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Business Model

Discuss about the Business Model Of Raiz Investment Australia Limited.

Any business functioning in the external environment needs to have a definite business model which will assist it in ensuring that all the operations of the firm are carried on effectively. The company which has been chosen for the given assessment is the Raiz Investment Australia Limited. The Raiz Investment Australia Limited Company is an Australian based award winning financial technology company which permits the different customers to make a micro investment of the round upped value of an item which has been purchased (RZI Share Price, 2018). The company currently has 160000 active users with approximately $200 million funds under its management. The company is registered under the Australian Stock Exchange with the name ASX: RZI. The CEO of the company is George Lucas and has been managing the company quite well. Moreover, the company made a profit of around 1.04 million dollars as of 2017.  The company fucntions through a mobile application which is available on Android as well as iOS platforms (Raiz App., 2018). The company works automatically and any purchases made online will be rounded up and the extra roundup shall be invested into the spare change up the exchange traded funds. The given report will be deconstructing the business model of the firm followed by the critical success factors and probable down risks.

The company charges a subscription of 5$ to its customers and allows them to invest the extra money from their rounded up purchase into the exchange trade markets. The company has an official website through which it deals with the different customers and the profile of the owners are also largely available on the website (Kiel, 2014).

The business model`s nine blocks approach comprising of the details of the RZI`s business model has been given in the Appendix.

Customer segments

The different customer segments which the company aims to target are as follows:

  • White collared smartphone users: Who are interested in investing their funds in the exchange trades
  • Affluent individuals: Who can invest a certain percentage of their funds (Armstrong et al., 2015). 
  • Merchants: Who can invest their profits
  • Online retailers: This covers business men who are involved in online business and like to invest their money.
  • Students- Who have saved their pocket money can invest in these portfolios.

The company has different portfolio offerings for different consumers and the consumers can invest in it as per their convenience.

Key partners

For the key promotion and networking purposes the key partners of RZI are as follows:

  • Networking groups- These networking groups like LinkedIn and Facebook tend to assist the company in ensuring that the sources help the company to attract investors.
  • Outsourced Engineering teams- These teams can be paid in order to increase the bond between the different consumers and make the online activity efficient in nature.

Value proposition

The value proposition which is offered by the application is:

  • It allows easy investment by depositing the extra rounded up money into the exchange trading.
  • It allows online money transfers
  • It permits users to invest their money without additional efforts and from anywhere at any point of time.
  • It offers various portfolios which can be invested in as per the needs of the different individuals.


Key activities

The company allows easy investments to the different customer segments. Using these services there are five major types of investments which a company can make:

Building Blocks

Conservative

Moderately Conservative

Moderate

Moderately aggressive

Aggressive

Emerald

Moreover the customer can choose from Round up services, Recurring deposits and Lump Sum investments as per their need.

Channels

Channels can be described as the process which can be adopted by the firm to make the products available to the different consumers. The different channels which are used by the business are as follows:

Application

The company has a well-developed application through which the consumers can make sound investments. This application can be accessed easily at any time and this helps in ensuring that the other online activities which are the payments and purchases being made can be accessed easily.

Online website

 The online website of the company provides every necessary information that an Investor needs to know about the company in order to ensure that the investor can built in trust and check their calculations and aimed investments and savings.

Social media presence

The social media presence of the company is also very strong and using these mediums the customers can successfully gain extensive knowledge about the company and the services it tends to offer to the different consumers (Massa & Tucci, 2013).

The application is the most popular channel which the company makes use of and allows the investors to make quick and sound investments.

Revenue streams

The primary revenue system of the company is based on the following aspects:

  • Subscription fees: These subscriptions are made by the customers who want to invest regularly. An average fees of $5 has to be made by the consumers.
  • Commission; the company also earns through the commission received on investments. This commission is received from various sources like the investors and the companies as well.
  • Advertisement fees: The Company also earns through advertisement fees of various partners and companies alike.


Cost structure

The cost structure of the organization is based on the registration fees and other infrastructural charges as incurred by the organization. The organization pays a regular app development fees, pays networking fees and others. The following comprise of the costs of the firm:

  1. Technology/ Infrastructure
  2. Subsidy
  3. Market research
  4. Advertisement
  5. HR (Zott, Amit & Massa, 2011).
  6. Integration and Customization
  7. Taxes

Key resources

The key resources of the firm are as follows:

Well connected application: The application is the primary infrastructure available of

Governmental body connections- The Company has business relationships with the security exchange board which serves useful registration procedures to the chosen organization.

Office space in Australia- This office is the registered office of the company (Sinkovics, Sinkovics &Yamin, 2014).

Good will of the company: The Company has a good name in front of the different consumers.

In the financial technology company the customer relationship tend to play a huge role in the business organization. For this purpose, the company maintains accurate customers through the follows:

Customer Segments

Website customer care service

The company has a specialized section, where the different customers can contact the company.

Chat services

The company also provides live chat services to the different consumers.

Social media channels

The social media channels also serve as an important source of information for the company and it helps them to maintain sound relationships with the customers.

The different blocks of the business model are highly interrelated. This can be stated because any change in one of the components of the business model shall bring about a change in the other components as well. In the same manner, if the cost structure of an organization goes through a change then the revenue streaming shall also be affected accordingly.

Moreover, thus linkage is considered to be one of the most important linkages and tend to ensure that the company is able to earn higher amounts of revenues.

The key resources of the company are also related to the revenue streams and cost structure of the organization (Hong & Fauvel, 2013). Moreover, the customer relationships and the customer segments are also related to one another and tend to determine the success of the business enterprise.

In the same manner, the key resources, key partners and other value propositions of the RZI are deeply interrelated which tends to ensure that the organization succeeds in the long run.

They critical success factors of the business are as follows;

  1. The online application of the company is very useful as it can be used effectively at any time and the company can make purchasing decisions efficiently.
  2. The purchased upped value- The manner of investment which has to be made by the consumer is one of the success factors (DaSilva & Trkman, 2014). As the company automatically ups the value of the purchase and invests the balance into stocks, this concept is greatly liked by the customers.
  3. Wide range of offerings- The portfolio offered by the consumer is very large and different consumers can make the purchases according to their convenience and budget.

The different downside risks which are associated with the business are as follows:

Financial market crash

In case the financial market crashes and the values of the company which are enlisted in the portfolios of the fin tech company tends to go down, then the business may take a toll.

Reduction in online purchases

As the company ups the purchases that have been made by the consumers and rounds them off consistently the company can suffer a huge blow if the online purchases as made by the company, decreases adequately.

I would have made quite a few number of changes to the business model of the company. Some of these changes are as follows:

Customer segments: The customer segments of the organization can be increased considerably. The company can target the new young retired individuals and encourage them to register under the firm (Bocken et al., 2015).

Key Partners: The key partners of the firm can be increased and it can take in various supermarkets, e-commerce websites and other retailers under its umbrella to ensure long term success (Carayannis, Sindakis & Walter, 2015).

Revenue Streams: The revenue streams and sources of the business can increase by partnering with the different retailers.

Conclusion

Hence, from the given analysis it can be stated that the organization has been very successful in its domain and has converted the investment into the financial markets very easy by rounding of the up purchases as made by the consumers. The company has won various awards for it and this has led to the competitive positioning of the company.

The recommendations are as follows:

Customer segments can be extended

The company can increase the promotional activities in order to ensure that it attains success in the business domain.

References

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.

Bocken, N. M., Short, S. W., Rana, P., & Evans, S. (2014). A literature and practice review to develop sustainable business model archetypes. Journal of cleaner production, 65, 42-56.

Carayannis, E. G., Sindakis, S., & Walter, C. (2015). Business model innovation as lever of organizational sustainability. The Journal of Technology Transfer, 40(1), 85-104.

DaSilva, C. M., & Trkman, P. (2014). Business model: What it is and what it is not. Long range planning, 47(6), 379-389.

Hong, Y. C., & Fauvel, C. (2013). Criticisms, variations and experiences with business model canvas.

Kiel, I. H. (2014). Entrepreneurial marketing.

Massa, L., & Tucci, C. L. (2013). Business model innovation. The Oxford Handbook of Innovation Management, Oxford University Press, Oxford, 420-441.

Raiz App. (2018). Retrieved from https://raizinvest.com.au/important-documents/

Raiz App. (2018). Retrieved from https://raizinvest.com.au/partnerships/

RZI Share Price | Raiz Invest Limited (ASX: RZI) | SharePrices. (2018). Retrieved from https://shareprices.com.au/company/au/asx/rzi

Sinkovics, N., Sinkovics, R. R., &Yamin, M. (2014). The role of social value creation in business model formulation at the bottom of the pyramid–implications for MNEs?. International Business Review, 23(4), 692-707.

Zott, C., Amit, R., & Massa, L. (2011, July). The Business Model: Recent Developments and Future Research. Journal of Management, 37(4), 1019-104.

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[Accessed 15 April 2024].

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My Assignment Help. The Essay On Raiz Investment Australia Limited [Internet]. My Assignment Help. 2019 [cited 15 April 2024]. Available from: https://myassignmenthelp.com/free-samples/business-model-of-raiz-investment-australia.

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