Green Elk & Company is the world s leading manufacturer of agricultural and forestry machinery. The former company slogan "Elk always runs Elk feeds the world" One of Green Elk's strategic goals is to increase its revenue in the emerging markets of China, India, and other parts of Asia by 80 % within three years. This requires a new business model that caters tosignificantly smaller farms with limited budgets You are the Chief Enterprise Architect and the CIO asks you to assess the new business model for smaller farms with smaller budgets. By applying the Sustainable Business Model Canvas, which sequence of steps is best practice?
Correct Answer: C
Explanation
According to the Sustainable Business Model Canvas, which is a tool that helps entrepreneurs to design and communicate their business models in a sustainable way, the recommended sequence of steps is:
Assess and define the value propositions for the small size farms customer segment. This step involves defining and describing the products or services that Green Elk & Company offers to its target customers, and how they create value for them. The value propositions should address the needs, problems, or desires of the customers, and highlight the benefits or advantages of Green Elk & Company's solutions over the alternatives.
Detail the customer relationships and channels. This step involves defining and describing how Green Elk & Company interacts with its customers, and how it reaches and delivers its products or services to them. The customer relationships should reflect the type and level of engagement that Green Elk & Company wants to establish and maintain with its customers, such as self-service, personal assistance, or community. The channels should reflect the most effective and efficient ways to communicate and distribute Green Elk & Company's value propositions to its customers, such as online platforms, physical stores, or partners.
Identify relevant key activities, key resources, and partners. This step involves identifying and describing the main activities, resources, and partners that Green Elk & Company needs to perform and leverage to create and deliver its value propositions to its customers. The key activities should reflect the most important tasks or processes that Green Elk & Company undertakes to execute its business model, such as production, marketing, or sales. The key resources should reflect the most essential assets or inputs that Green Elk & Company requires to execute its business model, such as human, physical, financial, or intellectual resources. The key partners should reflect the most strategic relationships or collaborations that Green Elk & Company establishes with other entities to execute its business model, such as suppliers, distributors, or competitors.
Define the revenue streams and cost structure. This step involves defining and describing how Green Elk & Company generates income from its customers, and how much it spends to execute its business model. The revenue streams should reflect the sources and mechanisms of income that Green Elk & Company obtains from selling its products or services to its customers, such as sales, subscriptions, or fees. The cost structure should reflect the types and amounts of expenses that Green Elk & Company incurs to execute its business model, such as fixed costs, variable costs, or economies of scale.
Define the eco-social benefits and costs. This step involves defining and describing how Green Elk & Company contributes to or affects the environment and society through its business model. The eco-social benefits should reflect the positive impacts or externalities that Green Elk & Company creates for the environment and society through its products or services, such as reducing emissions, improving health, or enhancing education. The eco-social costs should reflect the negative impacts or externalities that Green Elk & Company causes for the environment and society through its products or services, such as increasing waste, depleting resources, or harming biodiversity.
The other options (A, B, D) are not correct for the sequence of steps to apply the Sustainable Business Model Canvas, because they either skip or misrepresent some of the steps in this tool. For example:
Option A is not correct because it does not include assessing and defining the value propositions for the small size farms customer segment, which is a crucial step to understand and communicate how Green Elk & Company creates value for its customers. It also suggests defining the cost structure and revenue streams before defining the customer segments and value propositions, which is not a logical order since the latter determine the former.
Option B is not correct because it does not include identifying relevant key activities, key resources, and partners, which are important aspects of executing a business model. It also suggests retrieving the documentation for the solutions that need to be integrated instead of assessing and defining the value propositions for the small size farms customer segment, which is not relevant for designing a new business model.
Option D is not correct because it suggests assessing and defining the eco-social costs and benefits before defining the customer segments and value propositions, which is not a logical order since the latter determine the former. It also does not include detailing the customer relationships and channels, which are important aspects of delivering value to customers.
For more information on the Sustainable Business Model Canvas and its steps, you can refer to The Sustainable Business Canvas or Sustainable Business Model Canvas: A Review And Framework Development.
