SBC102 case
Case study
FiberGood’s Business Model Canvas
I. Introduction
Who do we create value for? Who are our most important customers? A business model, such as the Canva Model, allows us to develop and visually present a competitive and innovative business model. It helps to segment proposals and transform business ideas into innovative actions.
One of the most well-known objectives of the Canva Business Model is to create value for customers. For this reason, from the beginning, FiberGood has worked very hard to offer innovation and uniqueness. We have strived to present a proposal that not only benefits us, but also the people and organizations that collaborate with us and the people in the communities around us.
Our value proposition is focused on the benefits that can be obtained through the water hyacinth plant, such as the ecofiber obtained from the stem of the plant, and the compost obtained from the plant’s waste. In the same way, it is important to know the benefits that this brings with it. Our value proposition addresses, in addition to the product, the benefits it has for the environment, which are focused on the reduction of the water hyacinth plague that affects the bodies of water where it is present, and the jobs we seek to provide for the people of the affected communities around it, a situation that will be addressed in more detail in this case study.
The Canva Business Model helped us define and visualize our ideas, the key partners for our business, and the actions to be taken. That is why this case study will address in detail FiberGood’s canva business model. It will detail the cost structure, customer segments, communication channels, customer relationships, revenue streams and, of course, the value proposition presented. What objectives do we seek to achieve? What do we offer in return? What are our clients and our costs? This case study will address all of these questions.
II. Body
1. Value proposition
FiberGood´s value propositions are not only oriented to build economical value, our ecofiber and fertilizer is not only going to generate incomes, but it will also create social and environmental value.
FiberGood´s main economic value proposition is to produce an ecofiber made of water hyacinth, this fiber is going to be multipurpose, durable, highly resistant, eco-friendly, and with a very competitive price. This fiber could be used to obtain various products but specially in the manufacturing and textile industries´ productive processes. With this fiber, we will be offering a new commodity to these industries; a commodity that contributes to the responsible production and consumption culture. This social business will also offer another product, a fertilizer made from the waste of the water hyacinth that is generated when producing the fiber (since only the stems are used to produce the fiber) and other organic waste. This fertilizer was made in order to eliminate the waste in our productive process while generating another product that represents an income source.
Our business will also create environmental value since it is working with the water hyacinth plague, a very invasive plant that can lead up to dry freshwater bodies, affect the water oxygenation and obstruct the sunlight which causes several damages to the aquatic ecosystems in this water bodies. One of FiberGood´s main purposes is to reduce and control this plague, to safeguard freshwater bodies and the aquatic ecosystems living there.
FiberGood also creates social value because it offers fair jobs to the members of the communities affected by the water hyacinth plague, we will employ them to collect our raw material, which is the water hyacinth, providing them a source of income for them and a solution for the problem of this invasive plant in their freshwater bodies.
2. Customer Segments
FiberGood creates value for customers who are committed to change and innovation in society, supporting sustainability and sustainability, creating not only an economic benefit in the products but also a social importance by helping the growth of the business chain in charge of the production of our fiber.
Our customer segment is wide because the fiber can be used in different industries, mainly we will focus on two dedicated to manufacturing and textile, both have one intention which is to bring to the final consumer a finished product with a monetary purpose. And our secondary product is dedicated to agriculture, as this will help the soil fertility by increasing the amount of nutrients in it, besides that fertilizer is environmentally friendly and its use can produce non-toxic food.
Interested customers must be honest, loyal companies that can create a lasting relationship with us, and constant communication for a good working relationship. In return we offer them an ecological raw material based on a reduction of aquatic pest, this fiber can be used in the elaboration of many products, creating in these same ones an added value. We also offer a fertilizer with the residues from the realization of this fiber.
The problem that we solve in FiberGood is the damage of the marine ecosystem caused by the invasion of the aquatic lily pest in some lagoons of the state, in addition to the production and responsible consumption of a fiber based on this weed, without leaving behind the dignified jobs and support to needy communities that will be given.
3. Channels
We communicate with our customers through various channels, both online and offline, to ensure we reach them effectively. These channels include:
Social media: we use social media platforms such as Facebook, Instagram, and Gmail to interact with our customers. Through these networks, we share news, updates, tips related to our products, and answer customer questions and comments.
Customer Service: We have customer service available through various channels, such as telephone, live chat and email. Our customer service team is trained to provide assistance and answer any questions customers may have about our products.
Physical points of sale: We also distribute our products through distributors. We maintain constant communication with our distributors to ensure that they are informed about our products and can provide accurate information to customers.
We use a combination of online and offline channels to communicate with our customers and ensure that they have access to the necessary information about our products and services. This enables us to reach a wide audience and provide excellent customer service.
4. Customer relationship
In FiberGood, we highly value the relationship with our clients, as we understand that they are a key part of our success. We seek to establish a solid and lasting relationship with them, based on trust, transparency and mutual satisfaction.
Our company is focused on promoting eco-responsibility and sustainability, so our customers are environmentally conscious people who are looking for products or services that are environmentally friendly and innovative. This common ground allows us to establish a special connection with our customers, as we share similar values and goals.
In our relationship with our customers, we seek to foster open and effective communication. We are always ready to listen to your needs, concerns and suggestions, as we value your opinions in order to improve as a company and our products.
In addition, we understand that each customer is unique and has individual needs. Therefore, by offering a product such as ecofiber, it is easy for them to customize it to meet their specific needs. We offer eco-friendly products or services that are tailored to their preferences and provide them with added value.
5. Key resources, activities, and partners
In order to deliver the value proposition that FiberGood offers in a correct and clean way, any business model is going to need to define its resources, activities and partners.
The main resources FiberGood needs to deliver its value proposition and meet the UN Goals, are human resources and the raw material, which in this case it’s the Water Hyacinth, and finally the material resources, which are the machines and tools that are going to be used into the production process. These resources are essential, as the influence directly the cost structure and value proposition. For example, the cost of the machines used in the production process, such as a decorticator machine and the cost of the human resources, which is the salary that it is intended to be paid in order to offer decent employment, will affect directly the revenues and profitability of the social business.
Now that the main resources have been established, it is crucial to organize which activities are important and how the resources are going to be involved. These key activities are directly linked to the cost and resource optimization, that is why it is really important to identify which activities are profit oriented and which are social impact orienteded. In FiberGood’s Case, some of the profit oriented activities involve the sale of the ecofiber and fertilizer products that means that it is important to create a sales strategy, identifying target markets, and establishing distribution channels, but if FiberGood wants to achieve its profitability goals, partnerships and collaborations are going to be needed, which involves establishing long-term relationships with stakeholders, customers and the community. And of course, the production process is crucial to deliver a high quality product, this process involves the recollection of the water hyacinth or raw material, the defibering of the plant using a decorticator which is one of the key resources, and reuniting the waste of the raw material in order to create the organic fertilizer.
Finally, we need to find and establish the key partners, FiberGood has been searching for partners who can easily help to expand its social mission and a profile that matches with the mission and vision that FiberGood aims to achieve, which is oriented to the community and helping vulnerable sections of the country.
The partnerships and alliances that FiberGood has achieved, are all focused on providing help with the production process and activities that cannot be carried in-house. For example, one of FiberGood’s partnerships and supplier is going to be the Aquatic Ants, a group of one of the communities affected by the water hyacinth plague, this group is going to help FiberGood to organize and deliver cleaning brigades to reach two purposes, cleaning the water bodies and recollecting the raw materials that FiberGood needs. Finally, another important partner and supplier of FiberGood, is the City Hall of Veracruz and the Office of Agricultural Promotion and Rural Development, as they are going to provide for important raw material needed for the compost and organic fertilizer that the social business is going to offer.
6. Revenue streams
As for the payment method, we will have two options: credit and cash. We did it this way so that our customers can choose how to pay according to their needs and preferences.
FiberGood offers a main product and a by-product, fiber and fertilizer respectively, for both we consider a profit margin of 35%, leaving us a very attractive profitability without preventing us from offering our products at a very competitive price within our market. If we sell 100,000 meters of fiber per month, we will have revenues of $19,611.00 USD with a profitability of $6,863.00 USD per month.
Now, for fertilizer sales, if we sell 50,000 kilos per month, we will have revenues of $7,612.00 USD, leaving us with a profitability of $2,664.00 USD per month. The disadvantage of the profitability of the fertilizer is that it will not be profitable until the fourth month since it takes the first three months for the fertilizer to be ready for sale. So, the first three months will only generate costs that will later be offset.
Both operations, the ecofiber and the sale of the fertilizer, will leave a total profit of $9,528.00 USD per month (after the fertilizer business starts to be profitable). Even if we only sell 80% of the estimate, we will still make a profit of $4,083.00 USD per month.
III. Conclusion
In conclusion, FiberGood’s business model focuses on creating value for customers, society and the environment. Our value proposition includes the production of ecofiber from water hyacinth, which offers economic benefits to industries such as manufacturing and textiles, while promoting responsible production and consumption. In addition, FiberGood produces compost from the waste generated during the fiber production process, which contributes to soil fertility and environmentally friendly agriculture, making it a win-win business.
FiberGood’s business model demonstrates a sustainable and socially responsible approach, combining economic, social and environmental value creation. By addressing an urgent environmental problem and offering innovative and environmentally friendly products.
IV. References
B. Fritscher, Y. Pigneur. “Visualizing Business Model Evolution with the Business Model Canvas: Concept and Tool,” 2014 IEEE 16th Conference on Business Informatics, Geneva, Switzerland, 2014, pp. 151-158, doi: 10.1109/CBI.2014.9.
Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S., & Namitulina, A. (2015). The Innovative Business Model Canvas in the System of Effective Budgeting. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2581565