The value proposition is largely based on the business model of the company. A business model describes the justification of how an organization generates, captures and delivers value in social, economic and other forms to the society. The process of framing and analyzing the appropriate business model is an important organization’s business strategy. In practice and theory, this term is used for a broad range of formal and informal descriptions to highlight the main and basic objectives like core competencies, vision, organizational structures, strategies, trading principles and operational policies (Helbling, et al., 2011). This report is based on the analyses of values proposition of an Australian Retail Sector organization named as Heytsbury Holdings Limited. The company is engaged in the sale of homewares, electrical goods and computers with the help of retail outlets and franchises all over the country. The company is using the franchise-based business model in which the company does not need to invest in the retail outlets. This report shows that how this business model effects in creating the value proposition for the stakeholders of the firm. Along with this, it also describes the factors which affect the value proposition in a positive or negative manner. At the end of the report, a conclusion has been drawn to overview the topics discussed in the entire study and to summarize the key findings.
Value proposition provides the understanding that why a customer should select the product and services provided by a particular organization. It provides the unique value and features of the product of its competitors.
A value proposition based on the business model provides a different and unique mixture of products and services which helps in providing value to the customer by solving the problems of the customers regarding the products and services offered. A product may have a single as well as multiple value propositions (Lange & Velamuri, 2014).
Heytsbury Holdings Ltd. is a retail sector company which is based on the franchise based business model. It is a hybrid form of the business model which enables the business owner to grow the business with the help of others by selling the right to use his brand in return of a fixed percentage of profit. In this type of model, the owner does not need to invest in the new business outlet. The person. To whom the rights are given drives the business as per his own understandings and suitability by making the investment in human and financial resources. The given organization is also following the same model because of which it does not have similarity in the business culture (Bovee & Thill, 2016). On the basis of information provided about the business model of the company, the value proposition can be described as below:
The company provides three years warranty with all the products and services. It creates a value of the customer’s money as they can get repaired the products without any extra cost. It increases the trust and faith of the customers.
The company is also bound to provide the best quality products as if it does any compromise with the quality then the same will have to be born by the company itself by the warranty services provided to the customer (Powell & Hughes, 2016).
The company works with the objective to provide services more than the value of money of customer so that they can be attached with the company for a long time.
The company is using a high level of innovative technology in its products and services. It is providing the electric household things of all sizes. The customers have facility any one of the provided information. Along with this, all the techniques are based on the scientific experienced which helps in increasing the customer satisfaction level (Doligalski, et al., 2015).
The company is providing its products in most of the cities and states of Australia. For this purpose, it is using the franchise-based business model which helps the customers to get the products at their place.
However, there is no uniformity in the functions and actions of the business due to the franchise based business model but this model also creates value for the customers. Due to this system, the owner of the franchises is able to provide offers and services as per their local target market. For example, if there is no any competitor than the products can be sold easily without providing any discounts and extra offers. But if there are a large number of competitors in a city then franchise can provide the offers accordingly. It helps in increasing the profitability of the company and customers also get benefit due to this system (Wiechoczek, 2016).
The business model opens up the opportunity to change the value architecture, revenue model and value proposition of the organization. It also serves as a chance to rethink the value system for human and thus making a business structure that employees’ value, customers love and investors excited about. The business model is based on all the managerial, ethical, social and operational activities if a business and thus it helps in creating a positive impact in the mind of the internal as well as the external stakeholders (Bovee & Thill, 2016).
Heytsbury Holdings Limited is using a franchise-based business model which can be proved effective if it is used with the motive of customer orientation and centralization. The existing business model of the organization creates its value for the stakeholders in the following ways:
The directors feel burden free by using this model as they do not have to manage the business and employees around the country. They are only concerned with their profit share. By using this model, the company also do not need to invest in the retail outlets in each and every city and state. It decreases the need for financial investment which acts as a positive aspect for making happy to the directors (Argandona, 2011).
This model also attract the employees of the management and the operations department as they do not have to coordinate a number of employees. However, because of multi-faceted culture, sometimes the employees have the face the problematic situations at the time of their transfer to any other location. But for this purpose, the company arranges training programs for the employees so they would get to know about the working cultures of the different retail outlets of the firm (Bovee & Thill, 2016).
The company creates values for the customers by providing offers and schemes as per the competition in the local market. It also creates a sense of customer welfare by the organization. The customer gets products and services at lower rates which help in framing a positive point of view of the firm. Along with this, their tendency of comparing the products and brands also decreases as per the increasing trust in the company (Keränen & Webster, 2010).
The model creates values of the suppliers by increasing the flow and purchase of raw material with an increase in the sales of the organization. It is a well-known fact that the sales of the company directly affects the sales of its suppliers also. Thus, the suppliers are also enabled to increase or decrease the prices as per their will for earning the profit (Dembek, et al., 2018).
The value proposition of the organization the collection and interpretation of the values that are to be provided to the customers with the help of current business operations and activities. Thus, it is necessary that the dimensions of the business structure, marketing, people management and financial management should support the values proposition of the organization. This support will help in increasing the effectiveness of the values proposition form customer’s as well as form the internal and external stakeholder’s point of view (Toytari, et al., 2017). The support of the above aspects and their dimensions to the value proposition can be understood as follows:
The business structure of the company is not so rigid to understand. It is directly linked with the customer satisfaction level and thus to provide value to the customers and their financial investment. The company does not have a number of levels in its hierarchy. It is directly managed by the board of directors and a management group of 20-25 managers. Thus, the flow of information in very fast and customers get the products and services without any delay. Also, the business structure of the company mainly includes making the investment in franchises instead of retail outlets. Thus, the organizational structure is in the favor of the unique business model of the firm (Kumar, 2015).
The marketing is mainly done with the help of television and press. Thus, there is no need to invest anything from the franchises to make any promotions of the product. There is uniformity in the culture of the marketing and business but there is the similarity between the products and services are offered by all units of the business. It shows that the organization is using the marketing techniques which can help in creating values for the customers by advertising the same products and services (McFarlane, 2013).
For managing the workforce in the organization, the management has introduced the upward as well as the downward communication system. This enables the employees to communicate with each other and provide better customer experience. The human resource management is one of the complex parts of the business management because all the other activities are based on it. The people management support the value proposition by allowing the franchise’s owners to business as per their own terms and culture. They are not bound to follow any specific guidelines related to the offers. This increase the chances of creating value for the customers (Mitsakis & Ixu, 2014).
A franchise-based business model is less profitable in comparison to a wholly owned business model. However, Heytsbury Holdings Limited is managing its financial resources is an effective manner by making sufficient investment in retails stores and dealing with franchise’s owners. However, the company is not earning many forms the franchises but it is not looking forward to stopping business through these channels to maintain the trust of the customers and to make available the products at their place. The financial management is not concerned with making the higher profits but it is concerned with the management of all the areas of business by providing sufficient finance at the time (Payne & Frow, 2014).
Conclusion:
On the basis of above discussion, it can be concluded that value proposition is highly based on the business model used by the organization. In the given case study, the company is using the franchise-based business model which is the main reason for its different values proposition forms the other Australian firms of the retail sector. The value proposition is also required to create value for the internal and external stakeholders as the primary responsibility of the organization is towards its stakeholders. The value for these stakeholders can be different on the basis of their interest. But their interest and organizational profitability go hand in hand. Thus, it is required to consider the value proposition form the point of view of the stakeholders. The report concludes that how the business value proposition of Heytsbury Holdings Limited creates value for its directors, customers, suppliers, and employees in a different manner. The report also concludes how the aspects of the business like structure, marketing, financial management and employee management affect the value proposition of the Heytsbury Holdings Limited. The different dimensions of these aspects affect the working of the value proposition in a positive manner in the case of the given company. The overall study has covered the value proposition with respect to the business model, stakeholder’s interest and the relationship with the different business practices of an organization. All the information is based on the research and the study of authenticated journal articles written on the basis of primary and secondary research.
References:
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