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[pic 1] The University of Hong Kong School of BusinessIIMT2601Management Information SystemsProject Report  SmartRocket’s Business ModelTo understand and analyze the business model of SmartRocket Group No.: C 5 Team Members:  Number of Words (excluding Cover Page, Table of Content, Appendices): 3977 words1. BackgroundLaunched in 2014, SmartRocket is Asia’s first and largest mobile workforce that combines crowdsourcing with mobile technologies to enable client companies to quickly, inexpensively and reliably understand retail environments anywhere and anytime. It helps client companies optimize their retail execution at the exact time and location through the provision of immediate feedback on store prices, stock levels, on-shelf compliance, promotions, service level etc. To ensure the information provided to clients are reliable, SmartRocket employs rigorous quality controls measures, including GPS location verification, time & date stamping, photo and video verification and 100% validation (SmartRocket, 2014). Moreover, the firm also provides part time work and an extra income for thousands of crew members such as students, business and home executives in different areas including Hong Kong and Mainland China.Through the usage of the Android app, SmartRocket allows its crew members to find, claim and complete quick tasks in their area for payment. The tasks typically require their crew members to visit a store or a supermarket to do a quick stock count or price check for specific items, take a few photos of the products and upload them to the app for verification. Most of the tasks generally take between 2 minutes to half an hour to complete, and generally pay between HK$10 and $50. For some special tasks, the paycheck can be as high as HK$80 to $100. Clients can see the results of SmartRockets work in real-time which provides them improved visibility and allows them to make quicker and better-informed decisions (SmartRocket, 2014).2. Business Model2.1 What is a business model? An article in Harvard Business Review recently discussed the concept of business model (Ovans, 2015). A business model is complex and abstract concept that is the foundation of every businesses. A good business model can help businesses to prosper and expand in the long-run. Michael Lewis offered the most simplest definition of business model, “ How a business plans to make money”. Although Peter Drucker never mentioned the term business model, his “Theory of Business” lays the basis of many popular understanding of what a business model is, such as identifying its customers, what its customers value, the cost of operations and profitability.The following questions will be needed to answer to understand the business model: Whos your target customer?What customer problem or challenge do you solve?What value do you deliver?How will you reach, acquire, and keep customers?How will you define and differentiate your offering?How will you generate revenue?Whats your cost structure?Whats your profit margin?(Source: For Dummies, 2015)  Traditional business models rely on conventional mechanisms to run their businesses, while new models challenge traditions by taking advantages of the opportunities presented by the digital economy. A successful business model is important to the survival of the business. We can observe that successful business models also change with time and environment.  For example, the transformation from hardware software sellings to SaaSs, or the introduction of cloud computing are all examples of evolving business models of many corporate giants, such as Microsoft and Emperor Group to adapt to the new business environment.
2.2 Crowdsourcing and SmartRocket The business model adopted by “SmartRocket” is crowdsourcing. The company employs the crowd through its app to collect real time retail information. Crowdsourcing was identified as a kind of new business model in the book called “Seizing the White Space” by Mark Johnson. The term, coined by Jeff Howe, is actually the combination of the words “crowd” and “outsourcing”, and like what these 2 words suggests, the fundamental idea behind it is to outsource the work to the crowd (Bratvold, n.d.). There are 7 types of crowdsourcing business models: marketplaces, platforms, content and product markets, crowd processes, media and data, crowd services and crowd ventures (Bynghall & Dawson, 2011). SmartRocket’s business model is the crowd services, where the service is partially and fully provided by the crowd. 2.3 More on SmartRocket’s Business Model According to the information gathered from the CEO of SmartRocket, the report will list out how SmartRocket, one of the few companies that solely uses crowdsourcing and mobile technology to gather instant retail information for clients, differentiate from other traditional research companies. 2.3.1 Target customersGenerally, SmartRocket targets on large multinationals consumer packaged goods companies (MNCs) across a wide range of categories including soft drinks, cosmetics, tobacco, shampoo, skin care, snacks. Some of their famous customers are: Danone, Coca Cola, L’Oreal, Carlsberg, Johnson & Johnson, et cetera. There are two reasons for SmartRocket to choose these MNCs. Firstly, from a purely commercial perspective, developed companies have better understanding of the importance of retail marketing, so they have sizable budgets for retail research. Secondly, if clients operate across multiple markets, it often opens up opportunities to do similar things for SmartRocket in other markets. 2.3.2 Solving Customers’ ProblemsAs mentioned before, SmartRocket helps to check stock levels, prices and ensure promotions are set up so as to help companies understand and optimize their retail execution and improve shopper experience. This means collecting information on what is happening at the point of sale and feeding this back to their clients. It ensure that the information is fast enough so that if there is a problem they can get it fixed in a timely manner.