  for  Virtual  Showroom  is  therefore  still  the  same.  We  have  based  our  entire  analysis  on  vision  and  mission  and  in  the  conclusion,  we  will  validate  whether  it  is  likely  that  this  vision  will  lead  to  a  profitable  business  or  not.  However,  if  Virtual  Showroom  was  implemented,  the  vision  should  be  re-­‐considered  in  the  longer  run.      

5.3   STRATEGY      

 This  makes  it  possible  to  place  Virtual  Showroom  at  the  right  position  on  the  market.  In  relation  to  this,  it  is  important  to  consider  strategy  to  compete  against  other  similar  businesses,  primarily  because  Virtual  Showroom  targets  a  smaller  segment.  In  the  segmentation  the  target  group  of  Virtual  Showroom  was  identified,  which  is  crucial  in  order  to  design  a  strategy  that  is  based  on  a  target  group.  Besides  this  we  discussed  how  Virtual  Showroom  could  serve  its  customers  compared  to  its  competitors,  which  also  will  be  taken  into  consideration  when  planning  the  strategy.    

   

.  This  models  shows  the  four  different  competitive  strategies,  where  Virtual  Showroom  is  placed  among  Differentiation  Focus.  (Andersen,  2007,  p.  105)    Porter  suggests  that  a  business  can  be  sure  to  differentiate  themselves  on  the  market,  if  they  serve  their  segments  better  than  the  competitors.  According  to  Porter,  Virtual  Showroom  must  offer  their  customers  more  value  than  the  similar  businesses  (Andersen,  2005,  p.  105)  (Chaffey,  2009,  p.  281).    

ric  strategies  by  Michael  Porter  (Andersen,  2007,  p.  105).  This  model  matches  

following  strategies,  each  of  which  describes  a  specific  competition  strategy:      

Cost  Leadership   Cost  Focus   Differentiation   Differentiation  Focus  

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   The  four  strategies  are  divided  between  Competitive  Advantage  and  Competitive  Scope.  Competitive  Advantage  involves  two  things:  one  is  to  distribute  at  very  low  cost,  the  other  that  the  business  is  able  to  offer  a  unique  product.  If  we  distribute  at  low  cost,  it  can  take  place  through  e.g.  standard  products,  effective  distribution  and  economies  of  scale.  However  if  a  company  offers  a  unique  product,  it  occurs  through  e.g.  functions,  design,  performance,  brand  and  service  (Andersen,  2007,  p.  106).The  purpose  of  offering  a  unique  product  is  to  build  up  a  strong  preference  and  loyalty  towards  the  product  or  service  offered.  This  makes  the  company  stand  even  stronger  among  competitors.  According  to  Porter,  companies  that  offer  unique  services  or  products  are  often  prepared  to  generate  stable  and  financial  surplus.  The  other  part  of  the  strategy  is  Competitive  Scope,  this  refers  to  the  market.  Competitive  Scope  require  that  a  business  plans  and  bparticular  service.  Further  it  is  necessary  to  consider  what  exactly  is  to  be  offered  (e.g.  service  or  product),  what  geographical  segment  the  business  wishes  to  address  as  well  as  which  distribution-­‐channels  there  may  be  considered.      When  we  are  combining  those  two  factors  Competitive  Scope  and  Competitive  Advantage  you  get  the  matrix  of  the  four  above-­‐mentioned  strategies.  (Andersen,  2007,  p.  106)      Cost  Leadership  represents  that  a  company  will  cover  a  great  amount  of  people  within  their  segment  to  a  regular  price,  at  the  same  time  the  competitive  strategy  is  produced  from  low  costs  of  purchase,  production  and  distribution.  (Andersen,  2007,  p.  107)      Cost  Focus  involves  strategic  cost-­‐focus  which  means  that  is  still  focus  on  low  costs,  but  the  companies  serve  a  smaller  segment  compared  to  Cost  Leadership.    Differentiation  focuses  purely  on  differentiation  by  offering  a  unique  product  which  the  competitors  can  measure  themselves  with,  at  the  same  time  this  strategy  addresses  a  broad  segment,  which  seems  as  a  very  secure  strategy.  (Andersen,  2007,  p.  108)    

Differentiation  Focus,  because  we  offer  a  unique  sIndustrial  design  is  in  some  way  luxurious,  especially  because  the  distributed  products  could  be  

This  does  not  mean  that  they  necessarily  will  be  more  expensive  than  normal,  but  the  buyer  would  likely  be  one  within  the  segment  of  design-­‐interested.  Furthermore  it  is  extremely  important  that  we  make  sure,  through  our  value  proposition,  to  serve  our  customers  better  than  our  competitors,  so  that  we  will  be  the  preferred  among  our  segment  of  users.  (Andersen,  2007,  p.  108)      

think  the  model  over  time  has  become  obsoleted  to  an  extent.  Since  the  World  Wide  Web  has  grown  within  its  influence  and  revolutionises    

Strategies  contain  a  good  overview  of  how  four  distinctive  strategies  look  like,  and  we  can  place  ourselves  among  mostly  one  of  the  four.  With  help  from  a  row  of  other  strategies  it  makes  up  stand  strong  in  the  market.      

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5.4   TACTICS    The  marketing  tactics  concern  how  Virtual  showroom  is  going  to  implement  the  strategy  by  using  the  marketing  mix  and  CRM.  The  marketing  mix  is  used  as  an  essential  part  of  the  implementing  marketing  strategy  by  many  practitioners,  because  it  is  both  a  very  powerful  planning  tool  and  a  simple  framework  

including  three  further  elements  that  better  reflect  service  delivery  as  Virtual  Showroom  does.  These  are  people,  processes  and  physical  evidence  (Booms  and  Bitner,  1981  in  Chaffey,  2009,  p.449).      

push  strategy  to  marketing  and  does  not  recognize  the  needs  of  the  consumers.  For  this  reason  it  is  important  that  the  marketing  mix  is  back  up  by  detailed  knowledge  of  customer  behaviour  through  market  research  and  afterwards  adjusted  according  to  this.      Given  lack  of  resources  we  have  not  conducted  our  own  empirical  field  study,  which  we  recommend  is  executed  before  Virtual  Showroom  gets  implemented.  However  our  Marketing  Mix  is  based  on  the  knowledge  from  value  proposition,  stakeholder  analysis,  SWOT-­‐analysis,  SLEPT-­‐analysis,  competitor  and  market  analysis,  in  the  marketing  mix  we  have  tried  to  take  into  consideratLautenborn  (Lautenborn,  1990  in  Chaffey,  2009,  p.  449).      By  conduction  a  marketing  strategy  Virtual  Showroom  would  hope  to  achieve  better:  

Customer  acquisition:  Attracting  visitors  (Could  be  done  by  SEO  (Search  engine  optimization),  PPC  (pay-­‐per-­‐click),  Partnerships,  Online  ads,  email  marketing,  online  PR,  online  campaigns,  presence  on  design  forums,  blogs,  SNS  (Social  network  sites)  etc.)  

Customer  conversation:  Engaging  visitors  to  achieve  the  wanted  outcome  (by  satisfactory  customer  experience,  content  creation,  content  management,  merchandising,  usability,  accessibility,  design  and  customer  service  etc.)  

Customer  retention  and  growth:  Encouraging  repeat  usage  and  sales  (by  outbound  communications,  email  marketing,  customer  management,  loyalty  programs,  personalisation  etc.)  (Chaffey,  2009,  p.  482-­‐483)  

 

5.4.1  CUSTOMER  RELATIONSHIP  MANAGEMENT    Relation  Management  is  a  close  dialogue  between  the    customers.  Both  are  very  important  relations  which  needs  to  be  managed,  maintained  and  optimized  (Andersen,  2007,  p.  23,  p.  210).  When  talking  about  Customer  Relationship  Management  it  is  important  to  know  the  customers  behaviour  and  be  able  to  predict  how  to  cover  their  needs  and  wishes,  to  achieve  good  and  satisfied  customer  relationships.  This  means  that  we  need  to  establish  a  persistent  process  of  interaction  with  our  customers.  Often  this  is  seen  as  electronic  systems  that  manage  to  do  this,  but  also  interpersonal  communication  could  optimize  the  Customer  Relationship  Management.  (Chaffey,  2009,  p.  482)    The  Marketing  strategy  we  have  worked  on  is  targeted  at  the  primary  customers,  being  the  designers  selling  their  ideas  to  the  production  companies  through  the  web  service.  Another  marketing  strategy  would  need  to  be  developed  to  target  new  production  companies,  and  this  strategy  would  on  several  aspects  be  rather  different.    The  relationship  between  Virtual  Showroom  and  the  designers  (called  costumers  in  the  following)  is  not  

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specifically  personal,  since  it  is  mediated  through  a  website,  but  Virtual  Showroom  still  deals  directly  with  their  customers,  and  not  through  any  other  company.  Also  we  offer  costumer  support  by  phone  making  the  contact  more  personal.    Virtual  Showroom  will  participate  in  building  up  the  online  community  that  supports  direct  communication  between  designers,  peers,  experts  etc.      Further  we  could  serve  our  customers  with  optimizing  the  personal  service  called  Mass  customization  (Chaffey,  2009,  p.  486).  This  could  either  be  done  through  emails  with  service  messages  about  Virtual  

and  review  production.  Additionally,  it  would  be  appropriate  to  divide  our  customers  into  more  detailed  segments,  so  we  are  able  to  provide  the  best  service  possible  through  customizing.  E.g.  we  could  bring  specific  

about  what  is  the  preferred  content,  or  we  could  provide  responsibility  to  maintain  the  community  and  give  each  customer  more  voice  within  the  communication  between  peers  and  customers.  Being  able  to  fulfil  the  demands  of  customer  retentions,  a  suggestion  could  be  to  offer  luxury  frames  for  the  users  to  upload  their  design  (Chaffey,  2009,  p.  486).  This  could  e.g.  be  design  tools,  or  Virtual  Showroom  could  provide  customers  the  possibility  to  create  a  portfolio  for  their  ideas  uploaded,  if  you  are  not  a  designer  but  only  a  visitor  you  could  be  able  to  save  you  favourites.      

5.4.2  SUPPLY  CHAIN  MANAGEMENT    

important  to  create  the  optimum  customer  relations  in  the  longer  run.  As  the  supply  chain  can  be  divided  into  both  up  stream-­‐  (e.g.  subcontractors  or  e-­‐procurement)  and  downstream,  (e.g.  distributors)  after  when  in  the  process  and  activity  the  individual  supplier  is  involved.  By  Supply  Chain  Management  it  is  understood;  a  coordinating  and  managing  process,  which  incorporates  all  the  activities  of  the  different  suppliers,  so  there  will  be  a  fluent  and  continuing  process.  This  will  show  in  the  longer  run  as  lower  costs,  competitive  advantages,  and  with  better  service  and  products  which  leads  to  satisfied  customers.  (Andersen,  2007,  p.  48-­‐49)  (Chaffey,  2009,  p.  309)    For  us  it  is  relevant  to  focus  on  our  relationship  with  our  server  hosting  company,  our  production  company,  and  possibly  software  and  hardware  providers.  Hosting  company  and  software/hardware  providers  is  important  to  keep  satisfied  and  involved;  this  could  result  with  great  agreements  and  special  benefits.  It  is  of  course  also  important  to  collaborate  very  closely  with  our  production  companies,  this  is  some  the  two  most  important  suppliers  of  ours.  Our  producers  should  feel  well-­‐informed,  involved  and  coordinated  within  Virtual  Showroom.  Again  our  customers/designers  are  the  other  most  important  suppliers,  and  it  can  be  discussed  whether  their  relationship  should  be  discussed  as  actual  customers  (CRM)  or  if  they  actually  belong  as  a  part  of  our  up-­‐stream  suppliers  in  the  supply  chain  (SCM).  As  written  in  the  beginning  of  this  section,  we  chose  to  look  upon  them  in  the  above  section  about  Customer  Relationship  Management.  (Chaffey,  2009,  p.  335)    This  section  of  the  report  is  a  small  part  of  the  larger  (SOSTAC)  strategy,  which  is  approached  as  part  of  our  Supply  Chain  Management  process.  

5.4.3  THE  MARKETING  MIX  The  marketing  mix  (Chaffey,  2009,  p.  448)  is  used  in  order  to  try  and  implement  strategies  and  objectives  of  marketing.  One  difficulty  is  that  the  marketing  mix  is  symptomatic  of  a  push  approach  to  marketing  and  does  not  recognize  the  needs  of  the  customers.  The  marketing  mix  tends  to  lead  a  product  rather  than  a  customer  orientation.    Therefore  the  mix  should  be  backed  up  by  detailed  knowledge  of  buyer  behaviour  collected  through  

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market  research  and  it  should  be  adjusted  according  to  different  target  markets  or  segments  to  better  meet  the  needs  of  the  costumers.  Since  we  have  conducted  thorough  market  research  we  will  focus  on  the  chosen  costumer  segment  being:  Danish  designers  with  different  levels  of  design  skills,  interested  in  getting  their  industrial  design  manufactured.  To  back  up    

following:  Costumer  needs  and  wants  (for  the  product),  cost  to  the  customer  (price,  and  price  on  rival  service  providers),  convenience  (relative  to  price,  user  experience),  communication  (promotion,  marketing  tools)  Furthermore  since  the  Internet  is  not  regarded  as  being  push  media,  but  more  as  a  pull  media,  when  applying  the  marketing  mix,  this  needs  to  be  taken  into  consideration.    The  marketing  mix  cons  (Chaffey,  2009,    p.  448)  being:  Product,  Promotion,  Price,  Place,  People,  Process  and  Physical  evidence.  We  have  chosen  this  framework  to  try  and  enhance  customer  acquisition,  conversation,  retention  and  growth,  though  we  do  not  discuss  the  Process  factor,  finding  it  to  be  to  action  orientated,  and  more  relevant  for  the  next  step  in  a  process  of  actually  implementing  a  business.      Also  for  a  proper  marketing  analysis  it  would  have  been  necessary  to  base  it  upon  a  proper  demand  analysis,  competitor  analysis,  market  analysis  and  costumer  knowledge.  With  the  background  we  have  acquired  through  the  SWOT  analysis  and  the  competitor  analysis  we  have  tried  to  apply  the  marketing  mix  the  best  way  possible  acknowledging  our  lack  of  thorough  background  data.      Finally  the  marketing  mix  targets  the  chosen  costumer  segment,  and  we  have  not  worked  towards  a  marketing  plan  for  the  targeting  production  companies.  A  separate  marketing  strategy  for  reaching  this  segment  would  be  required.    

 PRODUCT  

The  product,  Virtual  Showroom  offers,  is  a  service  for  designers,  helping  them  to  sell  their  ideas.  The  product  is  backed  up  by  more  complex  digital  products  such  as  the  community,  the  rating  of  ideas,  the  information  available  etc.  These  products  are  free  of  cost.  All  of  these  add  to  a  perceived  extra  value  to  the  costumers,  given  they  have  some    interest  in  the  subject.  

and  are  sold  to  a  production  company.  Obviously  there  is  the  cost  of  time  and  effort  to  get  the  idea  online  and  submit  it  (Chaffey,  2009,  p.  452).  The  cost  of  time  needs  to  be  put  to  a  minimum  through  user  friendly  design.      In  relation  to  the  designer's  presentation  of  their  design,  the  SLEPT-­‐analysis  enlighten  that  there  are  various  legal  issues,  which  should  be  addressed.  In  the  approval  phase,  virtual  showroom  should  be  aware  of  legal  protection  of  digital  assets,  such  as  copyright  to  video,  music  and  images.      Initial  breakthrough  In  the  beginning,  the  marketing  strategy  would  mainly  focus  on  customer  acquisition.  This  could  be  done  in  many  ways  -­‐  being  on  a  niche  market  Virtual  Showroom  could  benefit  from  SEO  ,  PPC  ,  and  ads,  but  definitely  also  much  from  trying  to  reach  our  potential  customers  in  the  online  spheres  they  already  use,  this  could  be  design  blogs,  social  network  sites  etc.  This  way  Virtual  Showroom  could  reach  the  part  of  the  target  group  that  is  already  accustomed  with  using  design  communities.  

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 For  the  product  to  spread,  it  would  be    (Chaffey,  2009,  p.  452),  generating  a  rapid  spread  of  ideas  via  word-­‐of-­‐mouth  communication  of  the  users.  What  Virtual  

 453).  Here  the  spreading  of  the  idea  depends  of  initial  adoption  by  connectors,  who  can  be  characterized  as  being  socially  connected  people  who  encourage  adoption.  In  the  online  sphere  this  could  e.g.  be  design  bloggers.  If  Virtual  Showroom  could  succeed  in  getting  connectors  to  spread  the  word,  that  would  need  to  be  combined  with  the  costumer  feeling  attachment  to  the  product.  Virtual  Showroom  has  to  take  

 trying  to  assure  that  users  will  find  attachment  to  the  characteristics  or  attributes  of  the  product.  For  obtaining  this,  Virtual  Showroom  needs  to  try  and  deliver  uniqueness  and  aesthetics,  both  in  site  design  but  also  in  the  overall  user  experience.  Virtual  Showroom  needs  to  deliver  association  and  engagement,  which  fosters  emotional  involvement.  This  could  be  done  by  giving  the  users  a  voice.  Also  needed  would  be  to  add  personification  e.g.  by  expressing  character  and  personality,  to  be  expressive  value,  for  example  by  a  very  visible  online  value  proposition,  and  perceived  value  for  money,  or  value  for  time.    

 that  dictates  that  products  and  behaviours  spread  wide  only  when  they  fit  the  physical,  social  and  mental  context  into  which  they  are  launched.  Therefore  it  is  a  must  always  keeping  the  target  group  in  mind,  and  trying  to  understand  their  needs  and  context.  Also  ongoing  target  group  investigation  and  analysis  needs  to  be  conducted  to  always  try  and  improve  the  product.    By  delivering  these  things  Virtual  Showroom  would  also  be  trying  to  foster  costumer  conversation  and  to  some  extend  customer  retention  and  growth.      

 of  a  product  within  the  market.  But  Virtual  Showroom  would  need  more  background  knowledge  of  the  target  group  and  potential  customers  to  be  able  to  position  the  company  probably  and  thereby  try  to  become  the  costumers  first  choice.  Therefore  Virtual  Showroom  needs  a  differential  advantage,  and  to  try  offer  a  desirable  attribute  of  the  product  that  is  not  currently  matched  by  competitors.  Virtual  Showrooms  online  value  proposition  needs  a  clear  differentiation  from  competitors,  which  corresponds  with  Porters  generic  strategy  (Andersen,  2007,  on  Michael  Porter,  p.  105).    

 

PRICE  

In  the  case  of  Virtual  Showroom  the  price  on  different  ideas  will  depend  of  the  nature  of  the  idea.  As  mentioned  in  the  SLEPT-­‐analysis  price  will  be  influenced  by  increased  material  prizes,  fees,  taxes  and  to  some  degree  the  competition.    The  commission  to  the  company  should  be  set  to  a  fixed  percentage  rate  of  the  full  sum  the  designer  receives,  in  order  to  make  the  price  transparent  for  the  costumers.    Pricing  online  has  to  take  the  c457).  This  concerns  the  change  in  demand  for  a  product  or  service  in  response  to  changes  in  price.  Price  elasticity  of  demand  is  determined  by  the  price  of  the  product,  availability  of  alternative  goods  from  alternative  suppliers,  and  consumer  income.  Virtual  Showrooms  price  on  selling  the  idea  to  the  production  companies  is  an  inelastic  price.  This  means  that  a  large  change  in  price,  in  our  case  the  commission,  would  probably  only  be  accompanied  by  a  small  amount  of  change  in  demand.  This  is  due  to  the  fact  that  Virtual  Showroom  delivers  a  service  which  is  not  that  easy  to  compare  to  other  services  online.  Due  to  the  fact  similar  services  are  all  a  little  different,  to  some  degree  targeting  different  market  shares.  Still  they  do  influence  the  market  and  the  price.  

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Also  we  believe  there  is  value  for  the  designers  in  finding  their  product  in  the  stores,  building  a  portfolio,  getting  noticed,  building  a  community  etc.  Something  not  all  competitors  offer.  Virtual  Showroom  should  not  be  marketed  as  being  especially  cheap  on  commission,  but  as  trying  to  deliver  more  value  than  their  competitors.    

 

PLACE  

The  initial  idea  for  Virtual  Showroom  was  for  it  to  be  present  only  online,  but  we  have  realized  that  Virtual  Showroom  may  benefit  from  some  offline  presence  and  marketing  as  well,  to  make  the  brand  more  visible  and  to  build  trust  by  making  it  seem  more  legit,  giving  the  impression  that  it  is  a  established  company  not  only  found  in  the  online  sphere.  With  that  being  said,  most  of  the  marketing  budget  would  definitely  be  done  online,  but  by  trying  to  analyse  the  impact  the  two  different  ways  of  marketing,  the  outcome  can  be  measured  and  the  budget  set  accordingly.  Later  on  analysing  the  different  marketing  options  within  the  different  media  could  be  done.    It  is  necessary  to  keep  in  mind  what  the  Internet  as  a  medium  requires  and  offers  so  it  can  be  used  to  the  fullest.  In  the  case  of  Virtual  Showroom  it  would  make  sense  to  stress  and  exploit  especially:  

   

Interactivity:  Where  the  traditional  media  can  be  characterized  as  push-­‐media,  working  mainly  one-­‐way  company  to  costumer,  the  Internet  is  dominantly  a  pull-­‐media,  and  most  costumers  have  made  an  active  choice,  going  to  a  website.  Also  the  media  itself  is  of  a  interactive  nature.  This  may  as  well  be  exploited,  since  it  can  give  the  user  a  voice  and  enhance  engagement  and  emotion.  

Intelligence:  The  Internet  offers  a  cheap  possibility  of  collecting  market  research.  Ideally  Virtual  Showroom  could  have  conducted  initial  research  as  well  as  on-­‐going  market  and  costumer  research  after  launch.  

Individualization:  Enables  Virtual  Showroom  to  personalise  the  marketing  to  the  specific  target  segments  and  even  to  the  specific  individual  in  some  instances.    

   Virtual  Showrooms  presence  Virtual  Showrooms  Internet  channel  strategy  will,  of  course,  depend  on  the  excising  arrangements  for  the  market.  Virtual  Showrooms  is  an  intermediary  and  uses  the  Internet  as  a  communication  channel  and  as  a  distribution  channel.  Almost  all  of  the  company's  presence  is  online.  This  makes  it  as  an  e-­‐organization  because  it  uses  technologies  as  the  core  of  the  business  and  for  managing  the  entire  business  process.  (Chaffey,  2009,  on  Azumah  et.  al  (2005)  p.  462)    An  exception  is  that  Virtual  Showroom  will  offer  costumer  service  by  telephone  as  well.  This  may  enhance  the    perception  of  the  company  being  legit,  and  their  wish  to  trust  us  with  their  ideas.  As  mentioned  in  the  SLEPT-­‐analysis  Virtual  Showroom  should  take  social  factors  into  consideration  such  as  trust  in  online  markets.  Though  is  not  a  big  problem  in  Denmark,  compared  to  other  nations,  the  company  needs  to  keep  in  mind  that  costumers  are  sharing  sensitive  material  with  unknown  subjects;  the  company,  the  other  users,  and  ultimately  anyone  who  enters  the  site.  Even  though  the  Internet  offers  worldwide  reach,  Virtual  Showroom  will  only  target  a  Danish  market.      Besides  the  online  presence  at  Virtual  Showrooms  own  website,  the  company  should  of  course  work  towards  being  visible  at  many  online  design  forums,  SNS,  blogs  and  spheres,  not  only  by  advertisement,  but  by  adding  content  and  being  active  and  visible.  

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PROMOTION  

The  promotion  is  a  part  of  the  communication  strategy.  Virtual  Showroom  could  use  tools  as  advertising,  public  relations,  direct  mail,  exhibitions  and  try  and  enhance  word-­‐of-­‐mouth  (Chaffey,  2009,  p.  462).  Like  mentioned  previously  Virtual  Showroom  needs  to  consider  how  to  budget  online  vs.  offline  advertisement.  For  this  Virtual  Showroom  would  need  a  better  understanding  of  the  main  target  group,  in  order  to  know  where  it  would  be  most  profitable  to  invest  in  advertisement.  Virtual  Showroom  would  need  to  understand  where  the  potential  costumers  can  be  found,  and  to  what  extent,  the  target  group  can  be  reached  by  traditional  media  as  well.    Online,  to  try   of  the  website,  (Chaffey,  2009,  p.  463)  while  being  on  a  niche  market,  a  good  investment  would  be  search  engine  marketing,  since  the  costumers  actively  search  for  the  product  online.  This  is  because  niche  products  or  services  often  are  hard  to  find  offline.  In  relation  to  online  advertisement,  it  was  found  in  the  SLEPT-­‐analysis,  that  there  are  various  marketing  laws,  which  also  has  to  be  respected.  

PEOPLE  

The  people  variable  involves  the  delivery  of  service  to  customers  during  interactions.  Virtual  Showroom  would  offer  both  online  and  offline  support.  Their  employees  would  need  to  be  skilled  in  maintaining  the  site,  and  in  some  design  areas  to  be  able  to  offer  guidance  and  value  to  the  community  if  needed.  This  would  reflect  on  the  company  profile  and  brand.  

 PHYSICAL  EVIDENCE  What  is  particularly  important  for  service  delivery  is  physical  evidence.  The  physical  evidence  variable  involves  the  tangible  expression  of  a  product.  When  dealing  with  a  service  online  this  needs  to  be  stressed  even  more,  since  the  nature  of  a  service  and  of  the  online  sphere  is  not  tangible.      Physical  evidence  should  be  applied  to  the  site  by  clever  site  design  and  could  also  be  expressed  by  staff  contact,  experience  of  brand  and  offline  presence  through  marketing  and  advertisement.    It  will  add  to  the  physical  evidence  that  Virtual  Showroom  can  be  reached  by  phone  offering  direct  costumer  service,  and  that  the  previously  winning  ideas  and  products  will  be  featured  on  the  site  making  the  service  more  tangible.  Also  the  individual  designer  profile  and  visible  presence  on  the  website  will  adds  to  the  physical  evidence.    Online  branding  To  build  a  proper  online  brand,  Virtual  Showroom  need  to  take  into  consideration  that  online  brands  are  the  sum  of  characteristics  of  a  service  perceived  by  the  user,  therefore  the  brand  is  completely  dependent  on  costumer  perception.  (Chaffey,  2009,  on  Leslie  de  Chernatony  and  Malcom  McDonald  (1992),  p.  465)  Online  customers  can  add  value  to  a  brand  by  forums,  ratings,  and  adding  content.      The  online  brand  is  more  an  experience,  and  it  should  be  able  to  accommodate:  (Chaffey,  2009,  on  Dayal  et.  al.  (2000),  p.  465)    

The  promise  of  convenience:  Be  better  than  the  rivals  or  the  offline  experience.  Virtual  Showroom  offers  a  very  quick  connection  to  other  designers  and  production  companies  that  certainly  make  it  faster  and  easier  for  some,  than  building  such  a  community  in  the  offline  world.  Specifically  targeting  the  Danish  market  may  add  value  that  the  competitors  do  not  offer.  

The  promise  of  achievement:  Assisting  consumers  in  achieving  their  goals.  Even  if  the  design  idea  does  not  win,  designers  can  find  advise,  peers  etc.  achieving  other  goals.  

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The  promise  of  fun  and  adventure:  Needs  to  be  built  through  clever  site  design,  and  supported  by  the  overall  user  experience,  the  content  and  the  community.  

The  promise  of  self-­‐expression  and  recognition  by  personalising  services:  This  could  be  supported  by  the  individual  profiles  and  especially  by  the  means  of  expression.      

The  promise  of  belonging:  Again,  this  could  be  supported  by  the  individualized  and  personal  profiles  as  well  as  the  means  of  expression.  

 By  trying  to  address  these  needs  Virtual  Showroom  would  hope  to  build  a  strong  brand,  that  in  return  would  build  trust,  attachment,  be  recognizable  and  enhance  site  traffic  and  retention  of  the  users.  

 

5.5   ACTION    This  section  is  meant  to  provide  an  action  plan  of  how  the  marketing  mix  should  be  put  into  practice,  concerning  all  factors  as  time,  finances  et  ceteraresources  as  employees,  skills,  competences,  economic  situation  and  partnerships,  we  find  it  difficult  to  plan  all  the  concrete  actions  for  the  future.  This  would  feature  many  details  that  we  do  not  find  necessary  in  this  project.    An  action  plan  would  typically  specify  concrete  tasks  that  need  to  be  performed,  e.g.  planning  a  detailed  budget,  planning  how  and  when  to  contact  potential  partners,  and  a  detailed  timescale  e.g.  a  Gantt-­‐card.  This  would  be  the  next  step  if  Virtual  Showroom  was  to  be  realised.    

 

5.6   CONTROL    Again  this  section  will  be  more  relevant  in  the  future,  when  or  if  the  concept  is  implemented.  But  we  will  shortly  mention  some  of  the  initiatives  that  could  benefit  the  control  of  Virtual  Showroom,  and  could  measure  if  the  business  actually  reaches  its  objectives.    Virtual  Showroom  should  prioritise  to  involve  the  users  to  evaluate  the  site,  both  its  functionality  and  use.  They  should  conduct  usability  tests,  to  make  sure  that  all  user  groups  are  able  to  navigate  on  the  site  without  problems.  And  lastly  we  suggest  that  they  make  some  analyses  of  statistics  from  the  website,  as  number  of  visitors,  number  of  active  visitors,  and  number  of  profiles  and  uploads.    

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6.  DISCUSSION    

Describing  and  analyzing  Virtual  Showroom  as  a  concept  have  resulted  in  complications  that  need  to  be  looked  into.  This  chapter  will  identify  these  complications  and  conflicts  that  have  emerged,  and  should  be  resolved  or  considered  if  moving  on  with  the  concept:      Main  focus  on  only  one  stakeholder  Throughout  the  process  we  have  kept  our  focus  mainly  on  the  designers,  for  example  this  is  evident  in  the  Marketing  mix,  and  this  is  obviously  a  significant  issue  if  implementing  the  concept.  Before  the  implementation  could  begin,  we  would  also  have  to  understand  the  segment  of  the  production  

 concept.  Based  on  that,  a  new  marketing  strategy  would  have  to  be  planned,  targeting  the  partners.      The  consequence  of  no  control  of  sales  or  production  Having  chosen  to  put  the  production  and  sales  responsibility  to  external  partners  we  lose  some  important  control.  First  off,  Virtual  Showroom  may  not  insure  that  sold  ideas  go  into  production,  since  

 Also  the  economic  consequence  is  significant,  this  will  be  discussed  later.      Channel  conflict    the  trouble  with  having  production  also  handling  sales  Virtual  Showroom  may  encounter  the  fact  that  production  companies  do  not  also  handle  sales.  Since  we  have  not  talked  to  an  actually  production  company,  we  have  perhaps  had  a  too  idealistic  idea  about  their  role.  Is  there  actually  a  Danish  firm  that  has  the  resources  to  do  both  production  and  sales?  And  if  not,  would  a  production  company  use  the  time  on  setting  up  a  relationship  to  a  sales  firm?  We  have  not  focused  on  this  whole  aspect  of  the  concept,  but  it  is  essential  that  this  external  part  works,  for  the  concept  to  have  success.  A  start  for  further  research  would  be  to  explore  how  production  firm  works,  perhaps  in  form  of  consultation.          Supporting  the  creative  industry  -­‐  nurturing  designers  vs.  allowing  everybody  to  be  a  designer  

everybody  the  opportunity  to  design,  and  compete  with  educated  designers.  Could  it  be  a  seen  as  undermining  educated  designer  allowing  everybody  to  call  themselves  a  designer,  or  does  it  only  create  growth  and  competition  amongst  a  larger  group  of  creative  people?  This  is  definitely  worth  taking  into  consideration  if  developing  the  concept  further.    How  to  handle  legal  rights  including  copyrights?    

uploading  to  the  site?  How  to  avoid  fraud?  Implementation  and  maintaining  the  concept  will  need  legal  consultation,  and  there  also  has  to  be  determined  if  it  is  necessitate  employing  a  full-­‐time  attorney  to  maintain  this  side  of  the  concept.          

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 We  know  that  Virtual  Showroom  has  a  role  in  what  happens  between  a  designer  uploads  an  idea  and  the  idea  being  presented  on  the  site.  But  what  exactly  happens  needs  to  be  outlined.  Will  the  designer  already  know  how  much  they  are  able  to  earn  if  their  design  gets  sold,  or  do  Virtual  Showroom  decide  this  in  this  phase?    Would  there  need  to  be  an  approval  phase  and  what  would  the  guidelines  for  this  be?  It  would  be  wise  involving  the  user  (a  designer)  at  an  early  stage  in  this  development,  which  could  

   Can  VS  create  a  revenue?  A  aspect  to  consider  is  how  Virtual  Showroom  will  increase  the  revenue  so  it  will  be  greater  than  the  

he  concept  a  realistic  business  -­‐  there  needs  to  be  found  a  secondary  source  of  income.      We  also  have  not  considered  salaries.  How  many  people  are  exactly  needed  to  run  this  business,  and  how  expensive  will  this  be?    Discussing  the  revenue  will  continue  in  the  following  conclusion  of  the  whole  project.  

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7.  CONCLUSION  

Being  the  intermediary  that  enables  designers  to  showcase  their  ideas,  and  potentially  .  The  vision  has  not  changed  throughout  the  whole  process,  since  it  was  the  

business  foundation.    We  defined  how  this  vision  should  be  fulfilled  with  our  mission.  The  goal  of  this  paper  was  therefore  to  validate  the  mission  (See  section  2.1)  which  we  have  done  through  different  methods  throughout  this  

Can    

 The  market  that  Virtual  Showroom  is  trying  to  access  contains  various  profit-­‐possibilities  which  was  enlightened  in  the  environment  and  situation  analysis  (See  section  4.1.2.  &  section  5.1.).  In  spite  of  this,  

ability  to  create  an  income  big  enough  to  cover  the  known  costs  connected  to  the  concept.      As  we  just  stated,  one  of  the  core  critical  aspects  in  Virtual  Showroom  is  the  revenue  and  cost  structure.  The  success  of  Virtual  Showroom  is  very  depended  on  produinterest  from  the  customer  segment.  Recession  and  a  non-­‐solid  value  proposition  for  the  production  companies  are  the  main  arguments  why  it  will  be  difficult  to  attract  production  companies  to  buy  design  ideas.  Given  the  previously  market  research  and  existing  players  at  the  market,  we  do  however  believe  that  there  is  a  potential  customer  market  for  Virtual  Showroom.  It  is  the  construction  of  the  business  model  that  in  the  end  will  have  fatal  consequences  for  Virtual  Showroom.    

differentiation  focus  strategy  in  order  to  differentiate  from  its  competitor.  In  order  to  gain  comparative  benefit,  Virtual  Showroom  should  seek  tSince  Virtual  Showroom  is  very  reliable  on  designers  and  production  companies  CRM  and  SRM  should  be  incorporated  in  the  marketing  mix.  Unfortunately,  an  excellent  marketing  mix  that  exploits  opportunities  will  not  make  up  for  the  critical  threats  in  the  environment  and  weaknesses  in  the  business  model.      The  problem  with  the  business  model  is  that  we  conducted  all  our  work  on  the  thesis  that  Virtual  Showroom  would  be  able  to  attract  production  companies.  It  is  only  in  the  stakeholder  analysis  that  a  

to  ensure  success  of  the  business  it  is  necessary  to  satisfy  and  successfully  recruit  each  group  of  stakeholders,  and  preferably  all  at  once.  In  retrospect  we  see  that  we  focused  more  on  analysing  the  customer  segments  than  the  business  partners,  which  Virtual  Showroom  is  vitally  depended  on.  In  order  to  make  the  cost  structure  less  vulnerable,  a  better  value  proposition  should  be  proposed  for  production  companies.  This  would  need  to  rest  on  a  thorough  understanding  of  these  companies,  so  more  research  would  need  to  be  conducted.  Also  a  specific  marketing  strategy  to  reach  these  should  be  performed.    Ba Can  

It  is  our  overall  opinion  that  strong  enough  foundation  for  being  able  to  

function  as  a  sustainable  e-­‐business.    Although  we  find  that  Virtual  Showroom  would  be  able  to  generate  value,  it  comes  down  to  the  concepts  inability  to  generate  a  sustainable  revenue.  Based  on  our  research,  it  would  be  hard  for  Virtual  Showroom  to  find  enough  revenue  sources  to  cover  the  mayor  costs  that  the  concepts  would  cost  to  

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implement.                  The  main  argument  for  not  implementing  Virtual  Showroom  would  therefore  be  its  weak  cost  and  revenue  structure.  However,  we  do  believe  that  Virtual  Showroom  has  a  profit  potential,  and  a  market  share,  as  long  as  it  would  be  possible  to  convince  production  companies  of  the  value  proposition  offered  by  Virtual  Showroom.  If  the  concepts  would  be  revised,  so  that  the  business  would  not  be  depending  on  recruiting  production  companies,  the  concept  could  end  up  becoming  an  interesting  e-­‐business.  Independence  obviously  would  raise  new  challenges  and  obstacles  to  be  dealt  with,  but  if  overcoming  these,  there  is  still  the  huge  challenge  of  building  a  strong  community  of  designers,  attracting  many  visitors  to  the  website  and  the  assuring  retention  of  these.    Altogether  the  concept  needs  to  be  revised,  which  will  mean  overcoming  new  obstacles  in  order  to  make  this  concept  sustainable  and  ready  to  be  implemented  on  the  market,  we  find  the  concept  having  value  and  possibilities.      

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8.  LITERATURE        Andersen,  F.R.,  Jensen,  B.W.,  Jepsen,  K.,  Schmalz,  P.,  Sørensen,  J.K.,  2007,  International  Markedsføring,  3.  udgave,  Trojka      Chaffey,  D.,  2009.  E-­‐Business  and  E-­‐Commerce  management  -­‐  Strategy,  Implementation  and  Practice.  4th  ed.  England:  Prentice  Hall.    Cornelissen,  J.,  2011.  Corporate  Communication:  A  Guide  to  Theory  and  Practice.  3rd  ed.  London:  SAGE  publications.    Dell,  2010.  Ideastorm.  [online].  Available  at:  http://www.ideastorm.com  [accessed  16  May  2011]    Erhvervs-­‐  og  Byggestyrelsen,  2007.  Et  billede  af  dansk  design  -­‐  udfordringer  og  perspektiver.  [online]  (published  April  2007).  Available  at:  http://www.ebst.dk/file/6265/et_billede_af_dansk_design.pdf  [accessed  14  May  2011]    kickstarter.com,  2009.  Kickstarter.  [online].  Available  at:  http://www.kickstarter.com  [accessed  16  May  2011]    

 the  research  on  organization    design.  Management  Science,  Vol.  26  (3),  pp.  322-­‐341.    Osterwalder,  A.  and  Pigneur,  Y.,  2010.  Business  Model  Generation:  A  Handbook  for  Visionaries,  Game  Changers,  and  Challengers.  Self  Published.    Olander,  S.,  2003.  External  Stakeholder  Management  in  the  Construction  Process.  Licentiate  Dissertation.  Lund  University.  pp.  60.    Starbucks  Cooperation,  2010.  My  Starbucks  Idea.  [online].  Available  at:  http://mystarbucksidea.force.com  [accessed  16  May  2011]    Thomsen,  C.,  2009.  Stakeholder.  In:  Kolstrup,  S.,  Agger,  G.,  Jauert,  P.  and  Schrøder,  K.,  ed.  2009.  Medie-­‐  og  kommunikationsleksikon.  Frederiksberg:  Samfunds  litteratur,  pp.  499-­‐500.    Zott,  C.  Amir,  R.,  Massa,  L.,  2010.  The  business  model:  theroretical  roots,  recent  develpments,  and  futher  research.  Working  paper.  IESE  business  school  -­‐  University  of  Navarra.    

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9.  APPENDIX    

 

Assignment  overview    who  wrote  what       appendix  1