ENTREPRENEURSHIP ESSAY

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 Table of Contents

Introduction ................................................................................................................................ 3

Business Canvas Model ............................................................................................................. 3

Analysis of Blue Skies Holdings based on Business Canvas model ......................................... 4

Customer Segmentation ......................................................................................................... 4

Sales channel .......................................................................................................................... 4

Value proposition ................................................................................................................... 5

Customer relationship ............................................................................................................ 5

Revenue System ..................................................................................................................... 5

Key resources and activities................................................................................................... 6

Cost Structure......................................................................................................................... 7

Key partners ........................................................................................................................... 7

Timmons Model with respect to Entrepreneurship .................................................................... 7

Schumpeter’s Innovation Theory with respect to Entrepreneurship.......................................... 8

Alfred Marshall’s Theory with respect to Entrepreneurship ................................................... 10

Conclusion ............................................................................................................................... 11

References ................................................................................................................................ 12

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Evaluating the business of Blue Skies Holdings by using relevant models to consider the
infrastructure, value proposition, customer (segmentation and relation), finances and sales
channel

Introduction
Entrepreneurship is a start-up business that processes own designing and running strategy to
execute the business operation. In Blue Skies, their entrepreneurial business involves the
production of freshly-cut fruit and freshly squeezed juice. They have operation and factories
in UK, Africa, Brazil, South Africa, Senegal and Ghana. In this essay, the business
proposition of Blue Skies Holdings is evaluated based on the Business Canvas model to
analyse their activities by highlighting the different elements. Moreover, other model and
theories are discussed to evaluate the business of Blue Skies.

Business Canvas Model

The Business Canvas refers to strategic management and a startup template that is a used in
entrepreneurship to develop the buildings blocks of business for improved execution. As
commented by Joyce and Paquin (2016, p.1474), business canvas involves nine essential
components that include customer segment, sales channel, relationships, value proposition,
revenue system, key resources and activities, cost structure and key partners.

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 Figure 1: Business Canvas Model

(Source: Joyce and Paquin, 2016, p.1474)

Analysis of Blue Skies Holdings based on Business Canvas model

Customer Segmentation
The Blue Skies Holdings mainly deals with B2B customer base and applied mass market
customer segmentation. The company’s customers are mainly grocery and food giants like
Sainsbury, Delhaize, ASDA, Coop and others. As mentioned by Liu et al. (2016, p. 128), in
B2B the customer base is easy to occupy as the company has to convince a single group of
organisation rather than approaching a large customer base. Thus, with B2B customer
segmentation, Blue Skies used the opportunity to face less competition to achieve its
customer base. Moreover, the B2B customer has helped the company to achieve more sales
along with providing a long-time attachment with the customers. Further, the mass market
customer segmentation helps Blues Skies to attract a wide range of potential client thus
increasing their customer base without much effort. As argued by Keinänen and Kuivalainen
(2015, p.711), B2B customers are limited and involve a long time in selling the product.
Thus, B2B customers’ results Blue Skies to lose their bargaining power as the customers are
the sole price takers.

Sales channel
The Sales Channel involves the way company uses to deliver its products to its target
customers. As mentioned by Musa (2017, p.14), direct sales channel involves sole
responsibility of the company to operate its sales. In case of Blue Skies, they are using direct
sales to deliver its products to the target customers that allow them to maintain a consistency
in the proposition of services as no intermediates are involved during sales. Moreover, using
direct sales channel allows Blue Skies to maintain their confidentiality and helps them to
develop direct feedback from the customers. As criticised by Xiao et al. (2014, p.114), the
entire burden of financial risk rests on the company. Thus, Blue Skies faces the risk of
stagnation and financial loss in case they fail to deliver their products appropriately.
Moreover, Blue Skies by direct sales also faced weakness of not enjoying their expertise in
local markets.

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Value proposition
An effective value proposition is created when the products have innovative features to
attract the target customers. In case of Blue skies, they have created vale proposition for the
customers by providing 100% natural food products. According to Covin et al. (2015, p.749),
the present food and beverage industry is opting to avail natural products as the customers
have become more health conscious. Since, its target customers are food industry giants like
Asda, Sainsbury, Delhaize, etc those propose to sell healthy food to provide better services to
their target customers to achieve profit. Thus, Blue Skies creation of value by providing
natural products helps to attract its target customers. As criticised by Stadler and Boucaut
(2015, p.52), presently the niche customers of the food industry are against the use of
artificial foods and services. Thus, Blue Skies used this opportunity in achieving value by
creating effective value proposition.

Customer relationship
The customer relationship involves the building of personal bonding with the customers. As
commented by Khodakarami and Chan (2014, p.27), a strong customer relationship helps to
achieve customer loyalty resulting in benefiting the progression of the company. In Blue
Skies, they have effectively managed customer relationship by making relationship with the
customers based on trust and fairness of services. The Blue Skies have created a community
that allows the direct interaction between the company and the clients. Moreover, they have
operational dedicated personal assistances that help them to build relationship by providing
intimate assistance to the clients in need of their services. As criticised by Choudhury and
Harrigan (2014, p.149), reduced customer relationship results to develop tension among the
clients and lower the progress of business dealings. This is because the customers remain
unsatisfied with the services and cannot trust the company for future services. However, in
case of Blue Skies that has influentially maintained prominent customer relationship to
provide positive experience to the customer, in turn, making them loyal to the company.

Revenue System
The revenue is the income earned by company from its sales and business activities. As
mentioned by Guhlich et al. (2015, p.37), higher revenue identifies that the company have
achieved profit. The profit in revenue reflects the corporate strength of the company. In 2015,
Blue Skies reported showing an increase of 13.56% than the previous year in the total assets
assumption. Moreover, the financial turnover has increased to 20.5% and net worth to
30.41% than the previous year. Further, the current liabilities of Blue Skies have also shown a

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reduction of 2.71% than the previous year (www.endole.co.uk, 2017). As asserted by Shang
(2014, p.1500), an increase in the liability dispenses risk for the company's finances. Thus,
the reduced liability has made Blue Skies in an advantageous position to secure its finances
and invest more on the development of their business. Moreover, the increase in total assets
has helped the company to use more finances for innovating the products along with updating
the company to achieve competitive advantage and expand their business.

Figure 2: Revenue Chart of Blue Skies Holdings in 2015

(Source: www.endole.co.uk, 2017)

Key resources and activities

The key resource of Blue Skies is that they provide natural food products that help to achieve
value proposition along with respecting the culture and environment during their business
operation. As mentioned by Müller and Gaus (2015, p.387), the efficient management of
services for the customer segment helps to build the company's business. In Blue Skies, they
maintain the authenticity of their products along with securing the nature and culture while
serving its customer base. Moreover, they use direct sales channel as the key resource to
directly deliver the product to potential customers by marinating confidently of the dealings.
As criticised by Trafialek et al. (2017, p.710), uncertified products lack the interest of the
customers as they fear of its authentication and ethical consideration. However, Blue Skies
have certification of BRC Food, Organic food Federation, Sedex and others that help its
customers to avail their products without fear. The key activities involved the relay of best
services to customers along with securing the environment for the future. This has led them to
achieve various awards like Private Business award 2013, The Queen’s award in 2015 and
2011, and many more.

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Cost Structure
The cost structure is the assumption by the company about its various expenses to be faced
during the business operation. In Blue Skies, they use cost-driven structure thus focussing on
minimising the cost of the products and eliminating frills. As asserted by Louf et al. (2013,
p.8824), cost driven structure helps to lower the price of the product thus making it economic
for the customers to avail. Since, Blue skies deals in food products those are daily needs of
the customers thus, the maintenance of cost-driven structure has helped in its business
upliftment. The key drivers of the cost structure for Blue Skies are raw materials, labour,
distribution charges and energy.

Key partners
In Ghana, Blue Skies has developed a non-profitable foundation to support community
projects by forming partnership with Waitrose Foundation and Albert Hejin Foundation. The
Blue skies need to rely on these partners for supporting the community as they have expertise
on the way to perform effective community services. As mentioned by Wadham and Warren
(2013, p.47), in partnership management helps to provide involvement of more innovative
ideas that influence the business operation. Thus, to successfully run their community
foundation Blue Skies has relied on its partners for better progress.

Timmons Model with respect to Entrepreneurship

In accordance with the opinion of Bae et al. (2014, p.239), Timmons model can be regarded
as pivotal role player with respect to opportunity exploration and exploitation. There are three
aspects with respect to this model. They are opportunity, resources and team.

Figure 3: Timmons Model

(Source: Drucker, 2014, p.79)

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Blue Skies have been able to improve its business performance through optimal utilisation of
opportunities available in market. As far as the opportunities are concerned, it can be said that
Blue Skiers have been able to exploit the prevalent demands amongst retailers for natural
products, as a result of which, the revenue has been increased by 13.56% in the year 2015.
The effective communication between teams and efficacious level of customer relationship
management has been proved as instrumental factor for gaining competitive advantage over
industrial rivals. Because of effective customer-focused leadership strategy organisation has
been able to increase the level of financial turnover.

The effective management of operational, financial and human resources has been helpful for
Blue Skiers in ensuring the improvement in business performance. The organisational
leadership has played important role in resource management and their optimal level of
utilisation. In addition, financial resources have been utilised through mapping out financial
strategy. Shareholders' interests have been given utmost level of interests.

As notified by Fayolle and Gailly (2015, p.90), highly skilled and adept teams in Blue Skies
have been major contributors with respect to the development of entrepreneurial success.
This is because people associated with organisations have been showing utmost level of
commitment in creating quality culture in the organisation with the objective of creating
brand value in market.

Schumpeter’s Innovation Theory with respect to Entrepreneurship

In accordance with the opinion of Kuratko (2016, p.57), innovation theory has laid emphasis
upon three factors, such as innovation (as the name of theory implies), risk taking mindset for
opportunity exploration as well as exploitation and investment on R & D activities.

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 Introduction
of New
Techniques

Improvement
in Leadership
Organisation

Entrepreneurship

Dyanamism of Development
Entrepreneurs of Resources

Exitence of
Motivated
Workforce

Figure 4: Different Aspects Schumpeter’s Innovation Theory on Entrepreneurship

(Source: Self-developed)

Blue Skies has been able to ensure the achievement of success through the utilisation of
factors specified by Schumpeter's theory of innovation with respect to entrepreneurship. Blue
Skies has been able to ensure the achievement of success in terms of business growth
potentiality through the effective implementation of leadership strategy adopted by Anthony
Pile. In accordance with the opinion Maritz and Donovan (2015, p.85), Blue Skies has been
facing a number of challenges in market, such as changing exchange rate, fluctuation in
economy, intense competition in industry and so on. The organisation has been able to make
progress in terms of expansion in new countries thereby resulting in getting exposure to new
markers as well as new production methods. Through the utilisation of innovation,
organisation has been able to bring unique selling proposition with respect to product
portfolios. As a result of which, organisation has been able to improve its business
performance as well as financial turnover. On the other hand, highly motivated workforce has
been playing instrumental role with respect to the organisational productivity in terms of
improved business performance in sales and business development.

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Alfred Marshall’s Theory with respect to Entrepreneurship
Alfred Marshall’s theory of entrepreneurship has indicated certain aspects, the existence of
which needs to be ensured for gaining competitive advantage over industrial rivals. As said
by Yadav (2017, p.53), leadership skills and thorough understanding of entrepreneurs on
industrial setting can be proved as decisive factors for ensuring growth in business in terms of
business profitability.

Leadership
Skills

Knowledge
Industry's
Knowledge Entrepreneurship on Demand
and Supply

Knowledge
on Market
RIsk
Factors

Figure 5: Alfred Marshall's Theory of Entrepreneurship

(Source: Self-developed)

As opined by Maritz and Donovan (2015, p.79), leadership and business skills of Anthony
Pile can be regarded as important factors with respect to the development of business
activities. Blue Sky has been able to improve its sales performance through the utilisation of
its sales channels. Customer relationship management has been given utmost importance
while dealing with direct sales. The knowledge on industrial setting as well as demand and
supply pattern has helped Anthony Pile in increase USP level of product portfolios. The
increasing demand for natural food products has been exploited by him as a result of which,
corporate revenue generation rate has been increased. In this way, organisation has been able
to attract a large number of business clients.

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Conclusion
From the above discussion of Business Canvas model, it is evident that Blue Skies have
implemented an influential value proposition for its products through the use of natural
ingredients in production. This has resulted in successfully attracting the B2B customer those
include Sainsbury, Asda, etc. This is because it is intimidated in the study that in the present
food and beverage industry the niche customer prefers to use healthy foods. However, they
face adversity of lacking the bargaining power due to B2B customers as they are the market
gainers. The delivery of natural products by Blue Skies has helped them to efficiently attract
its customer base by building a long-term relationship. Moreover, the increased amount of
financial resources through influential revenue system has made Blue Skies stand out in the
market to set a dominant business profile even being just an entrepreneur.

The discussion of Schumpeter's theory also supports the Timmons model findings that the
leadership quality of the management has resulted in the influenced business structure by
Blue Skies. This is evident from the wide expanse of its various production house
internationally with increased number of business opportunity. The theory intimidates that
Blue Skies innovative strategy to produce only natural products has helped them to attain
customer base along with securing health and culture among communities. This has led to the
company's success as customer satisfaction, and trust is easily built due to valuable services
that have resulted in building up high-value proposition as mentioned in the discussion of
Business canvas model. Moreover, the evaluation through Marshall's Theory also referred
that the appropriate knowledge of the industry and right assumption of the demand and
supply by the leader have driven the success of Blue Skies. However, Blue Skies have faced
challenges related to the variation in exchange rates due to different rate structure across
countries. Moreover, the economist minds set are affecting their business as in few countries
as they have to face adversities due to low economic growth that is affecting their business
growth. The lack of availability of agriculture lands in key areas of their interest to develop
business has resulted in issues as they are unable to collect enough resources required for
their production since they deals in natural food products.

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