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Business Model Canvas Innovation and Blue Ocean Strategy for eFishery

Conference Paper · January 2017

DOI: 10.5220/0007087906800686

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 Business Model Canvas Innovation and Blue Ocean Strategy for
eFishery

Robi Awaluddin1, Lukman M. Baga2 and Ono Suparno2

1IndonesiaUniversity of Education, Jl. Dr. Setiabudhi Bandung, Indonesia
2Bogor Agricultural University, School of Business, Jl. Raya Padjajaran, Bogor, Indonesia
{awaluddin.robi, osuparno}@gmail.com, [email protected],

Keywords: Business Model Canvas, Blue Ocean Strategy, Start-up, Innovation, Fish Feeder.

Abstract: eFishery is an innovation company in agriculture which help the community with its founded, eFishery is a
fish feeder integrated solution for fish and shrimp. This machine can automatically feed the fish, has a
sensor for sensing the appetite of fish and adjust the amount of feed given to appetite, and can be connected
through the Internet to customers. eFishery has gotten investors but its product sales are still not in
accordance with the expected target, and other managerial problem. This research method is qualitative with
approach based on the nine elements of business model canvas mapping, SWOT analyst and blue ocean
strategy. Based on interviews and observations in this study know that there are several blocks of nine
elements of the business model canvas that needs to be retained, eliminated, enhanced and supplemented.
There are two alternative BMC’s prototypes resulting from this research, first is for domestic market
oriented with main customer segments are government, large aquaculture companies, fish, shrimp and
fodder industry associations. Then the second is export market oriented.

1 INTRODUCTION market of PT MTN through eFishery products are

fish farmers throughout Indonesia, but the problem
EFishery was produced by PT Multidaya is the refusal of many growers will eFishery
Technology Nusantara. The company was founded products because they are not familiar with the use
in 2013 with the initial concept of bootstrapping yet of high-tech agricultural products. On the other
Along the way the company is rapidly growing into hand, demand from abroad as from China, Brazil
a start-up with high added value and have started to and some other countries which can not be met by
get investors from abroad, in September 2015 PT the company because the international patent license
MTN has gained investor of Aqua-spark and of eFishery is still in the process of filing. The next
Ideasource. problem that occurs is the lack of availability of
In middle of 2016 eFishery was sold 256 units at access to electricity in fish /shrimp farmers ponds /
a price per unit ranges between Rp. 5.873 million up so PT MTN must develop these eFishery with
to Rp. 7.791 million. There are three main target this resources using solar panels, but it will lead to high
eFishery customers, including the government production costs that implicate the selling price to
through the ministry of maritime affairs and consuments will be increase. On the supplier side,
fisheries, large companies such as PT JAPFA PT MTN still rely on the vendor suppliers of
Comfeed Indonesia Tbk, and PT Central components from China that caused production costs
Proteinaprima Tbk. and small-medium aquaculture to be less efficient and requires a long time for
farmers companies. ordering, this is because the company has not found
Apart from these achievements, CEO of PT a supplier company in the country.
Multidaya Technology Nusantara targets revenues According to Hoffmann and Sempels (2013), to
reached USD 8 million in 2016 from the selling and develop business models, its being to be a
leasing of products eFishery, but to date the new challenging job for the company or region who are
product units sold is around 256 which the target interested in researching the different regions. The
unit sold about 2561 units, still far from the expected approach uses a business model canvas that can be
target company. Furthermore, the largest target an effective tool to assess the potential of the

680
Awaluddin, R., Baga, L. and Suparno, O.
Business Model Canvas Innovation and Blue Ocean Strategy for eFishery.
In Proceedings of the 1st International Conference on Islamic Economics, Business, and Philanthropy (ICIEBP 2017) - Transforming Islamic Economy and Societies, pages 680-686
ISBN: 978-989-758-315-5
Copyright © 2018 by SCITEPRESS – Science and Technology Publications, Lda. All rights reserved
 Business Model Canvas Innovation and Blue Ocean Strategy for eFishery

business before the business plan has been formally relationship, 5. revenue streams, 6. key resources, 7.
developed (Gavrilova et al., 2014). To survive in the of key activities, 8. key partnerships, and 9. cost
globalization, companies need to prepare a business structures.
model innovation strategy as a strategy to win the Immonem (2012) in A New Business Model
global competition, to develop innovative value Renewal Process: A framework of Utilizing
proposition, market segmentation and key partners Collaboration with External Experts resulting
who become the absolute key factor in the global research renewal business model covering four
market competition (Permatasari and Dhewanto stages: participation, preparation, business
2013). This research aim is to vision and mission development and follow-up models. Meanwhile,
identification, do the analysis of current business according to Hone et al. (2011) in A Gounded
model canvas and make a new business model Theory on The Business Model Stucture of Google
canvas by blue ocean strategy. concludes that once the company understands the
structure of the business model, the company can
design a business model for the future. Bonazzi and
2 LITERATURE REVIEW Zilber (2013) in Innovation and Business Model: a
case study about integration of Innovation Funnel
and Business Model Canvas resulted that in the
Christensen (2001) defines the business model as the
source of competitive advantage possessed by an development and growth of the Dutch State Mines
organization that distinguishes the company from strategy, suggesting a close relationship between
empirical practice and academic postulates. The
product positioning in the same industry. The
business model is usually used by a manager to basis is structured strategy of product diversification
and development, as well as in the use of association
describe the logical thinking of the company, how
and geographic expansion as a market penetration
the business is run and how to create value for its
stakeholders (Aspara 2011). lever, elaborated to meet global flaws in 2050.
The business model also has some benefits for a
company that is to make it easier for planners and
decision makers in companies see the logical 3 RESEARCH METHODS
connection between the components of the business
to produce a value for consumers and companies. This research was conducted in March-December
The business model can also help test the 2016 which took place in the office of PT. MTN in
consistency of relationships between components, Bandung and Jakarta, Indonesia.
and help test the market (Team PPM Management This research uses descriptive qualitative
2012). approach in the form of a case study on PT. MTN
According to Osterwalder and Pigneur (2010) which produce eFishery. The study was conducted
said that an effective way to assess the overall intensively, and in-depth detail about a particular
integrity of the business model is to combine object in a certain period of time including the
classical analysis of the strengths, weaknesses, environment (Umar, 2010).
opportunities and threats (SWOT) through the This study uses a survei, depth interview,
business model canvas (BMC). According to David observation directly visiting to the office of PT.
(2006), all organizations have strengths and MTN, the formulation of strategies using vision and
weaknesses in the functional areas of business. mission and SWOT analysis to the current business
Goals and strategies set out with the intention of model canvas, blue ocean strategy mapping which
utilizing the internal strengths and overcome supported by literatur review to produce two
weaknesses. prototypes of future business model canvas.
In "Business Model Generation" Osterwalder and Respondent is purposive sampling from internal
Pigneur (2010), create a framework that shaped company and external company such a goverment,
business model canvas and consists of nine boxes academician and business consultant.
containing elements that are interrelated. According
to Osterwalder and Pigneur (2010), the business
model canvas is a business model that describes the
rationale of how an organization creates, delivers,
and captures value. Osterwalder and Pigneur uses
nine basic elements, namely: 1. customer segment,
2. value proposition, 3. channels, 4. customer

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ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

4 RESULTS AND DISCUSIONS

PT MTN's vision is to become a "Fellow Farmers to
Grow".Vision is basically showing the purpose and
clarity of direction in the long term and contains a
philosophy of values espoused companies. While the
mission is carried PT MTN was to create a product
called eFishery fish feeder that have three main
features:
ƒ Smart Autonomous;
ƒ Realtime Monitoring;
ƒ Smart Sensing

EFishery is a smart feeder manufactured by PT

Multidaya Technology Nusantara. This tool serves
as a fish and shrimp feeder automatically with the
advantages of smart autonomous means that the tool
can automatically feel the appetite of fish, realtime
monitoring means that these substances
automatically report their activities at any time to the
user through an intermediary interface of websites
that are connected to the Internet, and smart sensing
functions is to feel the appetite of fish and shrimp, Figure 1: Current Bussiness Model Canvas.
and can control the quality of the pool water that can
be used by the wide community that includes Table 1: SWOT Result.
government, corporations large, medium and small-
sized aquaculture so that people can be helped in
managing their business more effectively and
efficiently. Based on research, the vision and
mission of PT MTN are no need to revised.
The result of SWOT identification to the nine
elements of business model canvas of PT MTN and
the company's internal and external analysis can be
used as a benchmark to arrange new prototype of
business model canvas. The results of such
identification can be collaborated with the basic
principles of blue ocean strategy.
Some studies suggest that innovative business
models must be able to align internal capabilities or
adapt to external changes such as technological
developments or change customer values (McGrath,
2010).
PT MTN was originally bootstrap until won
several competitions in 2015 eFishery get investors
from Ideasource and Aquaspark.
Current business model canvas mapping and
SWOT result are in the figure 1 and table 1 above.

4.1 Alternative Prototype Business

Model Canvas 1
In this prototype, PT MTN focuses on domestic
customer segment.

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 Business Model Canvas Innovation and Blue Ocean Strategy for eFishery

4.1.1 Customer Segmentation MTN is the quality and performance of eFishery

product, according the humid weather in Indonesia,
PT MTN focuses on market development in eFishery's endurance needs to be improved and
Indonesia. PT MTN has specifically focused its guaranteed its durability up to five years. The
customers on aquaculture farmers in Indonesia. addition of solar panels to the appliance should be an
Current customer segments are Government through option for consuments who do not have access to
the Ministry of Maritime Affairs and Fisheries, large electricity.
entrepreneurs in fisheries (aquaculture) and medium-
small aquaculture entrepreneurs. Medium-small 4.1.3 Customer Relationship
segment of the entrepreneur in this field has its own
character compared to other customer segments. PT MTN needs to increase the number of personal
These character differences are the low level of assistance to be more effective in serving
education, knowledge and skills that result in the consumers, this is mainly because of the new
level of interest to buy eFishery products was still eFishery products and need more intense and serious
low, this is different from the government that education to consumers. In addition, it needs to
supports the development of eFishery. create a group of customers that have a function to
PT MTN has tested its equipment at Lampung exchange experiences and information between
Sea Aquaculture Center, however PT MTN needs to eFishery users.
intensively increase cooperation and relationship to
the central government through the Ministry of 4.1.4 Channel
Marine Affairs and Fisheries. Cooperation with the
central government aims to allow eFishhery The existence of eFishery as a new products become
products to be purchased by the government and the a challenge for PT. MTN because people still do not
government can channel them as grant aid to needy know in detail about benefits of eFishery. PT MTN
communities. PT MTN needs to register eFishery to needs to create a good marketing strategy efficiently
a government e-catalogue so that the government for the process of delivering value to the consumer.
can easily assess and purchase eFishery products. The strategy is to target large companies in fish and
Furthermore, in Indonesia today the shrimp shrimp and animal feed association of Indonesia and
industry has been running well consisting of medium government in advance to build brand awareness, PT
and large scale companies scattered throughout MTN need to make educational promotion more
Indonesia. Indonesia is one of the largest shrimp interesting with more interactive media through
exporter countries in the world with exports 400 to electronic advertisement and mass media. In
500 thousand tons per year. This is different from addition PT MTN needs to create a strategic
fishery industry that is still dominated by large distributor to streamline sales channels and get
companies. This condition is a potential market profitable customers as much as possible.
opportunity for eFishery, considering that the
company must focused on the shrimp industry 4.1.5 Key Activities
segment too. Then PT MTN also needs to partner
with the Association of Animal Feed Indonesia Standard Operating Procedures (SOPs) are
because its already has a wide network and has a documents relating to procedures performed
good sales person and sale educator so that if the chronologically to accomplish a job aimed at
cooperation is already established, its can also obtaining the most effective work of the workers at
market eFishery to its customers. the lowest possible cost. SOPs usually consist of
Building brand awareness is very important for important rules, method of writing procedures, and
eFishery to get wider attention from consumers. To completed by the flowchart chart at the end.
build the brand awareness, eFishery needs to focus Currently PT MTN has not implemented SOP
the consumer segment in the large fish and shrimp animore, therefore PT MTN needs to make SOP for
industry, the Indonesian animal feed association, the the direction and structure of its employees work can
government not in medium and small companies. be monitored and standardized so it can make
activity more effective and efficient in performance
4.1.2 Value Preposition according to company's purpose and vision.

eFishery has a very useful value proposition for the 4.1.6 Key Resouce
needs of the community in the field of fish and
shrimp farming in Indonesia, both in terms of Currently PT MTN has insufficient production
innovation novelty, its use and design. However, one capacity when compared with the ideal amount.
of the main focus that should be paid attention by PT Currently PT MTN produces eFishery of 100 units

683
ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

per month, while the ideal amount is 300 per month. 4.2 Alternative Prototype Business
PT MTN needs to increase its production capacity in Model Canvas 2
collaborated with the improvement of promotional
and marketing channels. In the 2nd prototype of business model canvas, the
organization should to focuses on the export market
4.1.7 Key Relationship segment. The selection of the foreign market
The purpose of the implementation of quality segment has implications on all business model
assurances is to ensure the vendor meets the canvas element.
standard requirements that have been applied by the
company to the activities or raw materials made by
vendors associated with eFishery production
activities. If in the QA process there are vendors
which do not comply by the standard, PT MTN can
look for better vendor performance.

4.1.8 Cost Structure

Control in research and development activities need
to be done so that the cost is not too expensive. PT
MTN needs to focus on improving product quality
and with the application of appropriate technology
that has been tested, for example the addition of
solar panels on eFishery. Furthermore, for
employees, in order to save budget expenditure, PT
MTN need to focus on outsourching work system.

4.1.9 Revenue Stream

The implication of market development is the
acquisition of new funding sources for companies
from the central government, large and medium fish
and shrimp companies and the association of animal
feed of Indonesia. The 1st prototype of BMC is in the
figure 2 below:

Figure 3: Business Model Canvas Prototype 2.

4.2.1 Customer Segment

Major export opportunities are mainly in the
ASEAN its because the ASEAN Economic
Community since 2016, ASEAN is a potential
market considering many of the ASEAN member
countries that have fish and shrimp industries such
as Thailand and Vietnam. Each countries are
countries with a good quality and quantity of fish
and shrimp industries. Export opportunities are also
wide open for Asian markets, especially China with
large economies including in its fish industry,
Bangladesh, India to Turkey. Likewise the market in
Africa, Europe to America.
Choosing to focus on the export market has
implications for improving product quality and
higher operational costs then to domestic market
selection. However, with its focus on export
Figure 2: Business Model Canvas Prototype 1.

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 Business Model Canvas Innovation and Blue Ocean Strategy for eFishery

markets, brand awareness and brand equity will be 4.2.7 Key Partner
easily and rapidly obtained and revenue too.
International distributor company, vendors and
4.2.2 Value Prepositions suppliers are business partner of PT MTN also the
new strategic investors.
PT MTN needs to create new variant with bigger
tank capacity for overseas market because the area 4.2.8 Revenue Stream
of fish pond there tends to be bigger than in
Indonesia. In addition, quality and durability are also Prototype 2 offers revenue from larger exports
absolutely enhanced to achieve export consumer compared to prototype 1 because of its have high
satisfaction. Selling price does not need to be potential customers. Revenue comes from the
lowered as it does on prototype 1, but must be purchase of eFishery units, monthly leases,
adjusted to be more expensive and to exchange rate purchases of eFishery tool components and from
in each country. eFishery care services.

4.2.3 Customer Relationship 4.2.9 Cost structures

PT MTN still has to create a managed customer The implications for the cost structure of these
group in each country for customers to be well alternatives are increased costs due to the diversion
served and can exchange information and and incremental costs of salaries, international
experiences through the user group. Organizations distributors, workshop expansions and the addition
also need to recruit overseas personal assistants in of human resources.
accordance with their country to assist the
education-promotion process, customer complaints
and customer serviceßß.
5 CONCLUSIONS
4.2.4 Channel
The vision and mission of the company is not be
To meet the export market PT MTN needs to create revised, which needs to be revised is the current
export distributors in each country that are business model canvas because it raises managerial
prioritized based on potential customers. In addition problems within the company. This research
to recruiting international distributors, organizations produced two prototype of business models canvas,
also need to recruit international sales who will be the first focus on the domestic market in Indonesia
useful for lobbying and diplomacy in search of and the second focus on the export market. both
companies and governments to market products. have different managerial implications. on the first
Forms of business partnerships used are business to prototype the cost incurred would be cheaper than
business and business to goverment considering the second but if choosing the second prototype, the
potential customers are targeted governments and efishery product would be easily sold internationally
large companies. because of its huge market potential although its cost
more expensive than the first prototype option.
4.2.5 Key activities
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 ICIEBP 2017 - 1st International Conference on Islamic Economics, Business and Philanthropy

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