Discuss about the Millhouse Construction: Business Model Canvas and Organizational Structure.
Millhouse Construction is an Australian company which has the combination of three business activities- investments, development and construction. This report states the business model canvas for Millhouse Construction. All the business activities of the company are analysed from the case and drawn into a business model. This report also suggests the suitable organizational structure for the company.
Business Model Canvas can be defined as a tool for relating, evaluating and designing the model for business. In the business model generation all the techniques, concepts and tools are used to be tie together.
Below is the business Canvas Model for Millhouse Construction:
| Designed for: Millhouse Construction | |||
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Key Partners · Government · Solution Providers · Engineers · Architects · Designers |
Key Activities o Construction o Development o Health & Safety o Diversity & Inclusion o |
Value Propositions v Expertise in managing the assets v Generating value by creating high quality v Sustainability v Development opportunities v Challenging and interesting projects |
Customer Relationships § Customer focus § Integrated and innovative solutions for clients § Niche market |
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Resources ² Human resources ² Financial resources ² Equipment’s and machineries |
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Customer Segments ¬ Public client ¬ Private client -serviced apartments -retail centres |
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Channels ü Head Office Sales ü Web platforms |
Cost Structure Ø Rent & Utilities Ø Marketing Campaigns Ø IT Ø Infrastructure Ø Head Office Salaries Ø Cost incur on Programs |
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Revenue Streams Sales Revenue from construction and development project Investment returns |
(Osterwalder and Pigneur, 2013)
For many enterprise partnerships or key partners has become a source to gain value proposition or to carry out business activities smoothly. Millhouse shall lay focus on the strategic alliances i.e. joint venture between non-competitors. The partnership brings numerous benefits for the business, for example, risk and uncertainty reduction, minimization of cost all the way through offshoring or outsourcing, possession of explicit resources and activities. The key activities of Millhouse Construction which influence customers are: construction, development and management of investment. Besides this company`s key activities also includes lifestyle programs, health and wellbeing programs. The key activities not only lay emphasis upon customer services but also concentrates upon the employees. This could motivate the employee and enhance their level of engagement. Value Propositions element of the business canvas model will facilitate in satisfying the customer`s needs or solving their problems. Company shall focus on Generating value by creating high quality. The product or service of the company shall be of high quality. Opportunities for development in context to employees are also a value proposition for the company (Joyce & Paquin, 2016). Next point in business canvas model is of customer relationships. Customers are the centre of business or in other words, activities of the organization are cantered for the customers. The integrated and innovative solution shall be provided to the customers. All the activities shall focus on the customers and niche market shall be developed for the business to target potential customers.
Company shall focus on a particular segment in which potential customers for the business exist i.e. customer segments. The customer segment of Millhouse includes- public client, private client and Customer projects. All such customer segments are crucial for the business. The business of the company is development and construction. This segment of the customer has a number of the audience which could be targeted for the business. Resources are the element allocates the enterprise to put forward and convey its value proposition. In order to carry out the business activities, a number of resources are required. For example in construction project machinery are required and machinery could be a resource for the business. Important resources for Millhouse Construction are- financial resources, to bear the expenses; human resources, to perform business activities; machinery, to carry out the work related to construction and other business activities. Next element of business model is channels of distribution. This element characterizes the manner how the company will influence its customers to pass on value. Distribution of service could be done by the head office. The service or product could be purchased by the customers directly from the office of the company. Another channel is web platform. This channel could be used for creating awareness among the customers, allowing purchases, providing support, delivering as well as selling services to them. The web platform is a unique idea for distribution of the product or service to the customers. Technology advancement provides benefits to the business and web platform is one of the benefits.
Cost Structure (Money out) – Cost incurs on carrying out business activities. It is up to the businesses that how they manage their cost. As by minimizing cost they can get more profit. Millhouse Construction would have to incur cost on utilities which include- computer systems and furniture. The marketing campaign for promoting the business will also lead towards the high cost of business (Osterwalder and Pigneur, 2013). Another expense for the company is related to the programs which are going to be initiated by the company for employees. Cost structure involves the salaries as well. About 1200 employees are working in Millhouse Construction and cost will also incur on paying salary to the employees. The revenue stream (inflow of cash) includes the aspects through which company will get income. The stream of revenue for Millhouse Construction is- revenue from construction and development projects (Brigham & Ehrhardt, 2015). Another source of revenue is from the investment. The return on the investment will be revenue for the company.
The above business canvas model could be achieved by Millhouse Construction through adopting appropriate organizational structure. By analysing the above model and the case of Millhouse construction, it the project organizational structure will be appropriate for the business. Organizational structures such as line and staff, functional and line assist in establishing and distributing authority for control and vertical coordination more willingly than horizontal relationships. The flow of work process is horizontally in some projects and it may flow diagonally, upwards and downwards also. The talent distribution, the abilities within the organization and the need of applying them with the existing problem are the aspects on which the direction of workflow is dependent (Whelan and Meaden, 2012). To cope with situations, the project organizations and matrix organizations have emerged.The project organization is termed as an organization which is designed for achieving the specific results by the use team specialist which belongs to different areas of the organization. All energies resources and results are focused on the project team for the assigned project Gibson, 2012). The team members who belong to various cross-functional departments go back to their previous position when the project gets completed or they can be assigned to a new project. The examples of the project are as follow – product development, housing complex, research and development projects, shopping complex, construction of a new plant, bridge etc.
To the project the personnel are assigned which belongs to the existing permanent organization. It is all under the direction and control of the project manager. It is specified by the project manager that what effort should be needed and when will be the work performed. The manager of concerned department executes the work through his used resources (Whelan and Meaden, 2012). The support which the project manager needs for completing his project is given by the quality control, production, engineering etc. The project managers and functional managers of the permanent organization have the authority over the project team. The services are temporarily given by the specialists and are loaned to the project manager till the project gets completed (Marbaise and Probert, 2012). Between departmental manager and a project manager conflict can arise on the topic of the issues of practising authority over team members. The authority relationships have common characteristics with the potential of informal relationships and conflicts, between the departmental project manager and project manager. It becomes more significant than the formal recommendation of authority. For the working project full and free communication is required.
Conclusion
It is vital for the business to choose correct organizational structure which matches with the business activities, policies and procedures of the company. In the case of Millhouse Construction, it can be concluded threat project organizational structure will be applicable to the business since company indulged in project related business. In addition to this, it can also be concluded that business canvas model is also crucial for the businesses to comprehend all the activities in a single model.
References
Costa, C., Panyik, E., & Buhalis, D. (2014). European Tourism Planning and Organisation Systems. Channel View Publications.
Gibson, J. (2012). Organizations: behaviour, structure, processes. New York, NY: McGraw-Hill Irwin.
Buenstorf, G. (2012). Evolution, organization and economic behavior. Cheltenham, UK: Edward Elgar.
Teater, B. (2010). An introduction to applying social work theories and methods. Maidenhead, England: McGraw-Hill/Open University Press.
Whelan, J. and Meaden, G. (2012). Business architecture. Burlington, VT: Gower Pub.
Osterwalder, A. and Pigneur, Y. (2013). Business Model Generation. New York, NY: John Wiley & Sons.
Marbaise, M. and Probert, C. (2012). The Business Model Canvas.
Kew, J., & Stredwick, J. (2016). Human Resource Management in a Business Context. Kogan Page Publishers.
O’Leary, S., Sheehan, K., & Lentz, S. (2011). Small Business Smarts. ABC-CLIO.
Brigham , E. F., & Ehrhardt, M. C. (2015). Financial Management: Theory & Practice: Theory and Practice. Cengage Publication.
Magal , S. R., & Word, J. (2011). Integrated Business Processes with ERP Systems. Wiley.
Joyce & Paquin, 2016. The triple layered business model canvas: A tool to design more sustainable business models. Journal of Cleaner Production, 135, pp.1474–1486.
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