Answer To: pls note that pls suggest me one innovative company last five six yr old bcz i need aproval from my...
Akansha answered on Jul 31 2020
Running head: Organization’s business model
Organization’s business model
Think Big
Student Name
University Name
Unit Name
Unit Code
Executive summary
Afterpay company provide payment services and offers a good platform for the payment of their goods, including shoes, apparel, watches, personal care, automotive parts, sports, foods, and other products. This report provides description of AfterPay, market AfterPay serves, and services AfterPay provides. Business model canvas of AfterPay using nine building blocks and the interrelationships that exist in building blocks is also discussed in this report. Finally, the CSF Afterpay has to get right to attain sustainable success, downside risk and the changes make to the business model is also discussed in this report.
Contents
Executive summary 2
I. Introduction 4
II. Business model 4
A. Building blocks 5
Key partners: Local stores and financial partners. 5
Value Propostion: Tie-ups with existing supermarkets and vechicle showrooms, no warehouses and extremly quick services. 5
B. Key relationships that exist across the nine building blocks 6
C. Critical success factors 6
D. Downside risks 7
E. Business model changes 8
III. Conclusion 9
IV. Recommendations 9
Appendix 1 – Afterpay Business Model Canvas 10
References 11
I. Introduction
Afterpay is an Australian financial technology company operating in Australia, New Zealand and the United States. It allows retailers to offer their customers to purchase now and pay later, without the need for traditional credit, upfront fees or interest. Merchants offer Afterpay online or at the store (Dutta, 2017). The customer pays Afterpay a quarter of the purchase amount, and the post payment pays the merchant's prepayment. The customer pays the remaining items in installments every four weeks. If the customer pays on time, they only pay for the purchase price.
II. Business model
AfterPay allows its consumers to “buy instant” money to buy and use business models that have existed for the eras. It is named the “factoring” of the accounts receivable. This is an organization that sells its accounts receivable (the capital owed by goods or services already sent) to the lender, usually at a discounted price (Bond, Bugeja & Czernkowski, 2012). Usually, the factoring is arranged between the business and the lender, and the customer does not know the plan. Afterpay's revolution is to transform this century-old back-office monetary arrangement into a customer-oriented approach. In year 2016-17, the Afterpay received around $23 million from the retailers, in addition, $6.1 million in the late charges. It only wrote off $3.3 million in the bad debts. An illustration of a conventional factoring is company that sells $100 in receivables to the lender for $95 (Christensen, Kent & Stewart, 2012).
A. Building blocks
Customer segments: Afterpay has an application from where customers can order products by choosing several stores. They will even order from laptop using web based interface.
Key partners: Local stores and financial partners.
Value Propostion: Tie-ups with existing supermarkets and vechicle showrooms, no warehouses and extremly quick services.
Key activities: Pay for customers purchase over four equal installments, due every two weeks. Allows customers to pay over time.
Channels: Afterpay website, mobile application, for all android phones and iOS phones.
Revenue streams: In FY18, the underlying sales processed through the Afterpay platform totaled more than $2.18 billion (an increase of 289% over FY2017). The basic sales of FY18 in the fourth quarter was approximately $736 million, an increase of 171% from the fourth quarter of fiscal 2017 and a 39% increase from the eighth quarter. Since its inception, there are currently approximately 16,500 retailers and approximately 2.2 million customers living and trading on the Afterpay platform.
Cost structure: Technological setup costs and salaries to permanent employees of Afterpay. Afterpay also provide commision based payments to shoppers.
Key resources: Afterpay has partnership with too many local stores and fast as well as skillful shoppers, and technology is also a key resource of Afterpay.
Customer relationship: With the help of social media such as Facebook, twitter and Snapchat Afterpay attract more and more customers towards itself.
B. Key relationships that exist across the nine building...