Interhost Solutions (IHS) utilized some business plans in starting the company. The founders set clear KPIs and make use of some business frameworks. In the beginning, they tried to apply the Lean Start-up method, but they say that it was difficult for the service company to stick to it. This fact is really insightful because simultaneous experimentation such as the Lean Start-up is more effective for start-ups than focused commitment (Andries, Debackere, and Van Looy, 2013). Hence, IHS should have special features in its business model. In this part, we will analyze IHS’s business model by using Business Model Canvas and other additional information.
In the Business Model Canvas, a company’s business consists of nine factors; Key Partners,...
Those companies provide IHS with high-quality materials necessary for software development. Having such famous companies is beneficial for IHS in acquiring trust from customers because it is a start-up.
Then, Key Activities are cloud hosting, software development, and IT consulting. Thanks to employee’s deep skills in IT, IHS offers sophisticated services in line with customer needs.
Also, human capital is the most important Key Resources in this company. Although there are only 15 employees in IHS, every worker specializes in IT and that generates highly added value.
Next, we will take a look at Value Propositions. The founders say that customized services are the most critical element for IHS. IHS offers completely unstandardized software for each customer, which fits the customer needs. Although the price is more expensive than the average, customers are satisfied with it because of its highly customized services. Moreover, not only software development but also consultancy or network administration IHS deals with. Especially Phillip, one of the founders, are strongly interested in investing in good ideas of those who don’t have IT skills. Therefore, this sort of investment may grow more in the...
As we already pointed out, the primary clients of IHS were small-sized or medium-sized companies. However, this does not mean that they targeted niche market. Rather, they are trying to acquire new and bigger customers in the future.
Then we will analyze Cost Structure of the company. As is often said in the IT industry, human capital is the most essential for IHS. Although there are only 15 employees in the firm each employee has special skills in information technique, so it is inevitable for wages to rise up. However, costs except for wages are different. As we already revealed, each project is really independent and every PM has to manage the project cost. The company evaluates PMs in terms of costs, revenue, and time (efficiency), so the cost management is conducted on the basis of projects.
Likewise, Revenue Streams should be analyzed on the project basis. PM has the authority to contract the clients, so the pricing tactics are totally up to PM. Although IHS provides customers with unstandardized services, in many cases the prices are slightly more expensive than the...
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