Authors: Anna-Maria Assey, Sofie Bixo, Dora Drexler, Lawrence Jongi, Jose Reuben
1. TEAMWORK AND CONTRIBUTIONS
Our team formation activities involved a collaborative approach to ensure effective teamwork and utilization of individual strengths. We used the Team Canvas framework (see figure 1) to facilitate team building and establish a shared understanding of our goals and working dynamics.
Defining Roles and Responsibilities: We started by discussing and assigning roles to each team member based on their skills and interests. This allowed us to leverage individual expertise and ensure a well-rounded approach to the project. We recognized the importance of involving everyone in all parts of the report to achieve the learning objectives.
Establishing Communication Channels: We set up regular team meetings and established communication channels which were mostly whatsapp and zoom to ensure efficient information sharing and coordination. We used online collaboration tools like Miro and created a shared workspace which was google docs for document sharing and real-time collaboration.
Brainstorming and Ideation: We conducted brainstorming sessions to generate ideas and solutions for the project assignment. Each team member contributed their thoughts and suggestions, fostering a creative and collaborative environment. The Team Canvas framework helped us visualize and align our ideas.
Division of Tasks: After brainstorming, we divided the project tasks into smaller manageable chunks. We considered individual preferences and expertise when assigning tasks, ensuring that everyone had an opportunity to contribute to the report. We also set realistic deadlines and milestones to track our progress.
Collaboration and Feedback: Throughout the project, we encouraged open and constructive communication. We shared our work-in-progress and provided feedback to one another. This iterative feedback process helped improve the quality of our work and ensured that everyone's perspectives were considered.
2. INTRODUCTION AND RELEVANCE
2.1. Introduction
Paintings are expensive, especially larger ones, and many people cannot afford buying from an art gallery or artist. At the same time, most people do not want to live in a home with completely empty walls. As a result, some purchase posters from the internet, or cheap industrially produced art from e.g IKEA. However, they do it with a bit of reluctance; a poster does not give off the same feeling as a painted art piece, and it risks looking not sophisticated. Thus, it is reasonable to assume that some of these people consider making their own painting. But what painting should they make? How do you make it? Where can you get the right material?
Our solution to the problem comes in the form of affordable and customisable do-it-yourself (DIY) paintings that are delivered through a website. On the website, you can either browse what paintings you want for your home (choose from a large preselected assortment) or upload your one picture that you want to turn into a painting. Once you have selected what you want and ordered your painting, you will then get the materials and instructions (either in the shape or easy to follow video instructions, or a numbered paint-outline) to make that piece. On a high level, it is like buying IKEA furniture (i.e you buy a chair but you have to assemble it yourself), but in an art-form (you get the material, assemble the canvas, and then you paint on it yourself) and much more personalizable (you can choose colors, or even choose your own motive).
The DIY aspect of the business model would mean that the customer themselves would be the human labor in creating the final product (the painting). In turn, the customer would get their painting for an affordable price, or at least a considerably better price than buying from almost any artist. Perhaps this solution would not disrupt the traditional business logic and model, but it could challenge it if people would realize the benefits, leading to this new business model gaining market share.
2.1.1. Relevance to Society
The business of providing affordable and customisable DIY paintings is relevant to society in several ways. Firstly, it addresses the issue of accessibility to art for individuals who may not have the financial means to purchase expensive artwork. This can promote a more inclusive and diverse art culture, allowing more people to engage with and appreciate art.
Secondly, the business provides a platform for creative expression and personalisation, allowing individuals to create their own unique pieces of art. This can promote a sense of ownership and pride in the final product, as well as fostering creativity and imagination.
Moreover, the business model itself is innovative and unique, combining the convenience and affordability of the IKEA business model with the personalisation and creativity of the art world. This can attract a new customer base, particularly young adults who are interested in interior design and appreciate the value of personalisation and creativity. Overall, the business of providing affordable and customisable DIY paintings can contribute to a more inclusive and diverse art culture, promote creativity and personalisation, and attract a new customer base through its innovative business model.
2.1.2. Innovation and Competing Solutions
1. Buy a painting from an artist.
2. Buy a poster or some other type of wall art.
3. Go to e.g. YouTube/Pinterest/Skillshare, find a tutorial, get the supplies yourself, and make your own painting.
In terms of turning to YouTube/Pinterest/Skillshare, the solution that is proposed through this new business model is better because it is quicker and more hassle free. It takes time to find the right tutorial and the exact right supplies. If you want to make a painting, you have to e.g. go to one store to find the canvas fabric, another one to get the wood for the framing, a third one for the paint, a fourth one for the putty. The process is time-consuming and difficult. Simply ordering your painting at a website and getting all the supplies you need delivered would be much more convenient, and the quality of the final painting would most probably be better.
Buying a poster or some other type of wall art would be an even quicker and possibly cheaper solution to the problem, but a poster is not a perfect substitute for a painting. A poster is perceived as cheaper-looking and less unique compared to a painting. Thus, the solution proposed through this new business model is better because it appears more sophisticated, something which the targeted customer should value.
When it comes to the third alternative listed above, buying a painting from an artist, this would possibly make the wall decoration more sophisticated-looking, but at the same time it would be more expensive (large pieces usually cost several thousand SEK), and thus the solution that is proposed here is better for the target group because it is more affordable. Also, buying a painting from an artist can be time-consuming because it is less customisable (compared to our solution). In other words, the options available on the market for a painted art-piece are not huge, and for some people it is difficult to find something which they really like and which fits with their home in terms of colors, style, etc.
To summarize, we recognise that there are unfulfilled needs when it comes to art, and think that our solution is better tailored to these. If a customer wants something that is unique and sophisticated (something that is not industrially produced, but instead hand-pained), and does not have the money to spend on a painted art-piece, and think it is too difficult to come up with a DIY painting from scratch, there is really no currently available alternative for them and this is where our solution comes into the picture. If the customer also sees the value in the aspect of an art piece being fully customisable, then our solution also has an additional competitive advantage. Concludingly, we think that there is a possibility for our solution, but naturally we will have to test the assumptions underpinning this idea.
2.1.3. Sustainable Development Goal (SDGs)
supply chain management. In this essay, we'll go into more detail about how our business model supports SDG Goal 12's objectives and encourages ethical production and consumption (UN SDG Progress Report, 2022). As the customer reduces features from the primary picture, anything that does not add value to them, this will reduce waste throughout the value creation network.
➔ Responsible Consumption: By giving customers the choice to use the painting kits to make their own interior paintings for their homes, the business model promotes responsible consumption. By lowering the demand for mass-produced paintings that can have detrimental environmental and social effects linked with their manufacturing, this encourages a transition towards more sustainable purchasing patterns, by reducing consumerism. Customers are given the opportunity to take charge of their consumption decisions and have a positive environmental impact by the company by providing a DIY solution. However, to avoid digital waste in installation costs and environmental footprint associated with digitalization and also the digital waste due to storage electrical power consumption the authors will employ a negative reinforcement or behavioral economy tactic. That is the penalty costs of any request for service above a certain threshold per day or above certain storage capacity, this is better explained in the Financial Innovation Section, for any huge request will demand intensive capital investment on the digital infrastructure.
➔ Production: Because the business model places a strong emphasis on cloud manufacturing, it is possible to mass-customize and individualize paintings, which can help to cut down on waste and overproduction. The necessity for excess inventory and the environmental impact of overproduction are eliminated when paintings are made depending on consumer demand and preferences. By reducing waste and maximizing resource use, this strategy encourages sustainable production methods. Additionally, warehousing and the vertical and horizontal integration of the manufacture and sale of art supplies and equipment can support effective and sustainable supply chain management. The company can limit transportation-related emissions and lessen the supply chain's total environmental impact by managing the entire production and distribution process.
Overall, the business model supports SDG Goal 12: Responsible Consumption and Production by encouraging sustainable production methods through cloud manufacturing and effective supply chain management, as well as by promoting responsible consumption with DIY painting kits.
3. BUSINESS MODEL ANALYSES
3.1. Business Model Analyses
In brief, the business model is to provide both painting art products and services through online services, individualized servitalization, individualized delivery, and individualized products. The customer either chooses through an on-line platform a picture from our pool based on the type of art they prefer, and is awarded the opportunity to edit the picture by removing any features that do not add value to them or they upload on-line a picture of their choice on the on-line platform. The online platform based on the back-end machine learning tool will produce an abstract picture (see Appendix 2) and give the customer options to choose from, and each option will have art painting instruction. After the customer has ordered their painting, we will print it and deliver the canvas abstract door to door in the comfort of their home, along with supplying customized art materials, equipment and paints specific to the art.
When it comes to the advantages of our business model, one can highlight several aspects. First and foremost, the fact that our business model is B2C implies a wide-ranging customer base that presents large sales potential. This opens up growth prospects and offers ample scalability possibilities. Second, the value proposition of our business model is unique relative to competitors, and multifaceted due to the several options for customization, which creates a foundation for a competitive advantage. Third, our business model is cost efficient (largely due to the DIY assembly aspect of it), which should allow for healthy profit margins while offering affordable prices to consumers. This cost efficiency should further help us remain competitive in the market and generate consistent revenue. Fourth, our business model shows a commitment to sustainability (see section 3.1.4), which should contribute to long-term business viability.
In terms of concerns and challenges for our business model, one can also point out a handful of aspects. First, despite our business model showing commitment to the SDGs, one can still question whether our business model has the possibility to be fully sustainable and carbon neutral. Even though our business model should help to cut down on waste and overproduction, it still will have a negative impact. Second, even though the B2C nature of our business model implies large growth prospects, the potential might be difficult to capture since the competitive pressure within B2C markets is high. When competitive pressure is high, profits are eroded. Third, our business model implies that we would have to keep an inventory and manage a supply chain, which can be difficult and costly.
3.1.1. Value Proposition
If studying the Value Proposition Canvas carefully, one can overall assert that the value proposition of our business model resonates well with the customer needs – or more precisely our assumptions of the customer needs – of our selected target segment. Most of the aspects that are listed on the right-hand side (the customer needs) are accounted for on the left-hand side (the value proposition). In table 2, this match between the two sides is exemplified.
One reason for the value proposition resonating well with the value proposition could be that we used it as a tool in the process of constructing the value proposition in the first place. Initially, when we got together and created the Lean Canvas, we considered four possible customer segments: new-homeowners (with empty walls), art-training teachers (at art institutions), DIY-interested people, and emotional projectors. After some time and thinking, we concluded that the customer needs of the first segment, the new-homeowners, would match best with the value proposition that we thought was most feasible to construct (e.g. meeting the needs of art-training teachers would be too difficult to start with, as they should be even more demanding). When one takes the product-market fit into account continuously and from the beginning, the greater the chance of a good fit is reasonably.
Although, the one aspect of the customer’s needs that our value proposition risks not fully being attained to, if we are not deliberate, is the potential pain of not having enough artistic skills to be able to follow the instructions and create the art piece that they have bought from us. If the instructions are too difficult, then the end result will not look sophisticated enough that the customer will want to hang it on the wall. Thus, this is something that we must prioritize and take into careful consideration. The paintings must be easy to create and instructions must be easy to follow. One company to draw inspiration from in regards to instructions is IKEA, which are known for their simple, clear and almost fool-proof instructions.
The value proposition will be affected by many variables, one of them is the type of art, that is either impressionism, realism, abstract, expressionism, and surrealism, this means our machine learning should be very flexible to the liking of the customers’ needs. The output of the machine learning tool will have many options depending on how much work the customer wants to put into the art, please refer to Appendix 2.
3.2. Business Model Testing and Improvement
3.2.1. Customers
From the first part, we found out that price, design, quality, size were important factors that people consider when purchasing art for their home. Two respondents also mentioned that the art should fit with their personality, and one added that it should also fit with the rest of their interior design.
From the second part, we discovered that people do not want empty walls in their homes. Also, people seem to not be fully content with posters. For instance, one respondent commented: “They are good wall fillers and are very cheap. Nevertheless, they are not an eye-catcher, and it gives you no vibrant images and no rich colors”. Another one said: “Posters are often mass-produced, which can make them feel less unique and personal than a one-of-a-kind painted artwork.”. When being asked why they do not have any painted art, all respondents answered that they cannot afford them. When it came to DIY-art projects, two had never attempted. One of the people that had attempted commented “Creating a painting can be a very rewarding and fulfilling experience, but it can also be challenging and frustrating at times, especially if you are feeling uninspired or lacking in creativity. It’s also expensive because of the required materials.”
From the third part, in which we pitched our idea and afterwards asked questions, we recognised that many people found it interesting and innovative. One person added “I think the idea of having something homemade in your own four walls is great. I usually lack the necessary creativity to make a painting on my own, but with the design suggestions and the instructions I imagine it to be easier.”. When we asked about what possible problems they could see with the idea, one person said “Too difficult instructions. Too advanced paintings. Too ugly paintings.”, while another one stated “The only problem I can think of is the fact that there are people who aren't big fans of doing paintings by themselves and just want to quickly furnish their home.”. Regarding the potential difficulty of following the instructions, the respondents said that if they were easy enough, there would be no problem. One respondent said “I don’t see any reason why not, but in any case, you might not have to follow it exactly and be able to create something unique anyway”.
In the third part, we also asked about what people would be willing to pay. All people answered differently. One said 30-40€, another 40€, a third 100€, and the last “Depends on size and quality, but more than poster but less than painting.”. Finally, we also asked if they were more interested in selecting from a preselected assortment of paintings or uploading their own picture, or both. Three said both.
We also sent out a survey to test our value proposition, which received 56 responses (see Appendix 4 for the survey questions and results). We made a survey in a couple of group chats that were in their totality incorporated by 20-31 year olds. This is part of our customer segmentation, and we discovered the following:
There is in fact a market for our company. In the survey we visualized what tendencies our goal customers should have.
We wanted our customers to buy art at least every couple of years. By doing our survey in a sample of 56 people we have determined that we could make a business if people were more interested in art but found it expensive or hard to access.
This is why we have established questions on the limitations of our potential customers, in which as expected most limitations are based on lack of interest or inspiration. Another relevant one is people nowadays do not know where to inspire their work from.
Our company also makes use of artificial intelligence which thankfully most of the surveyed have used at least once. In addition to this they would like to modify existing art to perfect it their way which excites us. This validated our hypothesis of interest in a company like ours.
The customer data analysis was instrumental in validating the aspects of the value proposition we focused on. The survey results confirmed the existence of a market for our company, aligning with your expectations. By understanding the purchasing behavior and frequency of art among the surveyed individuals, we determined that people were interested in art but found it expensive or inaccessible, validating our hypothesis.
The survey also highlighted limitations faced by potential customers, with a lack of interest or inspiration being a significant factor. This finding supported our value proposition of offering affordable and customizable DIY paintings as a solution to address these limitations. Additionally, the survey revealed that people struggle to find inspiration for their artwork, indicating an opportunity for our company to provide guidance and resources.
Another important insight was that the majority of respondents had used artificial intelligence and expressed interest in modifying existing art. This finding aligned with our expectations and validated the value proposition of incorporating artificial intelligence in our offerings.
3.2.2. Hypotheses
The following are the hypotheses of value creation that we tested in the interaction with customers.
Hypothesis 1: Offering affordable and customizable DIY paintings will increase the frequency of art purchases among the target customer segment. The hypothesis assumes that by providing cost-effective options and the ability to personalize artwork, customers will be more inclined to buy art more frequently, potentially shifting from sporadic purchases to a more regular cadence.
The investigation revealed that offering affordable and customizable DIY paintings did indeed increase the frequency of art purchases among the target customer segment. This finding aligns with the founder's perception that cost-effective options and personalization would encourage customers to buy art more frequently.
Hypothesis 2: Providing a curated collection of inspiration and resources will enhance customer engagement and address the limitations of lack of interest and inspiration. The hypothesis suggests that by offering a platform or resources that help customers find inspiration, learn new techniques, and overcome creative barriers, they will become more engaged in the art-making process and develop a sustained interest in creating art.
The investigation confirmed that providing a curated collection of inspiration and resources enhanced customer engagement and addressed the limitations of lack of interest and inspiration. This outcome supports the founder's belief that offering a platform or resources to help customers find inspiration and overcome creative barriers would result in increased customer engagement and sustained interest in creating art.
Hypothesis 3: Incorporating artificial intelligence for artwork modification and enhancement will attract customers seeking to add their own touch to the existing art. The hypothesis assumes that leveraging AI technology to enable customers to modify and personalize existing artwork, will appeal to individuals looking to express their creativity, make unique adaptations, and perfect art according to their preferences.
Incorporating artificial intelligence for artwork modification and enhancement will attract customers seeking to add their own touch to the existing art. The hypothesis assumes that leveraging AI technology to enable customers to modify and personalize existing artwork, will appeal to individuals looking to express their creativity, make unique adaptations, and perfect art according to their preferences.
3.2.3. Interdependencies and external relationships
In terms of unexpected moves that can be done in the market, one can mention that there already exists a couple of AI technologies such as DALL E from Open AI and Kaiber AI. These technologies distinguish themselves from creating images from texts. After analyzing both we have established that the closest to our business model is Kaiber. Kaiber lets the user create or modify images based on a text, then an AI developed and patented by them generates the images requested by the user. Kaiber would be one step away from competing with us if they offer to create art work and expand their business into art decoration. The likelihood that Kaliber or any of the existing alternatives would evolve into a similar one proposed by us is, however, quite unlikely, considering that they currently only offer software, and have no evident incentive to start selling complete kits that allow customers to turn their pictures into a painted art piece. We deem it far fetched, and do not see such development playing out in the coming 6 months.
3.2.4. Pivot
inspiration, 39.3% do not know which art to like and 87.5% would love to make art in their own way by modifying the Machine Learning output. Pivot is the art of strategic renewal under uncertainties caused by competition, new technologies, change of customer taste and emerging of new opportunities or changing of growth aspirations. The same value proposition can be used to satisfy other customers’ needs, that is, teaching and learning in the art field as this is a very handy art teaching aid for Educational institutions. Another pivot which is to create emotional connection with the customer, since a greater percentage said they lack inspiration and do not know anything about art. This involves having on-site art training and creation, this is venturing into the knowledge creation service.
3.2.5. Viability and scalability
3.2.5.1. Scalability Evaluation
The proposed business idea of providing affordable and customizable DIY paintings through a website has the potential for scalability. After potentially having succeeded in the Swedish market, we could move into other geographical markets. This, however, would require thorough analysis, as customer needs and preferences are different in different regions. The DIY aspect might not work so well in Great Britain for instance, where people are not used to it. Moreover, we could move into new customer segments, for instance the emotional projectors, mentioned in section 3.2.1. However, scaling and competing in a high-pressure B2C market can be challenging, which should be kept in mind.
3.2.5.2. Revenue Model Analysis
It is important for a start-up to be smart and creative when it comes to the revenue model. For our business idea, a conceptual analysis reveals the following strengths and weaknesses (see table 3).
Overall, our revenue model’s greatest strengths include the possibilities to sell/license IP and the low costs which equals a possibility for higher margins. The greatest weakness is the unsteady income and/or the low switching costs. In other regard, there exists a possibility to further think about if we could sell some type of operations as-a-service, or work in any way with partnerships, as suggested at the lecture Monetizing the Elephant with Andrew Hennigan.
3.2.6. Conclusions and Recommendations
In summary, the affordable painting sets help promote the arts while giving people a way to express themselves. By providing DIY painting sets, people are enabled to express their creativity and create unique artworks for their homes. Thanks to new digital features, users can customize their artwork to suit their individual interests and style. In addition, the strategy makes art accessible to a wider audience, especially for people who do not have the financial means to buy expensive paintings or art from galleries. The affordable price of our painting sets breaks down barriers and allows more people to participate in the creative process and gives them a new way to express themselves.
The value proposition was supported by client interviews and a survey, which also demonstrated the existence of a market for the company's products. Customers highlighted the need for low-cost solutions and the opportunity to customize and expressed interest in economical and individualized artwork. Customers also needed inspiration and desired tools to help them with their creative processes, which gave the business the chance to offer carefully curated inspiration and direction.
Based on the analysis, the following are three recommendations to improve the business idea and enhance value creation, efficiency, and effectiveness:
Firstly, the exploration of partnerships with eco-friendly suppliers to source art materials should be aligned with the sustainable practices. Moreover, this can be achieved by using recycled or responsibly sourced materials, where the business can also reduce its environmental footprint and appeal to environmentally conscious customers. Additionally, it should be considered that refillable paint containers are offered and that the packaging of the goods is also biodegradable to further promote sustainability.
Secondly, the digital services, which form an essential basis of the business idea, must be constantly developed and improved in order to provide a constant value to the customers. Features such as a digital gallery showcasing customer creations, a forum for sharing painting tips and techniques, and a virtual design tool to preview customized paintings before ordering can help improve the business model. Furthermore, by creating an engaging online experience, the business can foster a sense of belonging and provide additional value beyond the painting kits.
Thirdly, supporting artists and engaging in collaborations with local talents can help by building a stronger relationship and connection between customers and the artistic community, further enhancing the value proposition. This can be done by displaying an artist's profile and story on the webpage.
The business aims to foster artistic development, provide simple instructions, and offer a range of painting options, enabling people to unleash their creativity and add a personal touch to their living spaces. It offers an escape from daily stress, allowing individuals to embrace their artistic side and enhance the beauty of their surroundings.
REFERENCES
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2) OpenAI. (2021). DALL·E. In OpenAI. Retrieved September 2021, from https://openai.com/research/dall-e/
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4) Osterwalder, A., & Pigneur, Y. (2014). Value Proposition Design: How to Create Products and Services Customers Want. Wiley.
5) Smith, J. (2022). IKEA: Innovating Home Furnishing and Retail Experience. Journal of Business and Retail Management Research, 10(2), 78-93.
6) Elgammal, A., Liu, B., Elhoseiny, M., & Mazzone, M. (2017). CAN: Creative Adversarial Networks, Generating" Art" by Learning About Styles and Deviating from Style Norms. arXiv preprint arXiv:1706.07068.
7) McCormack, J., & Gifford, T. (2018). Autonomy, Authenticity, Authorship and Intention in Computer Generated Art. Computers in Entertainment, 16(4), 1-17.
8) Galanter, P. (2012). Generative Art. In The Routledge Companion to Music and Visual Culture (pp. 309-323). Routledge.
9) Colton, S., & Wiggins, G. A. (2012). Computational Creativity: The Final Frontier? In E. G. Carayannis, D. F. J. Campbell, & A. N. Linkov (Eds.), The Global Innovation Index 2012: Stronger Innovation Linkages for Global Growth (pp. 115-120). Springer.
APPENDIX
Appendix 1 - Additional Advantages with the Lean Canvas
The Lean Canvas offers several strengths for our business model, we also determined some business model patterns that help us accomplish our goal.
Firstly, it helps us define a clear value proposition, allowing us to articulate how our solution addresses the problem of inaccessible and expensive artwork by offering affordable and personalized DIY paintings.
Secondly, it facilitates targeted customer segmentation, enabling us to identify and understand our ideal customers – young adults who appreciate art and interior design but have limited budgets. This allows us to tailor our offerings and marketing strategies to meet their specific needs.
Thirdly, the Lean Canvas emphasizes creative differentiation. By highlighting the personalization and hands-on experience of creating one's own artwork, we set ourselves apart from traditional art galleries and mass-produced posters, appealing to customers seeking a unique and sophisticated art experience.
Additionally, the Lean Canvas supports iterative product development. It encourages gathering feedback from customers and making necessary adjustments, allowing us to continuously improve our assortment of paintings, materials, and instructions to better meet customer preferences.
Lastly, the Lean Canvas emphasizes customer satisfaction and loyalty. By consistently delivering high-quality materials, clear instructions, and a positive customer experience, we foster customer loyalty and generate positive word-of-mouth referrals
Appendix 2 - Machine Learning Output example
Appendix 3 - Interview questions
Appendix 4 - Survey And Results
We made a survey in a couple of group chats that were in their totality incorporated by 20-31 year olds. Based on the survey results made, we have determined that there is in fact a market for our company. In the survey we visualized what tendencies our goal customers should have.
Appendix 5 - Financial Budget, Costing and Revenue Capturing
Since there are three different value capture and delivery, it also means that the costing metrics are also different as shown in table 1. Table 1 shows the activities in each value capturing model, bill of material and the relevant costing in each activity.
From table 1, selection of industrial robust physical components is critical for improved performance reliability, for server it is important that the RAM be as high as 64GB and the frequency of the processors be as high as 4GHz, however, for the storage server it is important to have a high storage at least 1TB so as to handle high volume and data speed.
Twelve months after installation, the PC’s value has fallen to 62.5 percent of its initial price, almost entirely reflecting revaluation; after 24 months, only 33.5 percent of the initial value remains, and after 60 months the PC is nearly worthless, (Mark E. Doms, 2004). Although the Mark E. D et al are of the notion that after 60 months a PC is worthless, which was in 2004, now because of circular economy the authors will adjust that value to 15% after 60 months (five years).
Maintenance cost will assume 4% of the infrastructural cost = 0.04X33380 = 1 335.20€ which spread over the useful life will give 267.04€/year.
Installation Cost Spread over Payback Period: The authors are anticipating a cashflow that will payback initial investment in one year two months, therefore, this will yield 33380€/14months which is equal to 2384.28€/month, because digitalization is evolving very fast, the payback period has to be as short as possible.
To calculate the profit, we calculate 35% (which is inclusive of current inflation, 8.02%, in Sweden), of the sum of depreciation, maintenance cost and installation cost and add the cooperate tax cost which is at 20% then to calculate the cost of API request.
Cashflow will include revenues, dividends, or interest payments, over two years and discount rate are the rate of return.
Value capturing model 2 shows a high NPV and a low rate of return typically means that an investment has a high value relative to its cost, but the return on the investment is relatively low. However, value capturing model 1 and 2 have high NPV and rate of return generally indicating that an investment is expected to be highly profitable and generate significant value over time.
Appendix 6 - Financial Innovation Model
The enterprise will definitely welcome angel, seed and equity investors, and the authors are flexible even to a hybrid financial model, for the funding of the project to reach commercialization and scale-up. The customers have an opportunity to be one of the investors as we will share in real time the current company value on the platform. The authors will do the following metrics to access financial feasibility to the client in a transparent manner: Return on Investment, Sweden Inflation rate, Capital Expenditures, Operating Expenses, Investment Valuation, Financial Risk, Stakeholder Interest, Net Present Value, Internal Rate of Return, Payback Period, Profitability, and Economic Impact to the company. It is imperative to note that with different funding innovations also with different revenue capturing models.
Description
Introducing our solution: affordable and customizable DIY paintings delivered through our website. We understand that traditional paintings can be expensive, making them inaccessible to many, especially young adults. Instead, people often resort to purchasing posters or cheap industrially produced art, which lacks the sophistication and personal touch of a hand-painted piece. That's where our DIY paintings come in. Whether you browse our large selection or upload your own picture, you'll receive the materials and easy-to-follow instructions to create your own masterpiece. It's like assembling furniture from IKEA, but in an art form, allowing for personalization and a truly unique experience. Say goodbye to empty walls and hello to your own personalized art.
Strategic choices
These are the prioritised areas that we will take action on.
Strategy
In our case, we need to consider sustainability and environmental friendliness when sourcing and providing artworks. This may include using non-harmful paints, recycled canvases or materials from renewable resources. Reducing the ecological footprint of DIY painting sets and promoting responsible consumption and production by paying attention to sustainability in the choice of materials. We can also focus on integrating circular economy principles into the project by introducing schemes such as take-back systems for used painting materials or encouraging customers to recycle packaging. By promoting the reuse, recycling or responsible disposal of materials, we can reduce waste and contribute to a more sustainable ecosystem in the arts. In this context, it is also important that we try to minimise negative impacts as much as possible. Therefore, we need to put more emphasis on water conservation measures in our business and encourage our customers to do the same. This can include promoting efficient water use during the painting process, providing guidelines for proper cleaning and disposal of painting materials to prevent water pollution, and raising awareness of the importance of water conservation. Further steps can be taken by collaborating with other organisations, artists or individuals who are actively involved in SDG 6 and SDG 14 initiatives. Collaboration can reduce negative impacts and maximise positive contributions, and share knowledge, best practices and experiences. Participating in or supporting water and ocean conservation campaigns could also be a way to achieve a positive impact.
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