Business Models of Successful Start-up Companies : A comparative study of start-ups’ business models and how these are adapted to trends and competition in the industry

University essay from KTH/Industriell Marknadsföring och Entreprenörskap; KTH/Industriell Marknadsföring och Entreprenörskap

Abstract: Since the majority of emerging start-ups are not able to survive on the market, this study investigates business models in four start-up companies from two different industries in order to better understand how their business models relates to their success. This study is commissioned by a start-up who are about to begin their business in Stockholm. The purpose of this study is to make an assessment of the components in the utilized business models of growing start-ups in markets with different level of innovation. The investigation is made based on how trends and competition in the industry affect the business model and what the similarities are between the business model components of successful start-ups in two different industries. This study contribute to literature on start-ups’ business models by beginning to map differences and similarities in start-up’ business models as well as how these are affected by and adapted to the industry. It also helps start-ups understand the importance and usage of different business model components. In order to make an assessment of different business models, a multiple case study approach is adopted where each case is a start-up company. The analysis then follows a 2x2 framework and is sorted by Business Model Canvas. Three analyses are made, one within each industry and one between the two industries. The first analysis compares the business models of two companies in the industry of electricity consumption measurements and finds that trends regarding the environment and innovation affects both the industry and its’ competitors. The second analysis compares the business models of two companies in the package deliveries industry and trends regarding online shopping are found to affect this industry. The third analysis compares the two industries and both differences and similarities are found. The main findings regarding the business model components are then applied to the commissioner company and other emerging start-ups. Findings shows that the investigated start-ups have adapted the business model components to trends in the respective industry. The business model also adapts to the technological development in the associated industry and in other industries as well. The use of social channels seems to affect the customer relationships. Competition have affected the business models’ of the investigated start-ups and it is noticed that international and national goals, such as lowering  the environmental impact, also affect the industry and the business models since these goals can encourage and push for change. Furthermore, each of the start-ups’ business model components have similarities even though the B2B, B2C and B2B2C strategies create differences. Furthermore, all of the start-ups are working with the trial and error approach, sustainability and environmental impact when developing their business model.

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