BIANCO. ______________________________________

BizzProjectReport

Group14: Anna-SofiaEve/BrandingandMarketingManagement(238314)

ElindeLeeuw/RetaildesignandManagement(237481) MinchoMinev/BrandingandMarketingManagement(237552)

TamaraMellineVandeGraaf/FashionDesign(237541) TerezaProchazkova/BrandingandMarketingManagement(237544)

VIA University College – TEKO Business + Design

Herning 15.01.2016

Visual Business Model Group 14

2

TableofContentsAbstract...............................................................................................................................................3Introduction......................................................................................................................................3Problemstatement.........................................................................................................................4Researchquestions.........................................................................................................................4Methodology......................................................................................................................................5History.................................................................................................................................................6BusinessModelCanvas..................................................................................................................8CustomerSegments........................................................................................................................8ValueProposition............................................................................................................................8Channels.............................................................................................................................................9Customerrelationship................................................................................................................10Revenuestreams..........................................................................................................................10KeyActivities.................................................................................................................................11KeyResources................................................................................................................................11CostStructure................................................................................................................................12SWOTanalysis...............................................................................................................................14BusinessTrends............................................................................................................................15Calculation......................................................................................................................................17Forecast............................................................................................................................................19Recommendations.......................................................................................................................22Conclusion.......................................................................................................................................23Bibliography...................................................................................................................................24Appendix.........................................................................................................................................25 Word count: 5 823 Character count (without spaces): 29 677

Visual Business Model Group 14

3

AbstractThisreportismeanttocollectinformationabouttheBiancoDenmarkA/S,gatherdata,andunderstandthebusinessmodelofthecompany,itscurrentmarketposition,industrytendenciesandfuturestrategies. Withtheinformationcollectedduringthecompanyvisit,booksandonlinesourcesithasbeenpossibletofindasolutionfortheproblemstatement. Researchquestionsweredefinedinordertogiveabetterunderstandingandfocusonkeyaspectsofthebusinessmodel. ThisreportfocusesonthelogisticsandproductionelementsofBiancoDenmarkA/S,andleavesoutaspectssuchasdesign,constructionofthegarmentsandproperties. Leavingouttheproductdevelopmentaspects,affectstheknowledgeaboutthefunctionandabilityofthegarments,butgivesmorefocustothestructureofthecompany,whichisconsideredasthekeytosuccess. ThelackoffinancialdataregardinglandsandbuildingshasmadeitimpossibletoincludethisratherimportantaspectofBiancoA/S’sbusinessmodel. Thetimeframeislimitedfrom2010untilprojectionsin2015/16. IntroductionBiancoDenmarkA/Sisafashionshoecompany. ThepurposeofthisreportistoapplytheBusinessModelCanvastotheshoebrandBianco,tofindoutthebusinessmodelofthecompanyandtoproposeanimprovementstrategyifneeded. ProductsarelocallydesignedinDenmark,butmanufacturingtakesplaceabroad.DanishfashionbrandBiancoiswellknownintheshoe’sfashionindustryasproviderofpremiumproductsandgooddesign.RenePiperLaursenfoundedBiancoin1987.In1992Biancoregistersitsnewbrandnames,BiancoManandBiancoFootwearinsteadofBiancoSko.Biancostartedofasafranchiseandtheykeptthatconceptthroughtheyears.WhatmakesBiancouniqueisthattheyworkcloselywithartistsanddesigners.Theyhave90storesindifferentcountrieslikeDenmark,Norway,SwedenandGermany. WhilethecorporatemissionatBiancoisbasedonunchangingvalues,theIT-servicessupportingthatmissionadaptstotheever-changingbusinessclimate.Therelevanceofthisstudyistoapplydifferentmodelsinordertounderstandacompany’sstructure.TheBusinessModelCanvasisthecenterofthecompanyanalysis,becauseitprovidesanoverviewofcommonknowledgeofindustry,company,trends,financialcrisis,supply,managementandvalues.ThegoalofthisprojectistoanalyseBianco’sbusinessmodelandcompareBiancowithitscompetitors,andtheindustry,inordertobeabletooffersuggestionsforimprovement.Intheendofthisanalysispropositionsforimprovementaremade,andputintoanewBusinessModelCanvasmodeltoprovideabetteroverviewoftherecommendations.

Visual Business Model Group 14

4

ProblemstatementThepurposeofthisstudyistoanalysethebusinessmodelofBiancoA/S,thisbeingabletoofferrecommendationstoimprovementstotheircurrentbusinessmodel.ThroughabroaderanalysistheaimistofindareasinBianco’sbusinessmodelwheretheycouldimprove,andholdanexternalpointofview.Hereaftertheintentionistoofferpotentialsolutions. Thus,theproblemstatementofthisthesis: WhatisBianco’scurrentbusinessmodelandwhatcanbedonetomakeitmoreefficient?

Researchquestions1. "What is the current Market Position of Bianco A/S?" The Market Position reveals how efficient and well-functioning a business is. 2. "How is Bianco A/S different from their competitors?" There are other players on the European workwear market, but Bianco A/S is award winning and successful. 3. ‘’Could Bianco A/S improve their production and supply chain ?" The geographical and cultural aspect of production is in a constant movement, and deciding where to place a factory, involves many aspects. 4. "What are the future strategies of Bianco A/S?" The workwear market is in constant movement, and so should Bianco A/S be, to keep growing.

Visual Business Model Group 14

5

MethodologyThepurposeoftheprojectistounderstandthebusinessstrategies,differentbusinessmethodsandtoanalysetheshoecompanyBiancobyusingdistinctivebusinessmodels.TheseanalysesdrawconclusionsandgivesrecommendationstoBiancoA/S,onhowtoimprovetheirstrategyandhowtomaketheircompanymoreprofitable.Deepresearch,criticalapproachandactualdata,reachedfromvarietyofdirectandindirectsources,makethisreportaninformativesource,foronewhoisnotapartofthecompany.ModelswhichwillbeusedinthisreportareBMC,SWOTandBusinessTrendsanalysis. BusinessModelCanvasBMC,TheBusinessModelCanvas,isananalyticaltooltocompany’sstrategicmanagementandmarketingplan.Itincludesdescribesofnineblocksofbusinessmodel,suchascustomersegments,customerrelationship,channels,valueproposition,keyactivities,keyresources,keypartners,coststructureandrevenuestreams.ThisBMCmodelisthemainbusinessmodelinthisBiancobusinessmodelreport.Abusinessmodeldescribestherationaleofhowandorganizationcreates,delivers,andcapturesavalueandthat’shelpsustounderstandthecompany’smainsegmentsandbusinessmodel. SwotAnothertoolweareusingisaSWOTanalysis.Thisanalysishelpsthecompanytofocusontheirstrengths,minimizethreats,takethegreatestpossibleadvantageofopportunitiesavailabletothemandtobeawareofthreats.Andifthecompany'spositionisessentiallyhealthyorunhealthy.Incompanystrategymakingeffortsmustaimatproducingagoodfitbetweencompany’sresourcecapability(strengthandweaknesses)anditsexternalsituation,(opportunitiesandthreats).ThevalueofmakingthisSWOTanalysisisinspecifyingwhatstorythefourliststellaboutthecompany,itsenvironmentalsituationandwhatactionsareneeded.Theanalysisanswersthequestionslike;“whatisthecompany’sstoryandwhatactionsareneeded?Arethereresourcegapsthatneedstobefilled?Whatfactorsareimportantnowandinthefuture?Whatnewtypesofcapabilitiescompanyneedstoachieve?” BusinessTrends Thethirdtoolthatweareusingisfindingcompanynewbusinesstrends. Businesstrendsisseparatedinfoursectors,financialtrends,markettrends,industrytrendsandtechnologicaltrends.Analysingtrendsrequireslookingintothestatisticalanalysisofhistoricaldataduringaspecifictimeperiodandgraphingthemovement.Trendsprovideavisionofthedirectionanindustryorbusinessisheadingin.Financialtrendsarethosethatareusuallythekeyconcernofbusinesses.Informationregardingrevenueincreases/decreases,expenses,marginsandprofitsarethevitalpointstomostcompanies. OtheranalysisBiancocoulduseFurthermore,BiancocoulduseAnsoff’sMatrixtool,thathelpsthebusinessdecidetheirproductandmarketgrowthstrategyandthegrowthpriorities.TheMatrixtoolincludesfourmaincategories:productdevelopment,diversification,marketdevelopmentandmarketpenetration.

Visual Business Model Group 14

6

BiancocouldalsousePESTanalysis.Itisasystematicapproachtoidentifyingthefactorslikelytoinfluencethecompetitiveconditionswithintheindustry.Itincludesthepolitical,social,economicandtechnologicalelements.BiancocouldalsouseNPR(NetProfitRatio)analysis,itisapercentageofthesalespriceturnedintoprofit.OrATRmeasuresthecompany’sefficiency,onhowitusesassetstogenerateturnover. HistoryBiancowasfoundedin1987byRenePiperLaurseninDenmark.In1992BiancoregistersitsnewbrandnamesBiancoManandinsteadofBiancoSkothenameofthebrandbecameBiancofootwear.Fouryearslaterin1996BiancoFootwearbecameacountrywidechainandthefirstnationaladvertisingtookplace.In1997BiancoFootwearopensashopinOslo,Norwaywithmoretofollow.In1999thereisatotalof64shops.43inDenmarkand21inNorway.TherealsoopensashopinPolandandtwoinSweden.In2006BiancoFootweardecidedtolaunchanaccessorieslinecalledBiancoGear.FiveyearslaterBiancoFootwearchangedtheirnameintoBianco.In2014Biancostartedlaunchingartiststakeovers.Aconceptthatappearstwiceayear.

Visual Business Model Group 14

7

Visual Business Model Group 14

8

BusinessModelCanvas Fig.1appendix–BusinessModelCanvas CustomerSegmentsBiancofootweardesignsshoesforbothwomenandmen,buttheirmainfocusisonwomenwhoarelivinginacultureofbigcitieswithabusylifestyle. TheprimarytargetgroupofBiancofootwearisMs.Bianco.Thiswomanisbetween18and28yearsold.Sheisanearlyadopteroffashionandasyouwouldexpectherfocusisonfashion&trends.BecausetherearenotalotofwomanwhocannameherselfMs.Bianco,thistargetgroupistoosmalltoactuallykeepthisbrandalive,thecompanyhasasecondarytargetgroup. ThesecondarytargetgroupofBiancohasawiderrange.Theyreachmorepeople,andbecausethatisexactlywhattheywantto,youcansaytheirsecondarytargetgroupisforwhoBiancoisactuallydesigning.Thisgroupofwomenisbetween15and44yearsold,isfashionoriented,andhaveearlyandlatemajorityregardingfashion&trends. Todefinethecustomersegment,Biancoisinspiredofdesigningtheirshoesby4moods.ThefirstmoodisMs.Biancowhichis,asmentionedbefore,asmallgroupofpeoplethathavefashionfollowers(secondarytarget)whoareinspiredbyMs.Biancoandadopttheirstyle.Thesmallgroupcanbeforexamplebloggers.Thismoodiscool,fashionableandfeminine. Theother3moodsareEverydayshoes(youngpeopleandcomfortablestyle),Feminineoutdoor(fashionablefeminineoutdoorshoesforeachweathertype)andFeminineclassics(officegirl,notsensitivefortrends). Exceptshoes,Biancofootwearalsosellaccessoriesandfootwearcareproducts,whichmaketheircompanycompleteforthecustomer. Thecompanyiswellawareofthecustomer’srequirementwhicharehighqualityforagoodpriceandfashionableshoesThatmeansthattheconsumerstrivesfortrendyshoesthatwilllastforalongerperiodoftimeandareavailableforagoodprice. ValuePropositionAllsegmentsandproductsofBiancohaveincommonthattheirvalueisfashionable,andmadeofhighquality.Theyaimtosupplyaweeklysmallcollectiontotheirfranchiseshops. Bianco’shighskilledcraftsmanshipandsuppliersistheresultoflongtermrelationshipsbetweencompanyandmanufacturers.Biancoisusingacodeofconductwhichprotectstheproductsnotonlyofchildlabourandbadcircumstancesforemployees,alsoeco-friendlyproductsbecameimportant. Inordertoachievegoodqualityshoesthatcanlastlongerthanjustoneseason,thecompanyuseshighqualitymaterialssuchasleather.Tokeepthepricelow,theycan’t

Visual Business Model Group 14

9

affordittouseleatherofcrocodilesorsimilar,soBiancoisusingleatherofcheaperanimalsascows.StillBiancocanensuregoodqualitywhichcanlastlongerthanaseason,foranaffordableprice. Toensuretheshoescanlastlongerthanjustoneseason,Biancocooperatewithanothermanufacturerwhomakeshoecareproductsforthem. Bydesigningthe4differentmoods,Biancoistryingtokeeptheircustomersclosetothem.ThecustomercanbeloyaltoBianco,regardlesswhichmoodtheyarelookingfor. ChannelsBiancoA/Shastwokindsofcustomers,forwhomtheyhavedifferentchannels.Firstlytheyhavetheprivateconsumersascustomers.Biancohasanownedanddirectchanneltothesecustomersthroughtheironlineshop.Heretheyselltheirshoes,andprovidecustomersthechancetogethelpthroughcustomerservice.Furthermore,theyshipthepurchaseforfreefig.2appendix.Theyworkcloseinaclosedcooperationwithdistributors.BiancosellsB2BandB2C.

BiancoareactiveonthesocialmediasitesFacebookandInstagram;(Pinterest,Twitter,Youtube).Basedonthefollowersonsocialmedia,wecanseethattheyhavealotoffollowers.Alsotheirwebshopsaleisgrowing,andbecauseoftheirwholesaleatwebshopsnelly,sellstheirproductsinotheronlinemulti-brandstores,suchas:Zalandoandboosttheyareeasiertoreach. Throughthesemeanstheygivethecustomeranopportunitytoevaluatetheproduct,andmakethecustomerfeellikeapartofthebrand.Anotherchanneltoreachcustomersisbyadvertising. Biancopainstakinglyresearchtheirdifferentchannelalternativesavailabletodistributetheirproducts.Thegreaternumberofdistributionchannels,thegreaterthecompany’sreachintothemarket:onlinestores,shops,socialmedia(Facebook,Instagram)campaigns,theyhaveclubmembership,thatucangetnewsletter,invitationstotheevents(inspirationstothenewesttrends,invitationsforVIPevents,exclusiveoffersanddiscounts)online-store(theydelivertoDenmarkBianco.dk(exceptGreenlandandFaroeIslands),SwedenBianco.se,NorwayBianco.no,Finland-Bianco.fijaGermanyBianco.de.)shoe,(Denmark,Germany,Egypt,Iceland,Norway,Sweden) Theonlineshopworksthebest.Youdon’thavetopayrentofshops,whichischeaperandinthesametimeyoucanreachmorepeoplebecausetheydon’thavetotraveltotheshop.Normalshopisthemostcostefficient,butinthefutureBiancohopesthattheywillgrowonline.Timeisoneofthemostimportantthingsinlife.Becauseofusingalotofonlinesaleswetrytofitinthedailybusyscheduleofourcustomers. Thebrandhastoprefertoestablishpartnershipswithcertainonlineretailersandfindalong-termrelationshipbusinessapproach.SuchcollaborationstartseitherfromBiancoCompanyorfromtheretailers.Biancohastostartchoosingtheirretailersbytakinginconsiderationtheirreputationandinternationallocationsinordertocreateawidernetworkandtoexpandinothercountries.Asanexample,ScandinaviaandEuropeisnowatargettothecompany’sexpansion.ThebrandisplanningtoexpandinotherEuropeancountries.

Visual Business Model Group 14

10

Thedistributiontothepointofsaleismadefromthecompanylocation,inKolding,Denmark. CustomerrelationshipThegrowingdiffusionofproductsandcompetitorsmeansthatthereisnotashortageofproducts;thereisashortageofcustomers.Thismakesthecustomerking.Themostimportantcustomerasmentionedbeforeis“Ms.Bianco”.Biancoisafashionbrandsotheyaremainlyfocusedoncustomerswhoarepassionateaboutfashionandthecurrentandupcomingtrends.TheyarecreatingvalueforMs.Biancowhoisayoungwomanbetweentheageof18and28.Ms.Biancoishighlyfocusedonfashionandfollowingthecurrenttrends. Sheistheirprimarytargetandtheirambition.Thesecondarytargetgroupisfashion-orientedwomenfromtheageof15until44. BiancohavefocusedontheproblemofattractingnewcustomersfromallScandinaviaandEurope.ThesalesdepartmentsofBiancowererewardedmoreforfindinganewcustomerthanforpayingattentiontoexistingcustomers.Nowthecompaniesarepayingmoreattentiontotheartofkeepingcustomers. So,beforeBiancostartstoworryaboutacquiringnewcustomers,itmustdevelopastrategytosatisfyitsexistingcustomers.Thekeyistocontinuouslyinventnewbenefitsforloyalcustomers;thesemighttaketheformofdiscounts,specialinvitations,specialservicesorspecialmembership.Sotheymakestrategywithusingmembership,newslettersandsocialmediaforthatreason.‘’MyBianco’’isaspecialclubforcustomers.Theyhavepre-sale,events,andnewslettersifyouareamember.Biancoisalsousingsocialmediatobuildcustomerrelationships.Beforetheco-operationwiththebloggers,theyhad‘Fashionarmy.’Theyareinvitingallcustomerstoshopandinvolvethemtotheircampaignsandmarketing. Themajorchallengetodayisgettingpeople’sattention.Consumersarepressedbytime,andthebrandBiancoworkhardtoavoidadvertisingmessages.Themainchallengeistofindnewwaystocaptureattentionandpositionabrandintheconsumer's’mind.PublicrelationsandwordofmouthmarketingareplayingagrowingrolewithinthemarketingmixtobuildandmaintainbrandasBianco.

RevenuestreamsBiancoA/Shasdifferentkindsofrevenuestreams,onebeingfromtheretailstoreswheretheproductscanbebought,thecustomerscanpayeitherwithcashorcreditcards.Intoday’sglobalsociety,onlineshoppingisanecessity.Bianco'sgarmentsareavailableontheofficialwebsite,wherethepaymentispossiblewithindividualbankcards(VISA,MasterCard,DKK).Theirgarmentsarealsoavailableonsomeoftheretailer’swebsites.Inorderofbeingeligibleforfastdeliverytobothonlinecustomersandtheretailers,Biancoareexpandingtheirstockfacilities.Theyarefocusingonkeepingabroaderselectionofstock,makingsurethatthepreviouslyproduceddesignsalsoareavailable.Thisincasetheygetaspecialconsumerrequest.

Visual Business Model Group 14

11

KeyActivitiesInordertomaintainafirm’sstabilityandcompetitivenessinthemarket,thefirmmustperformcoreactivitiesthatareknownasKeyActivities.BecauseofBiancohaslongtermrelationshipswiththeirmanufacturers,theycancontroltheirproductionprocess.Bianco’smanufactureinAsiaaswellasinEurope.BothAsiaasEuropeareawareofBianco’scodeofconduct.TobemorespecificaboutAsiancountries,itisespeciallyChina,VietnamandIndiawhereBiancoproducetheirshoes.ForEuropeitisPortugal,SpainandRomania.With1collectionamonth(onlypresenting4timesayear)Biancokeeptheircompanyandrelationshipwithsuppliersactive.Supply-managementandSales-managementisthemainkeyactivitiesofBianco. KeyResourcesKeyresourcesaretheresourcesthatarenecessarytocreatevaluetothecustomer.Theyareconsideredanassettothecompany,whichareneededinordertosustainandsupportthebusiness.Theseresourcesaredividedintohuman,financial,physicalandintellectual. ForBianco,humanresourcesarebasedontheemployeesaswellasthefranchiseessincefranchisingisaveryimportantvalueofthiscompany.Franchisesshouldberesponsibleforthemselves,theychoosewhichshoesfromthecollectiontheywanttosellintheshopsandtheyalsodecidewhichstyleshouldtheshopshavealthoughtheyusuallysticktoBianco’soriginalmerchandise. Biancodependsontheexperiencesandabilitiesofitsemployees.Veryimportanthumanresourceisfoundinthemarketingdepartmentwhereallthecompany’spromotionbegins,thecampaignsthemselvesarecreatedwiththehelpofanadvertisingcompany.Biancoalsohasitsowntrainingcentre,whichtheycalla“BiancoUniversity”.Thisisaplacewheretheemployeesareabletogetaprofessionaltrainingandbringmorevaluestothecompany.Thesalesassistantsaretrainedtobepoliteandfriendlytothecustomers.Sincethetargetgroup;MissBiancoisayoungwoman,thesalesassistantsshouldbelikefriendstothecustomersandgivethemadvicesonwhichshoeswouldsuitthecustomerthemost. PhysicalresourcesofBiancoarefoundmostlyintheproduction,whichtakesplaceindifferentcountriesinAsiaandEuropesuchasChina,India,Vietnam,RomaniaandPortugal.SmallpartoftheproductionisalsofoundinItalyandSpain.Theplaceoftheproductiondependsontheneeds,availabilityandalsothespecializationofthemanufacturersinceBiancoissellingmanydifferenttypesoffootwear. Threeyearsago,afterthecrisishitthecompany,Biancodecidedtofocusontherightsupplierssotheynarroweddownthemanufacturers.Oneoftheimportantvaluesintheproductionprocessistocompletelybanchildlabor. TheintellectualresourcesofBiancoiscentralizedinitsheadquartersinKoldingwhereallthemarketing,purchasingemployeesandthedesignerswork.Biancohasalmost30yearsofexperienceandknowledgeinthefootwearindustry.Thereforethecompanyhasanestablishednetworkwithinthefieldaswellasreliablepartnershipswithwholesalersandsuppliers.

Visual Business Model Group 14

12

CostStructureThecompany’sprincipalactivitiesconsistindesigninganddevelopingshoesandaccessoriesofhighfashion.Theproductsaremarketedandsoldthroughfranchisedbusinesses,Bianco’sownshopsandthroughonlinesale.BiancoisstronglypositionedinDenmark,Norway,SwedenandIceland.ApartfromNordiccountries-wherethegroupisleading,BiancoisalsoestablishedontheGermanmarket. In2014thecompany’sprofitbeforetaximprovedbyDKK56.7millionandisrealizedwithDKK-5.8million.Comparedtothelastyear’snegativeresultofDKK-62.5millionbeforetaxitisahugeimprovement,althoughthecompanyitselfdoesn’tfindthisimprovementfullysatisfactory. Biancohastwodifferenttypesofcost:capitalandoperating.Capitalcostsconsistofone-timeexpensesonthepurchaseofland/buildings,constructionandequipmentusedittheproductionofgoods.Biancodoesn’townanymanufactoriesandinthelast5yearsdidn’tpurchaseanyland/buildings. OperatingcostsofBiancoconsistofenergy,labourpayment,othercompany’sserviceslikeaccountingetc,materials,advertisingandmaintenance.Thesecostsarenecessaryforeverydayoperationofthecompany.Operatingcostsaredividedintofixedandvariable.Thefixedcostsarethosewhicharenotindependentofthecompany’sincomes.Thepaymentsconsistofrent,staffcosts,utilitiesandinsurance.Staffcostsincludewagesandsalaries,includingcompensatedabsenceandpensions,aswellasothersocialsecuritycontributionsetc.madetotheentity‘semployees.Rentincludesthecompany’sheadquartersinKolding,theirown;non-franchisestoresandwarehouses.Variablecostsdependoncompany’sproductionvolume;thematerials,deliverycostsetc.

Visual Business Model Group 14

13

Visual Business Model Group 14

14

SWOTanalysis Strength -Well-knowninScandinavia -Goodonlinestore -Qualityoftheproductsandmaterials -Collaborations,artisttakeover,andusingbloggers -Pricethatprovidesgoodqualityshoes,butwithreasonableprice -Strongvalues(codeofconduct) -Sellingto:Business-to-businessandalsobusiness-to-customer -Sellingafashionlifestyle,providingproductsthatreallypassionatelyemphasisesthelifestylethebrandpromotes,whichautomaticallyconvincesthecustomertobuytheproducts. -Shoe-carecompany(collaboration),whichhelpsthecustomermaintainthequalityoftheshoesandmakethemlastlonger

Weaknesses -TheBiancobrandisnotfashionableenough,soitdoesnotreachtotheirtargetgroupwellenough -Lackofadvertisingawareness -Lackofbrandawareness -Lackofcontroloftheproduction

Opportunity -LeadingshoecompanyinScandinavia,maybeinfutureinEurope -Buildcustomerloyalty -Marketingmoreinsocialmedias -Marketingmoretheartisttakeover -Marketingmoretheartisttakeover -Findingmoredesignersandbloggersclosertothetargetgroup,goodwayofthemtopromotethebrandtothetargetgroups -Createthebetterbrandimageforcustomers -Productdevelopment(morefashionableshoesforthetargetgroup)

Threat -Competitors,(forexample:Zara,Aldo,Bestseller) -Qualitycansufferwhatcomestobeingafashionbrandand“fastfashion”brand -Franchisingcompaniesmaybedon’tfollowotherstores,canbringdownthebrandidentity

Visual Business Model Group 14

15

BusinessTrendsBusinesstrendsareseparatedinfoursectors,financialtrends,markettrends,industrytrendsandtechnologicaltrends.Analysingtrendsrequireslookingintothestatisticalanalysisofhistoricaldataduringaspecifictimeperiodandgraphingthemovement.Trendsprovideavisionofthedirectionanindustryorbusinessisheadingin.Financialtrendsarethosethatareusuallythekeyconcernofbusinesses.Informationregardingrevenueincreases/decreases,expenses,marginsandprofitsarethevitalpointstomostcompanies.

’’MyBianco’’isaspecialclubforcustomers. Mostloyaltyprogramsoperateusingapointsystem.Customersbuyproducts,andthentheyearnpointsfortheirpurchasesthatcanlaterberedeemedforperksandfreebies. Biancocanhaveamorefashionableapproachtotheirloyaltyprogram.Theycanlettheirmembersearnpointswhenevertheyattendtheirfashionevents,andmore.‘’Youwanttobecomemorefashionable–attendourfashioneventsandearnmorepoints/discountsonourcollections’’ Thiswaytheyencouragetheircustomerstolookmoretrendyandthereforemakemoreuseoftheproductsthattheyhave.Whenthelifeoftheproduct(ex.:highheels)endstheycomebacktothestoretobuyanewone.TheyareconstantlymotivatedtocomebacktotheBiancoshopbecauseofthediscounttheywouldgetinexchangefortheirsportingactivities.TheywouldalsofeelthatBiancoasabrandisagoodmotivationalpartnerfortheirlifestyleshoes,ergothestorewillearnpsychologicalvalue. Apps ToimprovethebusinessofBiancomoreinthefuturetheycanusethetrend‘riseofdigital’.Thecompanycanactuallyimprovetodesignandlaunchanappmadeforsmartphones.ThetargetofBiancoarewellknownwithsmartphones,andyouwillbuildonyourcustomerrelationshiptomakeiteasierforthemtosearchoninformationaboutBianco,aswellasonlineshopping.

Bianconeedstopermanentlyexpanditstechnologicalborders. Snapchatisaveryusefultrendtoday,itstartedin2014tocuratewhatitwasfirstcalledOurStoryandisnowin2015calledLiveStories.Theformatisanamalgamationofsnaps,submittedmostlybyusersandassembledbySnapchatstaff.Thestitched-togetherphotosandvideos—amessy,shakycameraversionoflivetweeting—holdstruestorytellingpotential. AnewwayforBiancotouseSnapchatchannelor“story”isfromthestaffworkinginBianco.Thecustomerwillbeabletofollowonlinewhat'sgoingonliveintheshop,inanewandinteractiveway,whichwouldbeaprettygoodandinnovatePRstrategy.Theideaistogivethecustomersaninsighttowhatishappeninginthe“backstage”oftheshop,coveringtheconversationsfromtheshopstaffdoingthenewstockingordoingtheretailingoftheshop,andshowingthenewarrivalsdoingtheshortvideosandimagesviasnapchattingvideosorimages.

Visual Business Model Group 14

16

Bloggers-Promotingchannels Biancoisusingcustomerdemandasabusinesstrendforacoupleofyearsnow.Since2014theyhavecollectionespecially‘designed’byfamousScandinavianbloggers.ThebloggersandthedesignersofBiancoareworkingtogethertocreatetheirowncollection.Forcampaignsandlaunchingthebloggerwillbethefaceofthecollection.Theyalsoneedtowriteablogaboutittogetmoreattention. Improvetheirproductionandsupplychain.Onebigbusinesstrendmodelistoimprovetheproductionandsupplychain.ThatwayBiancocouldchangetheproductionfromAsiatoEuropeintocountrieslikeRomania,Turkey,Estonia,orHungary.Thosecountrieshavelow-costmanufacturing,butproductionvaluesarebetterandeasiertocontrolthanofthoseinAsia.ThereishoweveranegativestigmawhenitcomestothediscussionofmanufacturinginAsia,andhowthefactoriestherearenotworkingthatwellinthesenseofvalueconducts.

OtherreasontochangetheproducingintoEuropearegeographicalandfinancial.Forexamplemanufacturingclosertotheheadquartersmakesiteasiertocontrolproductionandworkingconditionsaswellasitlowersthecostsintransportationfeeswhichisalsogoodfortheenvironment.

Visual Business Model Group 14

17

CalculationThereportsofthepastyears(2010-2014)cantellwhatBiancodidtobecomeagoodcompany.Around2011till2013thereisavisiblelowpointinthecompany'sprofit.2012wasabadyearforalotofcompaniesindifferentareasbecauseofthefinancialcrisis.ThereisabigdropforBiancoin2013(figure1appendix).Figure1inappendixdescribestheEBITDA,whichmeansRevenue-Expenses(excludingtax,interest,depreciationandamortization).

ThenumbersintheannualreportoftheyearfromBianco,2014showabigdropofDKKin2013.

Figure1,AnnualreportofBiancoInternationalA/S,2015. TheturnoverwasnotreportedintheannualreportofBianco2014.Theaverageturnoveroftheyear2013isfromtheStatistikbankenDenmark.Undermanufactureofleatherandfootwearthenumber306millionDKKwasfoundastheaverageturnover.Theaveragegrossprofitfor2013was34,1%. TheROI&PMRratiosweren’tabletofindbecausetheprofitbeforeinterestwasnotlistedintheannualreport,2014,Bianco.TheROIratiocouldstatethereturnofinvestment.ThiswouldbeaninterestingfigurebecauseBiancohadtoclosesomanyshopsin2012-1013.ThatmeantthattheinvestmentBiancodidwaslost.ThePMRratioshowsthepercentageofthethesalesthatareleftoverafterallexpensesarepaidbythebusiness.ThePMRratiocanbeusedtoseeifacompanyeffectivelyacompanyconvertsalesintonetincome.UsingthePMRratiowouldhavebeeninterestingbecauseitshowstooutsidershowefficientthecompanyBiancoisrunning.AnextremelowPMRratiowouldmeantheexpensesaretoohighandthemanagementneedstobudgetandcutexpenses. TheROEshowstheamountofnetincomereturnedasapercentageoftheownersequity.TheROEratiomeasuresacorporation’sprofitabilitybyrevealinghowmuch

Visual Business Model Group 14

18

profitacompanymakeswiththemoneytheownerinvested.Infigure2theROEisverylowandalmostneverhasbeenabove0%.WhichmeansBiancohadabigproblemin2013whenthecompanywasatanabsolutelowpoint.TheROEratiocouldbeseenasthepiggybankofacompany.Theequityisnotneededtokeepthecompanygoingunlessthecompanyismakinglossinsteadofprofit.Afterthelowpointin2013,Biancoisclimbingbackupandin2016theyprobablywillbeabovezeroagain.

Figure2,ROEratiocalculatedoutofannualreportBianco,2014

1. 2010 3.2012 5.20142. 2011 4.2013

ThefinancialhistoryofBiancoisveryinteresting.Biancowasasmallercompanyin2010buttheymadeprofit.Astheygrewbiggertheprofittheymadewasgettinglower.Thiswasbecauseoftheinvestmentstheydid.In2011,whenBiancowasaninternationalcompany,theEuropeaneconomywasgettingworse.ThisaffectedBiancoalot.ThenumbersshowthatBiancohadareallythoughtimein2012-2013oneveryeconomicalaspect.Now(2015/2016)thatthewholeeconomiccrisisisoverandcompaniesonaveragearestartedtogrowagain,Biancoisalsogettingbackontrack.

Visual Business Model Group 14

19

Forecast

Figure3,estimatedgrowthbasedonrevenue. Infigure3thereisthegrowthover2010till2014.From2014till2018itisaforecast.Thegrowthratewouldbe1,07. Seenfromfigure3isthatafterbeingataverylowpointin2013Biancowillslowlybecomeamoreprofitablecompany.

Visual Business Model Group 14

20

Figure4,declinebasedontheindexnumbersoverthepastyears.

Theotherforecast(Figure4)isbasedonBianco’sIndexnumbers.Itshowsadeclineof0,35eachyear. Thisisnotveryreasonable.Theeconomywasreallybadingeneralaround2010till2013.ItisnotfairtomakeaforecastbasedonBianco’sfinancialnumbersin2010till2013.Iftheeconomywasgettingworse,insteadofbetter,thiswouldbeagoodforecast. ThemostlikelyforecastwouldbeFigure3.Biancokeepsgrowingaslongastheeconomyisgrowing.Itdependsonhowmuchtheyexpandtoothercountriesandiftheyaresuccessfulamongtheircustomers.ButfromBianco’slowpointin2013they'reonlystartingtogrowagain.

Visual Business Model Group 14

21

Visual Business Model Group 14

22

RecommendationsBiancostruggledoverthepast5yearsduetocrisisandwantstogetbackonitsfeetwithinthenextfewyears.TheirfinancialsituationmadethemclosemanystoresandfocusmainlyonScandinavianmarket.ThefuturegoalofthebrandistokeeptheprimaryfocusonScandinavia,expandinSwedenanddevelopthebrand’sDNAsowhenyouseetheirproductsitisclearthattheywerecreatedbyBianco.Thesegoalsareveryimportantinouropinionduetothefactthattoday,Biancodoesn’thaveaclearDNA.Mostshoesareinspiredbyhigh-endbrandslikeAcneetcandthismakesitdifficultforthecustomertorecognizeBiancoasabrand. NextrecommendationforthisbrandistoworkontheirsocialmediamorebecausetheirprimarytargetgrouparebasicallytheMillennials.Peopleatthisagegroupareusingsocialmediaoneverydaybasisandthebrandcouldbediscoveredbymorepeoplethroughthischannel.Thisrecommendationcanbealsoappliedtotheirwebsitewhichweweretoldtheyareworkingon.Thewebsite/e-shopisnotuptodateandsomeinformationarenotrelevanttoday.Thisisquitemisleadingandconfusingforthefuturecustomerswhowanttoknowmoreaboutthisbrand. CollaborationwithbloggersisatrendtodaywhichBiancosuccessfullyusesmainlyontheNorwegianmarketwithCamillaPihl’scollection.ThecollaborationwiththeDanishbloggerTrine’sWardrobedidnotbringalotofsuccessontheDanishmarket,thereforetheyshouldfindadifferentwaytoapproachtheirtargetgroup“MissBianco”inDenmark.Otherthanthat,ifthesuccessinNorwaywasquitebig,theyshouldcontinuethesebloggershoelinesinthefuture. Asfortheirretailstores,wefindthecollaborationwithartistsveryinterestingbutwearedoubtingtheoverallconnectionwiththebrand’sDNA.Biancoseemsasaverydowntoearthbrandthatdoesn’tnecessarilysellshoesoraccessoriesthatwouldshockthecustomersbuttheartistscompletelychangethisviewandcreatesomethingtotallydifferentthatisexpectedtobeseenintheBiancostores.Ithasbeenexplainedtousthatthiscollaborationisusedtoattractmorepeopletovisitthestore.Itispossiblethatitbringssuccessbutitwouldbemoreinterestingtomaketheproductsandthedesignofthestoreinharmonysothecustomerknowswhathe/sheisbuying. InconclusionBiancohasmanythingstoworkontoreallybecomeassuccessfulastheircompetitionontheScandinavianmarket.Ourrecommendationistoworkonthebrand’sDNAandmakeitasapriorityandthentrytoexpandorcreatenewprojectsandcollaborations.WebelievethatBiancocanreachtheirgoalsandbecometheleadingbrandontheScandinavianmarketbutitwilltakealotofeffortfromtheBrand’sperspective.

Visual Business Model Group 14

23

ConclusionUsingthedifferentmodelsshowsthatBiancoisagoodandsuccessfulshoecompany.TheBusinessModelCanvashasespeciallybeenusefulinmappingthecompany’sstructure.ItshowsthatBiancohasastrongideaoftheirtargetgroupanddoesnotcompromisewiththeirdesigneventhoughfashiontrendsmightleadinanotherdirection.Biancohavewithgreatsuccessusedtheirwebsiteastheironlydirectchanneltotheircustomersandotherwisereliedontheretailers.Theseretailersareveryimportantintheirwayofcommunicatingtotheircustomersthroughouttheworld.Oneoftheirstrongpreferencesisthattheystaywiththesamesuppliersforalongperiod,sotheyestablishinggoodandsolidrelationships. Biancoisinanichewithmanycompetitorswhereitcanbedifficulttostandoutanddifferentiatethemselvesfromothers.Oneofthethingstheydoinorderofstandingoutisbynotstrayingfromthetraditionalways.However,thereisroomfordevelopment.Theplacewhichneedsthemostimprovementisadvertising,andbeingmorevisibleonline.Doingthis,whilestillkeepingthetraditionalvalues,willbethewaytoamoreefficientBianco.

Visual Business Model Group 14

24

Bibliography -BusinessModelCanvasfilesonStudienet: -BusinessModelGeneration-chapter1 -BusinessModelCanvasPoster -BusinessModelGenerationPreview,AlexanderOsterwalder&YvesPigneur -presentationfromBIANCO -BIANCO [ONLINE] http://www.bianco.dk -Whatyoushouldknowaboutbrandingandmarketing,DrPaulMcElheron -FAQsonmarketing,PhilipKotler2008[BOOK] -Forbes. Forbes Magazine, n.d. Web. 14 Jan. 2016. [ONLINE] -Entrepreneur. N.p., n.d. Web. 14 Jan. 2016. [ONLINE] -LevyWeitz,Levy-RetailingManagement,McGraw-HillInternational7thEdition,NewYork,2009.[BOOK]-Business Model Canvas, Wikipedia. Wikimedia Foundation, n.d. Web. 14 Jan. 2016. [ONLINE]

Visual Business Model Group 14

25

AppendixFig.1 – Business Model Canvas

Visual Business Model Group 14

26

Fig.2-Channels VeryimportantforBiancoA/Saretheirsalespartners.Theytakecareoftheirdistributors,aswellascustomers;settinguppersonalizedonlinestore.