Question

YOU BE THE CONSULTANT – Does Your Business Model GEL?

Don Debelak has developed a GEL analysis for evaluating business models: Great Customers, Easy Sales, and Long Life.

Q1. Use Debelek’s GEL analysis to evaluate the quality of Smackage’s and ERT Systems Business Models. (You may have to do more research to evaluate each company more accurately.)

Q2. Based on your analysis in question 1, would you invest in these businesses? Explain why or why not

Q3. What steps could the founders of these businesses take to improve the quality of their business models?

Answer 1

Answer:-

With the help of Debelak’s GEL analysis, Smackages and ERT Systems’ business models were analyzed by me. First of all, I dealt with the “Great Customers” segment of this analysis. Smackages has more than 1000 users. Apart from this, a portion of the total capital which is earned by the company is diverted towards the sales team as they already have a good customer base. More than 40 fire stations are using the ERT system. The company is looking to receive the financial help so that they can produce more products to serve more fire stations. The company is not able to fulfill the existing demand.

The other segment of this analysis is "Easy Sales” which can be seen as the vital element of GEL factor. The product of Smackages should be characterized as a want rather than a necessity. This can be seen as a disadvantage for the company as it will lower the value or significance to the customers. On the other hand, ERT system offers the life-saving products and thus the customers can easily buy this product as it requires minimal promotional activity

Long Life is the third area of this analysis. The initial investment is sought out by both the companies. Both companies have the plan of action with the investment so that they can improve their market share.

Answer:- If I had to invest in these organizations, I would have selected ERT services rather than in Smackages. Due to a possible increase in demand for the products of ERT services and the possibility of increased customer base this organization looks more attractive. On the other hand, Smackages has a very limited number of customers and looking to hire a sales team to increase the market share. In fact, the product of Smackages is quite hard to market.

Answer:-

. The current business model of these organizations can be improved by having the business prototypes. Before investing in such a huge level, by testing the business model at a lower scale, the management can gauge about the success of the business model in long run. In my opinion as the products of ERT services are already being used in 40 fire stations thus it can be treated as a prototype of their business model. Despit having 1000 subscribers, Smackages was not able to get the license for the skin color-matching tool which can help the customers in selecting the correct makeup shade. This is the most important aspect of their business model.