Study on smart startup business in preventive medicine using business model canvas

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH --- DƯƠNG CÔNG ĐỨC STUDY ON SMART - STARTUP BUSINESS IN PREVENTIVE MEDICINE USING BUSINESS MODEL CANVAS NGHIÊN CỨU MÔ HÌNH KINH DOA

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

DƯƠNG CÔNG ĐỨC

STUDY ON SMART - STARTUP BUSINESS IN PREVENTIVE

MEDICINE USING BUSINESS MODEL CANVAS

NGHIÊN CỨU MÔ HÌNH KINH DOANH KHỞI NGHIÊP THÔNG MINH TRONG LĨNH VỰC Y TẾ DỰ PHÒNG SỬ DỤNG

MÔ HÌNH CANVAS

LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

HÀ NỘI - 2019

ĐẠI HỌC QUỐC GIA HÀ NỘI KHOA QUẢN TRỊ VÀ KINH DOANH

-

DƯƠNG CÔNG ĐỨC

STUDY ON SMART - STARTUP BUSINESS IN PREVENTIVE

MEDICINE USING BUSINESS MODEL CANVAS

NGHIÊN CỨU MÔ HÌNH KINH DOANH KHỞI NGHIÊP THÔNG MINH TRONG LĨNH VỰC Y TẾ DỰ PHÒNG SỬ DỤNG

MÔ HÌNH CANVAS

Chuyên ngành: Quản trị kinh doanh

Mã số: 60 34 01 02 LUẬN VĂN THẠC SĨ QUẢN TRỊ KINH DOANH

NGƯỜI HƯỚNG DẪN KHOA HỌC: TS PHẠM VĂN HỒNG

HÀ NỘI - 2019

APPRECIATION

I own debt of gratitude to many people who helped to complete this master thesis First and foremost, I would like to give a special thanks to my instructor, Dr Pham Van Hong, whose supervision helped to guide me during the elaboration of the thesis and understand better the topics I should develop

My deep thanks in specific to Hanoi School of Business and Management, Hanoi National University for the best learning environment for

me to get more knowledge and improve professional skills

Finally, I would like to thank my friends and family for all the support, feedback and encouragement transmitted during these last months which were fundamental to help me keep emotionally stable and enthusiastic about my work

Author

Duong Cong Duc

TABLE OF CONTENTS

COMMITMENT i

APPRECIATION ii

LIST OF ABBREVIATIONS v

LIST OF TABLES vi

LIST OF FIGURES vii

PREFACE 1

CHAPTER 1: THEORICAL AND RESEARCH MODEL 7

1.1 Startup & Smart – Startup 7

1.1.1 Startup concept 7

1.1.2 Overview of Smart – Startup business 7

1.1.3 Overview about Data Warehouse System in Smart – Startup 9

1.1.4 Smart – Startup‘s field of operation 17

1.2 Business Model Canvas 20

1.2.1 Concept of Business Model 20

1.2.2 Background of Business Model Canvas 22

CHAPTER 2: REASEARCH METHODOLOGY 31

2.1 Desk Review (secondary data) 31

2.2 Primary data 31

2.3 Expert Interview 33

2.4 Focus Group 33

2.5 Location and time of study 34

CHAPTER 3: REALITIES OF SMART- STARTUP BUSINESS IN PREVENTIVE MEDICINE 35

3.1 Preventive Medicine Industry in Vietnam 35

3.1.1 Current situation of preventive medicine industry in Vietnam 35

3.1.2 Vietnamese people health status and the disease pattern 38

3.2 Build Canvas Model for SMART STARTUP 40

3.2.1 Customer Segments 40

3.2.2 Key partners 41

3.2.3 Value prosition: 42

3.2.4 Channels 43

3.2.5 Revenue stream: 43

3.2.6 Customer Relationship 46

3.2.7 Key activities 46

3.2.8 Key resources 47

3.2.9 Cost structure 54

3.3 Smart startup analysis of financial performance 56

CHAPTER 4: RECOMMENDATIONS 60

4.1 Governance guidelines 60

4.2 An integrated system 61

4.2.1 An integrated information system 61

4.2.2 Benefits of the integrated system 62

4.3 Modeling the quality of services provided by providers of preventive medicine services 63

4.4 Training employees to make coordinated, cross-functional working staff 63

CONCLUSION 64

REFERENCES 65

APPENDIX A 70

APPENDIX B 73

ETL Extraction, Transformation, and Loading

Medicine

NEPI Nationcal Expanded Immunization Program

SMIS Preventive medicine information systems

LIST OF TABLES

Table 1.1: Business model canvas elements and descriptions 24

Table 2.1: Interview description 33

Table 3.1 : Revenue Implementation Roadmap: 43

Table 3 2: Revenue utility for mobile subscribers 44

Table 3.3: Online application revenue on mobile 44

Table 3.4: Software rental revenue 45

Table 3.5 : Total revenue 45

Table 3.6: Initial investment 55

Table 3.7: Annual operation cost 55

Table 3.8: Target market volumne and expected revenue 56

Table 3.9: Assumptions 57

Table 3.10: Target market share after 5 years 57

Table 3.11: Initial investment 58

Table 3.12: Annual operation cost 59

Table 3.13: Expectes Business effectiveness (5 years) 59

LIST OF FIGURES

Figure 1.3: DW Development Lifecycle (DWLC) Model (Demarest, 2008) 12 Figure 3.1: Preventative health chart 40 Figure 3.2: DW Architecture Design of SMART STARTUP startup 54

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PREFACE

1 The rationale of the study

The healthcare industry in Vietnam is at a very important juncture It is poised on the brink of a transformation, as it adopts new approaches, including technology, to help consumers manage their health in a better manner Preventive medicine is becoming an area of focus in most countries, and Vietnam is no different

Due to hectic schedules and lifestyle choices, healthcare takes a backseat for many people This results in the development of conditions that can be debilitating if not fatal unless they are monitored in a timely manner Stressful and unhealthy lifestyles have led to a significant increase in the incidence of diseases Given how skewed the doctor-patient ratio is in Vietnam, taking care of one's health becomes even more important This is where preventive medicine becomes relevant and Vietnam has an unprecedented opportunity to become a healthy nation with the ability to take the right preventive steps

As consumers continue to gain more awareness and access to healthcare information over the internet or via alternate mediums, the need for preventive medicine management system to establish shared data warehouse and supply value added services is obvious However, launching a new enterprise—whether it is a medical - tech start-up, a small business has always been a hit-or-miss proposition But recently an important countervailing force has emerged, one that can make the process of starting a company less risky It is Business Model Canvas, which is a strategic management template model, which helps to create or improve business strategy The business model canvas is a great tool to build a business model

in a straightforward, structured way for a startup, which in turn will lead to

in developing preventive medicine management system to establish shared data warehouse and supply value added services Therefore, the author

selected the topic " Smart - startup business in preventive medicine using Business Model Canvas" as the subject of research for thesis of master

2 Literature Review

In 2011 Eric Ries wrote a book called ―The Lean Startup‖ in which he documented inexorable logical and lean concepts applicable to start-up businesses The Lean Startup methodology and Business Model Canvas is now considered as a lifebouy for a startup in order to cut up wastes, make up

of its resources and build a proper financial plan

• Blank, S (2013) The Four Steps to the Epiphany

Blank was the pioneer in the field and the one who introduced the concept customer development describing the process for how entrepreneurs should test and refine business hypotheses through customer conversations His book, ―The Four Steps to the Epiphany‖ from 2013, in which he describes the process of customer development has become a must read for Silicon Valley entrepreneurs and is highly mentioned in the community

• Ries, E (2011) The Lean Startup: How Constant Innovation Creates Radically Successful Businesses, Penguin Group, London

Ries is a former student of Blank and has popularized the concept Lean Startup in his blog and subsequent book ―The Lean Startup‖ from 2008

He has received a lot of attention with this book and it was therefore natural to include him in the framework

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• Nathan, F and Paul, A (2011) : Nail It then Scale It: The Entrepreneur's Guide to Creating and Managing Breakthrough Innovation: The lean startup book to help entrepreneurs launch a high- growth business

Furr and Ahlstrom has gained a lot of attention in the field recently for their book ―Nail It Then Scale It‖ from 2011 They provide prescriptive and hands-on tips to the entrepreneur they are a good complement to Blank and Ries, and they are also respected in the Lean Startup Methodology community

• Brant, C and Patrick, V (2010): The Entrepreneur's Guide to Customer Development: A cheat sheet to The Four Steps to the Epiphany

Brant Cooper and Patrick Vlaskovits have received a lot of attention for their book ―The Entrepreneur‘s Guide to Customer Development‖ It is based on the work of Ries and Blank

• Ash, M (2012): Running Lean: Iterate from Plan A to a Plan That Works

Ash Maurya has written the book ―Running Lean‖ In this inspiring book, Ash Maurya take readers through an exacting strategy for achieving

a "product/market fit" for your fledgling venture, based on his own experience in building a wide array of products from high-tech to no-tech Throughout, he builds on the ideas and concepts of several innovative methodologies, including the Lean Startup, Customer Development, and bootstrapping

In Vietnam, the Lean Startup principles are not yet widely understood and very little research has been conducted on this topic

• Phan Anh, Bui (2012), Lean Startup research and application in Schlumberger Vietnam

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Phan Anh did his research in Schulumber Vietnam, a company in oil and gas field on Lean Manufacturer to give recommendation to improve manufacturing process of Schlumberger Vietnam

• Nguyen Thanh Minh (2013), Lean production and application to Vietnamese enterprises

Thanh Minh studied Lean Startup Methodology and experiences of foreign companies to give opinion and suggestion for Vietnamese enterprises

• Ngo My Tran and Vo Minh Tri (2016) :Application of management tools to enhance efficient efficiency in Universities of Can Tho

This research is aimed at identifying all types of wastes existed in the divisions of Can Tho University and then proposing an action plan to save costs and improve working efficiency in these divisions Expert interviews and a survery of 93 staff members were conducted The results indentified

10 types of wastes existing in these units including wastes of facilities and equipment, waste of labor, waste of not harnessing the creativity of staff members, waste of time, waste of defects, waste of transport, waste of motion, waste of information disconnection, waste of extra activity and was te of extra input Based on these results, an action plan with the application of 5S model of lean manufacturing to tackle tangible wastes (such as facilities and equipment) was proposed to remove existing wastes

in these divisions Some solutions on personnel and training were also proposed to support the implementation of the action plan

Although the Business Model Canvas model has been studied in many scientific works, the application of this model to a startup business in the field of preventive medicine in Vietnam is completely a noverty which have not been studied before Thus, based on previous studies, the thesis focuses on developing Business Model Canvas for start-ups in the field of

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preventive medicine, a new topic in the field of preventive medicine The theme is to develop a blueprint for the development of a new business startup based on the trend of Internet of Things

- What are the key elements in Business Model Canvas Plan for preventive medicine management system?

- What are the detail Business plan recommend for building Smart - startup business providing preventive medicine management system to establish shared data warehouse and supply value added services?

 Scope of study:

­ Research place: Vietnam preventive healthcare market

­ Time to expedite: from 2014 to 2017 All data are collected and analyzed from 2014 to 2017

7 Thesis Structure:

The thesis consists of 4 chapters:

Chapter 1: Theorical and Research Model

Chapter 2: Reasearch Methodology

Chapter 3: Realities of smart- startup business in preventive medicine Chapter 4: Recommendations

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CHAPTER 1: THEORICAL AND RESEARCH MODEL

1.1 Startup & Smart – Startup

1.1.1 Startup concept

Nowadays, it is not difficult to realize a real emergence of entrepreneurial spirit and more startup activities than ever before More and more people are looking for starting their own business rather than working for someone else to satisfy their own need and desire

According to Ries (2011), Startup is a human institution designed to create new products and services under conditions of extreme uncertainty

Or Dave McClure, an entrepreneur and angel investor who founded the business accelerator 500 Startups, said:

“A startup is a company that is confused about what its product is, who its customers are and how to make money”

Indeed, startup is a term used to describe a business working to make products or provide services to solve contemporary problems or serve current demands as the solution is not clear and the success is not guaranteed

1.1.2 Overview of Smart – Startup business

Smart – Startup is a start-up with an idea of building an overall Cloud computing solution in Preventive Medicine which consists of a solution to computerize all community health workers‘ job and a portal to help people track their family‘s immunization doses, to search on health education programs, and apply for early diagnosis of disease by screening and registry

to receive Notification SMS This system will have a web and a mobile application version so that end user can log in and use everywhere and everytime SMS services is supplied in kind of Bulk SMS with Brandname of sender (eg: YTDP Ha Noi) instead of showing mobile phone number so as to improve trust

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Our company name: Smart

Mission statement: taking care of people is at the heart of everything

we do Caring counts

Company goal and objectives: number one technology company in providing medicine services to all the people by combining expert – creation – technology

Products and services:

• The Preventive medicine information systems (SMIS) starts with issuing an ID number for a baby right in 24 hours after being borned and has the Hepatitis B first dose instead of waiting till having a birth registration certificate The ID number owner then will be informed with healthcare programs and early diagnosis of disease When deploying all over the nation,

it generates a national database in Immuzation and Vaccination that we can exploit and provide value-added services (VAS) relating to preventive medicine fields to the people starting with Immunization Notification SMS

• The SMIS are confidential, web-based, ID-based management, computerized databases that record all immunization doses and preventive medicine procedures administered by participating providers to persons residing within a given geopolitical area

• In the long term, this product will evolve into an ecosystem not only for Immunization but all other Preventive Medicine fields like Communicable diseases (CDs), Non – communicable diseases (CDCs), nutrion, school health, early diagnosis of disease … All base on the idea of having a ID in the centre and other management systems all around then provide VAS such as Immunization remind, notification SMS, Communicable diseases alert,… for people

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1.1.3 Overview about Data Warehouse System in Smart – Startup

1.1.3.1 Data Warehouse Concepts

Data warehousing is the process of collecting data to be stored in a managed database in which the data are subject-oriented and integrated, time variant, and nonvolatile for the support of decision-making Data from the different operations of a corporation are reconciled and stored in a central repository (a data warehouse) from where analysts extract information that enables better decision making

Data can then be aggregated or parsed, and sliced and diced as needed in order to provide information There are two main authors that are known in the world of data warehouse design, their approaches to some area of the data warehousing are different; William Inmon and Ralph Kimball The approach by Inmon is top down design while that of Kimball is bottom up design Most of the practitioners of Data warehouse subscribe to either of the two approaches

A Data Warehouse is a subject-oriented, integrated, time-variant, volatile collection of data used in support of decision making processes

non-―Subject Oriented‖ means that a data warehouse focuses on the high-level entities of the business and the data are organized according to subject

―Integrated‖ means that the data are stored in consistent formats, naming conventions, inmeasurement of variables, encoding structures, physical attributes of data, or domain constraints For example, whereas an organization may have four or fiveunique coding schemes for ethnicity, in a data warehouse there is only one coding scheme

―Time-variant‖ means warehouses provide access to a greater volume

of more detailed information over a longer period and that the data are associated with a point in time such as month, quarter, or year Warehouse data are non-volatile in that data that enter the database are rarely, if ever, changed once they are entered into the warehouse The data in the warehouse

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are read-only; updates or refresh of the data occur on a periodic, incremental

or full refresh basis Finally,‖nonvolatile‖ means that the data do not change

Data warehouse is the conglomerate of all data marts within the enterprise Information is always stored in the dimensional model Kimball views data warehousing as a constituency of data marts Data marts are focused on delivering businessobjectives for departments in the organization And the data warehouse is a conformed dimension of the data marts The data warehouse is the sum of all the data marts, each representing a business process in organization by a means of a star schema, or a family of star schemas of different granularity

Some of the Data Warehouse characteristics to include:

• It is subject-oriented

• It is non-volatile

• It allows for integration of various application systems

• It supports information processing by consolidating historical data

• Data is stored in a format that is structured for querying and analysis

• Data is summarized DWs usually do not keep as much detail as transaction-oriented systems

1.1.3.2 The Data Warehouse Data Model

There are three levels in data modeling process: High-level modeling (called the ERD, entity relationship level) which features entities, attributes and relationships, Mid-level modeling (called the data item set) which is data set by department, and Low-level modeling (called the physical model) optimize for performance

After the high-level data model is created, the next level is established—the midlevel model For each major subject area, or entity, identified in the high level data model, a midlevel model is created Each area

is subsequently developed into its own midlevel model

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The physical data model is created from the midlevel data model just

by extending the midlevel data model to include keys and physical characteristics of the model At this point, the physical data model looks like a series of tables, sometimes called relational tables

There are things that can be used to differentiate the DW from an ordinary archive database which can easily become a dumping ground Data is conformed (Data elements are conformed so that the definitions of "customer" or "revenue" mean the same thing no matter where the originated), Data is historical (view of the business at a particular point in time), Data is shared (Can be queried or otherwise accessed has little value), Data is comprehensive (Can be captured and consolidated from multiple systems)

1.1.3.3 DW Modeling Techniques

Database warehouse modeling is the process of building a model for the data in order to store in the DW There are two data modeling techniques that are relevant in a data warehousing environment are Entity Relationship (ER) modeling and dimensional modeling

ER modeling produces a data model of the specific area of interest, using two basic concepts: entities and the relationships between those entities Detailed ER models also contain attributes, which can be properties of either the entities or the relationships

Dimensional modeling uses three basic concepts: measures, facts, and dimensions Dimensional modeling is powerful in representing the requirements of the business user in the context of database tables Measures are numeric values that are can be added and calculated

1.1.3.4 Developing Data Warehouse

Planning the developing and deployment of a standard data warehouse should be taken as an IT project, hence what made IT project fail applies also applies when developing data warehouse; thus the need for Project Planning

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and following the system development life cycle There is the need for careful planning, requirements specification, design, prototyping and implementation The cyclical model entails five stages which are described below

Figure 1.3: DW Development Lifecycle (DWLC) Model (Demarest, 2008)

Where the Design stage takes information from both available data inventories and analyst requirements and analytical needs, of robust data models and turns it into data marts and intelligent information The Prototype deployment stage, where group of opinion-makers and certain end-user clientele, are brought in contact with a working model of the data warehouse

or data mart design, suitable for actual use The purpose of prototyping shifts,

as the design team moves back and forth between design and prototype Deploy stage is the stage of formalization of user-approved prototype for actual production use The Operation is the dayto-day maintenance of the data warehouse or mart, the data delivery services and client tools that provide analysts with their access to warehouse and the management of ongoing extraction, transformation and loading processes that keep the warehouse current with respect to the authoritative transactional source systems

Design

Prototype

Deplay Operate

Enhance

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Enhancement stage is where external business conditions change discontinuously, or organizations themselves undergo discontinuous changes enhancement moves seamlessly back into fundamental design, if the initial design and implementation did not meet requirements

1.1.3.5 Business Intelligence Concepts

Initially, BI was coined as a collective term for data analysis tools Meanwhile, the understanding broadened towards BI as an encompassment of all components of an integrated decision support infrastructure In BI systems, data from OLTP is combined with analytical front ends to ―present complex and competitive information to planners and decision makers‖

A central component of BI systems is the data warehouse (DW), which integrates data OLTP for analytical tasks

From the managerial approach, BI is seen as a process in which data from within and out the organisation are consolidated and integrated in order to generate information that would facilitate quick and effective decision-making The role of BI here is to create an informational environment and process by which operational data gathered from transactional systems and external sources can be analyzed and to reveal the ―strategic‖ business dimensions From this perspective emerge concepts such as ―intelligent company‖: one that uses BI to make faster and smarter decisions than its competitors

―Intelligence‖ means reducing a huge volume of data into knowledge through a process of filtering, analyzing and reporting information

The technological approach presents BI as a set of tools that supports the storage and analysis of information The focus is not on the process itself, but on the technologies that allow the recording, recovering, manipulation and analysis of information

Whether managerial or technological, there is one shared idea among all these studies: (1) the core of BI is information gathering, analysis and use

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and (2) the goal is to support the decision making process, helping the company‘s strategy Taking into account the scarce literature, we looked for other areas that could help us reach a more comprehensive understanding of BI

We find contributions in three distinct topics: information planning, balanced score card and competitive intelligence Here are some benefits that business intelligence offers and how they can help the entertainment industry

to make and distribute creative substance and stay aloft of the game:

• Product profitability: How much profit does a particular item contribute? How does item‘s profit break down across business units, media and distribution channels? What are the specific costs and expenses associated with producing the item? What percent of revenue or profit do they represent?

• Customer and market analysis: What are the key demographic characteristics of customers by product? Which other products do they tend to buy? Does the data indicate that an underserved market segment has greater revenue potential?

• Channel analysis: Which channels reach what types of consumers? How profitable is each channel? How will channels be affected by changing technologies, as well as the emergence of new channels?

• Forecasting and planning: What are the market potential of a new product, and how much investment should be made? How will a new release perform and what will its profit contribution be? What level of supply will adequately meet demand?

The result – employees can now access detailed sales data from around the world, which was previously not possible, and they are also able to run sophisticated self-service reports that provide granularity and a near real-time view into sales performance, ultimately helping these users make informed decisions that drive the results of the business In addition to sales data, media

to transform it into smart decisions

Medical companies with its business processes based on such intelligent information can disrupt its competitor‘s moves, strategize a sustainable competitive edge, tap into new customer bases, retain existing customer bases, increase operational efficiencies and be better prepared for the future

1.1.3.6 Data Warehousing versus Online Transactional Processing (OLTP)

Data warehouse are also known as Online Analytical processing (OLAP) system because they serve managers and knowledge workers in the field of data analysis Online transaction processing (OLTP) systems or operational systems are those information systems that support the daily processing that an organizational does OLTP system‘s main purpose is to capture information about economic activities of an organization On might argue that the purpose of OLTP system is to get data into computers, whereas the purpose of data warehouse is to get data or information out of computers

OLTP system is customer-oriented as opposed to a data warehouse that

is market-oriented It is a bit difficult to combine data warehousing (OLAP) and OLTP capabilities in one system The dimensional data design model used in data warehouse is much more effective for querying that the relational model used in OLTP systems Furthermore, data warehouses may use more than one database as a data source The dimensional design is not suitable for OLTP systems mainly due to redundancy and loss of referential integrity of the data Organisations choose to have two separate information systems, one OLTP and One OLAP system

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1.1.3.7 Data Warehouse Design Concepts

The design of the database depends on the approaches of the father of data warehouse developers The two-design processes are referred to as Top-down process, as described by Bill Inmon and Bottom-up as described by Ralph Kimball These are explained in detail below

Top-Down Model

These was Introduced by Bill Inmon, The process begins with an Extraction, Transformation, and Loading (ETL) process working from legacy and/or external data sources Extraction transformation, process data from these sources and output it to a centralized Data Staging Area Following this, data and metadata are loaded into the Enterprise Data Warehouse and the centralized metadata repository Once these are constituted, Data Marts are created from summarized data warehouse data and metadata In the top-down model, integration between the data warehouse and the data marts is automatic as long as the discipline of constituting data marts as subsets of the data warehouse is maintained

Bottom-Up Model

The central idea in Bottom-up model is to construct the data warehouse incrementally over time from independently developed data marts The process begins with ETL for one or more data marts No common data staging area is required There is generally a separate area for each data mart There may not even be standardization on the ETL tool

For the purpose of the thesis, Bottom-up model approach would be adopted in Smart - Startup which is the Kimball‘s development lifecycle, this states with one data mart (e.g Sales) later on further data mart are added Data flows from sources into data marts, then into the data warehouse It is also implemented in stages (faster) Due to the time constraint and project limitation, it is easier to complete a process for a subset of a company based

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on the data mart and link it up as the business grows The stages proposed for the process include Investigation, Analysis of the current environment, identify requirements, and identify architecture, data warehouse design, implementation and ongoing data administration

1.1.4 Smart – Startup’s field of operation

Smart - Startup is a company operating in the field of preventive medicine, a field that is currently receiving great attention from the health sector in particular and from the society in general The thesis introduces the basics of preventive medicine and the areas of application of preventive medicine

1.1.4.1 Definition of preventive medicine

In this part of the section a definition is given to provide a clear understanding of what preventive healthcare is

Mosby‘s Medical DSmart Startupionairy (2009) defines preventive medicine as:

―a pattern of nursing and medical care that focuses on disease prevention and health maintenance It includes early diagnosis of disease, discovery and identification of people at risk of development of specific problems, counselling, and other necessary intervention to avert a health problem Screening tests, health education, and immunization programs are common examples of preventive care.‖

This definition explains that preventive medicine is about the prevention of diseases and about keeping the quality of life of an individual as high as possible As described above, this can be through the early diagnosis

of diseases, which can be used in hospitals, but also through the early discovery and identifications of diseases in people that are not ill at this moment This can be done by screening and immunization programs, like flu shots Another part of preventive medicine is health education, which teaches people how to live a healthy life

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Types of preventive medicine

In order to get a view on what preventive medicine is, it is essential to distinguish the different types of preventive medicine This helps in developing a knowledge base to understand what preventive medicine is

1) Primary prevention, which is meant to reduce the likelihood of diseases

in people that have no symptoms at the moment Examples of this program are flu shots in children, but also full-body MRI scans in people that have a health check-up This program also includes providing information about a healthy lifestyle

2) Secondary prevention, which aims to identify a disease in people that

have a predisposition for diseases or who are at a very early stage of, for instance, a form of cancer By performing this method, a diagnosis can be formed earlier

3) Tertiary prevention, which focuses on controlling the lifestyle of people

that are already diagnosed with a disease and to decrease the complications and severity of their disease An example is the sugar control for people that are diabetic to mitigate problems with vision and nerves

As the name suggests, the purpose of primary preventive care services is

‗prevention‘ (for example, immunization), whilst the purpose of secondary prevention services is the early detection and diagnosis of illnesses, along with the possible prevention of any subsequent need for the utilization of curative services.‖

1.1.4.2 Appliances

In understanding what the different types of preventive medicine imply, this section of the thesis explains the appliances of preventive medicine As the focus is on primary prevention, because the other types are widely used in clinics already, the explanation is focused around screening, immunization and health education

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1.1.4.2.1 Screening

The screening of clients is an important step in preventive medicine The screening of clients is performed with MRI machines which have opened up another field of diagnostic imaging: early diagnosis of disease in defined groups of persons who do not yet show symptoms, with the aim of reducing morbidity and mortality A high accuracy, reader independence, and capability of the diagnostic test to be standardized imply a low number of false results and thereby decreases indirect costs in healthy individuals due to false positives.‖ This clarification of MRI supports the idea that MRI is a useful appliance of preventive medicine, because it is a reliable system and that it even reduces costs Furthermore, The brains, heart and other organs, as well as the vascular and nerves system can all be checked on signs that could indicate health problems This makes it a broad appliance in the early detection of diseases

The most important factor in MRI being a very efficient and comfortable way

of disease detection, namely that this method holds almost no side effects This means that people who are healthy at the moment do not undergo risks that could harm this healthy state through the screening with MRI

to destroy or disable them Immunizations prepare the immune system to

1.1.4.3.3 Health education

Next to the development in scanning material and immunizations, a development has been realized in the field of health education People are more aware of what can damage their health, because of research that has been done concerning the causes of types of cancer and vascular problems Health education is classified as:

1) General health education, which deals with general health promotion and not about specific diseases

2) Priority health education, which includes specific prevention of, for instance, lung cancer, breast cancer and colon cancer

The main difference between these two divisions within health education is that there are certain products in the market that are specifically attached to certain diseases People should be informed to know the risks of these products in order to prevent them to get an incurable disease Examples

of this are the dangers of smoking or eating too much fast food

1.2 Business Model Canvas

1.2.1 Concept of Business Model

The term ‗business model‘ appeared already in the academic article of Bellman (1957), followed by yet another academic article by Jones in 1960 However, it did not achieve any significant

Osterwalder, A., Pigneur, Y and Tucci, C.L (2005) in their book ―Clarifying Business Models: Origins, Present, and Future of the Concept‖, define the business model as follows:

As a conceptual tool, business model is a simplified representation of how the business of any company works To make this, it contains elements describing different parts of a business and explains their relationships to each other Thus, it tells the business logic of a firm With the business model concept we can simplify which kind of value is offered to which customers, which kinds of resources, activities and partners are needed and finally, how the value offered to customers is captured and transferred back to the company through revenues

According to Osterwalder et al (2005), business models can be classified

in three different categories according to how they are described by different authors: 1) Overarching business model concepts

2) Taxonomies

3) Instance level

Overarching concepts consist of definitions of what a business model is and what belongs in it Thus, they are abstract concepts describing all real world businesses This category includes both definitions of what the concept

of business model means as well as meta-models, which also define the elements included in it The frameworks to be presented in the following discussion all fall in the category of meta-models

Taxonomies category is formed by descriptions of different types or model types that are generic but contain common characteristics Types refer

meta-22

to simple categorization whereas meta-model types refer to different models Taxonomies may apply to specific industries instead of business in general Instance level includes concrete real-world business models as well as conceptualizations, representations and descriptions of them They are commonly used to describe companies in case-based studies ention until the late 1990s

1.2.2 Background of Business Model Canvas

The Business Model Canvas, which was first introduced by Osterwalder and Pigneur (2010) in their well-known book ―Business Model Generation‖ , is a business model innovation tool that helps organizations to understand, design and implement new business models or enhance old business models It is a way to the rationale of how an organization creates, delivers, and captures value, and it consists of nine building blocks

The elements have their theoretical underpinnings in Osterwalder‘s (2004) doctorate thesis, in which he develops a synthesis of the previous business model research Each of the elements included in the framework has been mentioned at least by two other authors in previous literature In the business model canvas tool the elements have been developed further from Osterwalder‘s previous work, resulting in a more easily useable structure and

a changeof names in some of the elements However, the core idea of the framework remains the same

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Table 1.1: Business model canvas elements and descriptions

II Customer Interface

2 Customer Segments

Segments of customers a company

wants to offer value to

3 Channels

Means of getting in touch with the

customer

4 Customer Relationships

Describes the link a company establishes between itself and the customer

to the customer, being the inputs in value-creation process and sources of capabilities

6 Key Activities Actions a company

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performs to do business and achieve its goals

7 Key Partners

Voluntarily initiated cooperative

outsourcing activities and acquiring resources outside the enterprise

IV Financial Aspects

8 Revenue Streams

Describes how a company makes money through a variety of revenue flows resulting from value propositions successfully offered to customers

9 Cost Structure

The representation in money of all the means employed in the

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(1) Value propositions

After an organization has decided on which customer segment they want to serve, they must now look into how to meet the needs and how to create value for the customers in that segment This is done through value propositions Here an organization determines which products and/or service they will provide in order to create value to its customers This value can be quantitative or qualitative both these includes various types of elements It is with these elements value is created for the customers Some because they help the customers to measure differences or similarities between products and/or services Others by meeting certain needs among the customers in the chosen segment One of these elements is price, here some organizations create value by offering the same products and/or services but to a lower price In this way they can reach out to a new customer segment that are difficult for their competitors to reach Design is another important element for an organization to create value, but it is also a difficult element to measure However a good design can help an organization´s product to stand out from similar products made by competitors Other examples of elements can be performance or customization Performance has been a traditional way

to create value and by tailoring products and/or services the organization can reach even more customers

1.2.2.2 Customer interface pillar

Customer interface pillar concentrates on the question ―who‖ in the business model It tells who the company‘s target customers are, how it delivers products and services to them and how it builds strong relationships with them It defines the way how a company goes to market, reaches its customers and interacts with them

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(2) Customers segments

This is the heart of any business model and also where to start in order to create one The organization must first decide what market and which customer segment they want to serve A customer segment consist of customers with similar needs, behaviour or characteristics An organization can focus on more than one customer segment depending on how many or which types of products and/or services they offer Some examples of Customer Segments are mass market and niche market In the mass market the organization focus on a large group, while in

a niche market the focus lies on a very small group that demands specific and tailored services and/or products

(3) Channels

Here the organization decides how the customers can purchase their products and/or services and in what way the organization will deliver them to the customers The channels are also used to raise more awareness among the customers and to let the customers valuate the organizations value propositio The organization can use their own channels such as sales force or own stores

If the organization does not have own channels they can use partner channels such as partner store or wholesaler Using own channels give higher margins, but costs more The partner channels give low margins, but helps the organization reach more customers

(4) Customer relationships

It is important for an organization to establish customer relationships Different customer segments can demand different types of customer relationships therefore organizations often need to have a mix of them in order to satisfy their customers One type of customer relationship is personal assistance Here the customer can communicate directly with one of the employees in the organization The opposite to this type of relationships is

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self-service, here the organization provides the customers with all the necessary tools and software for the customers to help themselves

1.2.2.3 Infrastructure management pillar

Infrastructure management pillar addresses the question ―how‖ in the business model, telling how a company creates value It tells how a company efficiently performs infrastructural and logistical issues, with whom and as what kind of network enterprise

Thus, it defines what abilities the company needs to provide its value proposition and maintain its customer interface It specifies the capabilities and resources needed in the business model and the executors of each activity

as well as their relationships with each other

(5) Key resources

An organization needs key resources in order to create value for its customers along with keeping their customer relationships and to reach their target market There are four categories of key resources:

- Physical: here are all the physical assets included such as

buildings, vehicles and machines

- Intellectual: brands, patents and copyrights are some examples

of intellectual resources

- Human: human resources is something every organization

needs However in business that are knowledge-intense or creative human resources are especially important

- Financial: financial resources, lines of credits and financial

guarantees is central in some types of business models

(6) Key activities

Like key resources there are some important activities an organization must do in order to manage the following: create value, reach markets and keep relationships to its customers For an organization to function

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successfully they must know what type of key activities that are important for them to meet the needs from their Customer Segments The key activities are categorized in three different categories: production, problem solving and platform/network

(7) Key partners

There are four types of different partnerships an organization that can

be included in:

 Strategic alliances between non-competitors

 Cooperation: strategic partnerships between competitors

 Joint ventures to develop new businesses

 Buyer-supplier relationships to assure reliable suppliers Which type of partnership an organization chooses depends on the motivation that lies behind the need to create the partnership It is common that competitors create strategic alliances in one part of the market segment and compete against each other in another part

1.2.2.4 Financial aspects pillar

Financial aspects pillar defines the companys‘s revenue model and cost structure, resulting in profitability It defines the business model‘s economical sustainability as all the other elements‘ configuration results in it

(8) Revenue streams

If the heart of a business model is the customer segment, then the revenue streams are the arteries The organization must answer the question:

―For what value is each customer segment truly willing to pay?‖

By answering this question the organization can create one or more revenue streams for their customers There are a couple of different types of revenue streams The most common type is asset sales, this means that the organization sells ownership rights to physical products This type of revenue

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stream also generate a onetime payment from the customer Other revenue streams may generate several payments from customers One example of this type is subscription fees Here the organization sells continuous access to a service Another example is usage fee, the more a customer use the service the more money he or she pays the organization It is common that an organization uses a mix of different types of revenue streams

(9) Cost structure

Here an organization looks at the costs they face in order to operate according to the business model There are two different types of focus in the Cost Structure building block The organization can be either cost-driven or value-driven i.e either the organization focuses on reducing costs or the focus lies on value creation

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CHAPTER 2: REASEARCH METHODOLOGY

2.1 Desk Review (secondary data)

Secondary data was collected to partly answer the question on how the Business model canvas approach is designed at Smart Startup company, but also to describe the internal development team with their respective areas of responsibility and tasks The secondary data that was collected originated from various literature, articles and news Secondary data also refer to existing data from old research, magazines, books,publications, etc It can be published by official or non-official organizations The results from the

secondary data collection is presented in chapter 3

2.2 Primary data

Primary data are the information which is collected through interview, group discussion, specialized surveys This method will cost more than gathering data from secondary source Primary data play an important role in data collection, since it is the only option when secondary data is unavailable

or unreliable Secondary data have support meaning, it is available for purposes other than solving the research problem (Kumar et al 2002, 106.) In this thesis, both data collection methods will be used to analyse the situation

of the market and the potential demand of data software in preventive healthcare service, to validate the secondary data about the Business Model Canvas approach and the establishment of the internal systems and processes, and to collect new data about the needs of the internal development team The results from the primary data collection is presented in chapter 3

To collect primary data, qualitative interviews with the selected samples as interviewees were conducted Qualitative interviews were selected because they are suitable when it is important to understand the research