Implementation of the Start-Up Company 'Strumpfbody' on the Basis of the Business Model Canvas

Seminar Paper, 2015

80 Pages, Grade: 1,6


List of Contents

List of Abbreviations

List of Figures

List of Tables

1. Role of the Hosiery in the Textile Industry
1.1 Economic and Innovative Potential of the Hosiery Industry
1.2 Structure of the Seminar Paper

2. Theoretical Basis
2.1 Introduction to the Textile Start-Up Business
2.1.1 Definition and Origin of Start-Ups in the Textile Industry
2.1.2 Start-Up Companies and their Characteristics
2.2 Conception of the Business Model Canvas
2.2.1 Definition and Comparison of Business Models
2.2.2 Nine Segments of Canvas

3. Implementation of the Business Model Canvas with an specific Example
3.1 Development of the Fashion Start-Up‘Strumpfbody’
3.2 Conception of the Product
3.3 ‘Strumpfbody’ on the Basis of the Business Model Canvas

4. Review

5. Conclusion and Outlook



List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

List of Figures

Figure 1.1 Sales Growth of the Leading Brands of Pantyhose and Nylons in the U.S. in 2014

Figure 2.1 Classification of a Start-Up in the Process of Business Formation

Figure 2.2 Characteristics of Start-Ups

Figure 2.3 Interaction of Business Idea, Business Model and Value

Figure 2.4 Business Model Canvas and its nine Elements in logical Sequence

Figure 3.1 Steps for the Start of the Start-Up Company Strumpfbody

Figure 3.2 Sketch of Strumpfbody and its Realization

Figure 3.3 Calculation of Strumpfbody

Figure 3.4 SWOT-Analysis of the Start-Up Company Strumpfbody on the Basis of the Business Model Canvas

List of Tables

Table 2.1 Comparison between two Business Models

1. Role of Hosiery in the Textile Industry

1.1 Economic and Innovative Potential of the Hosiery Industry

Early references to hosiery go back to the ancient Greeks. Workmen and slaves wore hosi- ery in ancient times, and Roman women wore a short sock (called a soccus) in their homes. Silk or cotton socks were also worn in Japan and China for centuries. Socks evolved into stockings in 12th century Europe. Breeches worn by men became close fitting, reaching from the waist to the foot like modern tights. Women wore stockings held up at the knee by garters.

After the year 1545 knitted stockings came into fashion, their seams were often ornament- ed by elaborate silk patterns, or "clocks". This term is still in use today as "fancy feet" be- cause the decorative seam treatments were popular during the late 40's and early 50's. Wil- liam Lee, an English clergyman, made the first knitting machine in 1589. Silk and cotton were the popular fibers of the era. Silk for example was the choice of royalty as the dis- covery of the New World opened up trade in this rare and luxurious fiber. There were many different ways to wear stockings. In cold weather silk stockings were sometimes worn several pairs at a time. In the 17th century when large boots were in fashion, linen "boot hose" were worn to protect the silk stockings underneath. They had wide lace tops, which were turned over the boots. Men continued to wear silk stockings with garters until the end of the 18th century,but long trousers begun to appear and socks have been worn underneath ever since.

In the 19th century machine-made cotton stockings became available for women. After World War I (1914-1918) short skirts were fashionable and long silk stockings were worn again. With the discovery and ultimate use of Dupont Nylon in the late 30's and early 40's, the primacy of silk in women's hosiery waned. Silk was ultimately replaced by nylon after the war. Nylon stockings which became popular after World War II (1939-1945) and com- pletely replaced the silk stocking usually had seams until the late 1960's. They were knitted flat and "fully fashioned" which means that they were shaped to fit the leg like modern sweaters. By decreasing the number of stitches as the stocking was knit towards the ankle, a garment was created that was "knit to fit".

By the early sixties, "fully fashioned" or seamed stockings were rapidly replaced by mod- ern reinforced heel and toe seamless stockings. In the 1960's when skirts were worn very short, many women began to wear tights (pantyhose) instead of stockings. To show, "a bit of stocking", was no longer accepted and while stockings fought for market share by be-coming extremely long, they became nearly extinct as pantyhose gained in popularity.1

“For much of the 20th century, pantyhose were an essential component of any polished woman’s outfit. But then, many Gen X and Boomers stopped wearing pantyhose years ago, dismissing them as uncomfortable and easily ruined by runs. Most Millennial women have never even worn them, and thanks to more casual office wear, they don’t need to in most offices.” 2 The figure 1.1 below shows that the majority of the leading brands of pan-tyhose and nylons in the United States has to struggle with this development.

Abbildung in dieser Leseprobe nicht enthalten

Figure 1.1: Sales Growth of the Leading Brands of Pantyhose and Nylons in the U.S. in 20143

Therefore the market needs a new innovation, which will be described in the following paper.

1.2 Structure of the Seminar Paper

The second part of this paper relates to the theoretical foundations. In the first section we give a definition of the term start-up and its origin. Afterwards we illustrate the seven characteristics of start-ups-companies in a graph. Section 2.2 deals with business models and specificly with the nine segments of the Canvas.

The third part is about the implementation of the business model Canvas with reference to a specific example. It describes how we came up with the idea of the new start-up compa- ny which, is called Strumpfbody. Additionally, it determines what the unique selling prop- osition of the product and how we developed it into a practical business model.

The fourth part of the paper, the review, describes the problems that occurred during the developing process of our idea. It also considers the potential weaknesses of the Strump- fbody and the handycaps we will be facing, if we keep on working on this project.

The last part forms the conclusion, and gives an outlook for the product Strumpfbody.

2. Theoretical Basis

2.1 Introduction to the Textile Start-Up Business

2.1.1 Definition and Origin of Start-Ups in the Textile Industry

In 1939, there were a lot of launches of high-tech companies in San Francisco. Two stu- dents of the university of San Francisco also made a small project that was called „start- up“ and founded the company Hewlett-Packard. This was the beginning of the name start- up. The first well-known start-ups are Microsoft, Apple Computer Inc. and Google.4

A start-up can be defined as a „ … a human institution designed to deliver a new product or service under conditions of extreme uncertainty.“5 In the broader sense a start-up is un- derstood as a young company that is being in the pre-/foundation phase and is looking for funds. In the narrower sense a start-up is defined as a young high-growth company which is equipped with innovative potential and acts in the digital sector like social media, mobile or games.6 The textile industry is defined as „ ... a part of the economy which produces textiles ...“7. The combination between both terms is a new founded company that produces or/and sells textiles. In the following figure 2.1 there is the process of business formation.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.1: Classification of a Start-Up in the Process of Business Formation8

2.1.2 Start-Up Companies and their Characteristics

A start-up company signalizes seven characteristics. The following figure 2.2 shows these properties.

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.2: Characteristics of Start-Ups9

After starting a start-up, the founders create a business model for its idea.

2.2 Conception of the Business Model Canvas

2.2.1 Definition and Comparison of Business

In 1950, there was the first mention while scientific reflections of the term business mod- el.10 It is the basic principale that creates, delivers and captures values, no matter what the implementation is. In addition, the model is the connection between the business idea and the creation of values, because the implementation only creates values. The following figure 2.3 describes the interaction.11

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.3: Interaction of Business Model, Business Idea and Value12

Considering the practical implementation this work focuses on the operationg business models.There are two operating business models: from Casadesus-Masanell and Ricart and also Canvas from Osterwalder and Pigneur. The following table 2.1 shows a comparison between both business models.

Abbildung in dieser Leseprobe nicht enthalten

Table 2.1: Comparison between two business models13

The intuitive understandable business modell, the simple visualization that shows obvious coherences, the customer orientation and value proposition qualify the business model Canvas as a business model for the implementation of a start-up. The model by Casadesus- Masanell and Ricart is suited to companies that established oneselves. However Canvas does not consider the competition and the trends. This paper will focus on the business model Canvas, which will be defined in chapter 2.2.2.

2.2.2 Nine Segments of Canvas

The business model Canvas comprises nine elements.14 Those elements act “ … as a basis for the development of replies to several significant questions to the configuration of the busniess model of …”15 a start-up company.16 The components are reasonend in a visual business model. The visualization breaks down into two fields. The left side describes the efficiency of the business model and the right side focus on the value of a business model, which can be seen in figure 2.4.17

Abbildung in dieser Leseprobe nicht enthalten

Figure 2.4: Business Model Canvas and its nine Elements in logiocal sequence18

The Customer Segments Building Block "defines the different groups of people or organi- zations an enterprise aims to reach and serve"19.This component involves “… all humans and organizations who benefit from the created values by the business model.”20 In order to make customers more happy, a company may divide them into distinct segments with common needs, common behaviours, or other attributes while a business model may define either just one or several large or small Customer Segments. Business models whose Cus- tomer Segment is the mass markets usually don't distinguish between different Customer Segments. The Value Propositions, Distribution Channels, and Customer Relationships all focus on the same group of customers with generally similar needs and problems. Business models targeting niche markets hoewever, cater to specific, specialized Customer Seg- ments. The Value Propositions, Distribution Channels, and Customer Relationships are all customized to specific requirements of niche markets. Some segmented business models distinguish between market segments with slightly different needs and problems. The retail arm of a bank, for example, may distinguish between a large group of customers, each pos- sessing assets of up to U.S. $100,000 and a smaller group of client, each of whose net worth exceeds U.S. $ 500,000. This has implications for the other building blocks of the bank's business model, such as Value Proposition, Distribution Channels or Customer Re- lationships. An organization with a diversified customer business model serves two totally unrelated Customer Segments with very different needs and problems.21 Organizations with multi-sided platforms (MSP), also known as two-sided markets or two-sided networks are economic platforms who have two distinct user groups that provide each other with network benefits. The organization that creates value primarily by enabling direct interac- tions between tw or more distinct types of affiliated customers.22 Thus, both segments are required to make the business model work.23

By matching your customer segment to your value proposition, you can achieve a more lucrative revenue stream. Hence, it is fundamental for an organization to understand the trade-off between Customer Segments and carefully select which segment it wants to target. Then, the organization must create a value proposition and employ a business model best suited to servicing their chosen customer segment's needs. This element of the Busi- ness Canvas Model expresses the choice of “… products and services that create values for a certain customer segment”24

Distribution Channels include all logistical sub-steps needed in order to distribute mer- chandise to potential customers such as own subsidiaries, intermediary trade or the inter- net. The individual choice of employed channels however, are individually dependent on the specific industry and the organization itself.25

This segment expresses the types of relationships when engaging with the customer seg- ment.26 Customer Relationships refer to the ways in which your company communicates and deals with exisiting customers. It describes what type of relationship each of our cus- tomer segments expect us to establish with them in order to get, keep and grow the cus- tomer base.27

Through financial planning is indispensable for every start-up venture. Based on financial planning (cost structure and revenue streams) investors decide if the business model sounds promising or not.28 One part of the cost structure are the revenue streams. They refer the earnings generated by the customer segment whereby revenues minus costs equal profit.29 In practice "...every element is represented by a sticky note (...) or a distinctively identifiable component in a digital representation."30 The other part of the cost structure are the costs themselves. They arise with the implementation of the business model.31 It is a method to determine how much it will cost a company to manufacture a product and how much profit will be made from manufacturing the product.32

Key Resources refer to the most important assets needed to make a business model work. They can be divided into physical, financial, intellectual or human resources: Physical Re- sources incorporate manufacturing facilities, buildings, vehicles, machines, systems, point- of-sales systems, as well as distribution networks and tend to be extremely capital- intensive. Financial Resources refer to cash, lines of credit, or a stock option pool for hir- ing key employees. Intellectual Resources such as copyrights, patents or proprietary knowledge are increasingly important components of a strong business model.33 Human resources are especially significant for potential investors since the professional back- ground of a start-ups founder and co-founders constitute an essential factor when evaluat- ing risks versus chances for the success of a new venture. In practice, lenders of capital seek to assess the entrepreneurs’ personalities in order to make decisions in terms of whether to invest in a start-up company or not. In doing so, investors are primarily inter- ested in the employment history of the founders in order to find out about the founders’ motives to start a new busiess. The competencies of every founding member should be summarized and those competencies, that are particularly significant for the business pur- pose should be emphasized. Key Resources/Human Resources should give specific information about necessary personell and required qualification and costs.34

This Key Activities summarizes “… all necessary activities for the creation of values …”35, and paraphrases the activities which must be implemented by the company in order to guarantee the functioning of the business model.36

This Key Partners describes “… the network of suppliers and partners who contribute to the success of the business model.”37

3. Implementation of the Business Model Canvas with an specific Example

3.1 Development of the Fashion Start-Up ‘Strumpfbody’

Finding an idea which leads to a new innovation nowadays is really hard. Technologic ideas are well developed and therefore we are living in a time, where almost every con- sumer has everything to fulfill his or her needs. This is the reason why, within our project, we started thinking about specific things and times where we were unsatisfied with certain things or with the moment itself. As our group exists out of more women than men we began to reflect daily problems of a woman. Therefore, we came up with the issues women have to face wearing tights. Women have to wear tights all the time, weather they have to wear them for an important occasion, like a wedding or church visit or wearing the tights daily because of work as a stewardess or a staff member of a bank. Nevertheless, most of the women get in touch with tights sooner or later. Giving a specific example of a woman facing those problems might keep it more simple explaining them.

Valentina Weiss is a stewardess at the flight company Condor. She is 25 years old and af- ter she graduated of high school, she started her second education as a stewardess. Within her daily work she needs to wear a specific business outfit. It contains a skirt and a match- ing blazer, as well as a matching white shirt underneath. Moreover she has to wear tights under her skirt every day, no matter if it is winter or summertime. Talking to her personal- ly about how she is feeling with wearing tights described perfectly how probably most of the women feel.38 While talking to her, she told us that she constantly has a hard time at work, because her tights annoy her most of the time. Pulling up her tights every few minutes, while about 50 guests in the plane are waiting for her service, always gives her a hard time. She mentioned that they are most of the time too loose and while walking they roll themselves down, so she would have to pull them up all the time.39 Additionally, she noticed that the waistband on the top of the tights is squeezing into her body fat and ensures marks, which look through the shirt. 40 The squeezing body fat is giving women a hard time looking well shaped while wearing tight shirts with a tight underneath as we fig- ured out in the survey which will be described in the next part of the paper.41

Summarzing those statements, Valentina was mentioning us that for her job it would be much more comfortable to have tights, which do not roll off her hips, while she is walking around in the plane as well as having tights, which stay at the right place and form the body without having too much seams that itch.42

We caught up the idea and thought about further steps we could take in order to build a business idea, which fits to the market. That was the point when we came up with our idea Strumpfbody. In the following figure 3.1 you can find a process chart which shows the individual steps we took to create our product.

Abbildung in dieser Leseprobe nicht enthalten

Figure 3.1: Steps for the Start of the Start-Up Company Strumpfbody43

In our first step we started with a market research so that we could figure out what the market really needs. Therefore, we asked many women on the street about their thoughts and suggestions when we mentioned our idea. During the survey we found out that a lot of those women were having the same problems described before. However, to not only get the opinion of us, the stewardess Valentina and some of the people on the street, we established an online survey about specific issues we needed to know more about.44 The questions were asked closed with choices or even open to answer depending on the question. We for instance found out that almost half of the women we surveyed are buying their tights monthly and only 2 percent never buy tights. That has shown us, that there is a demand and therefore it opens up a huge market for us.45

Referring to the results of the survey some of them have already been mentioned and some of them will be mentioned in the following. However, the most important result of the sur- vey has shown that 96% of all women we asked are unsatisfied with their tights, which ensures that they have many different problems we want to solve. Having found out that there is a market for this specific idea we started to analyse the competition. Checking the internet we discovered that there are three potential competitive industries: erotic scene, sport secne and shaping wear.

Firstly, there is the erotic scene which sells whole-body bodies with different patterns. Those bodies though shall not fulfill the function of comfort and the perfect fit, but shall more be seen as sexual toy. Thus this industry is not a direct competition, because the se- cond industry we found is the sport scene, which sells whole-body bodies as well. These bodies are used for dancing wear, ice skating wear or other sportive activities and therefore most of the time have practical holes nearby the feet as you can see in the figure. On these grounds the industry may not be a direct competitor either. Additionally, there is the shap- ing industry which sells bodies with shaping function. To analyze the willingness of con- sumers to buy those kind of tights or one-pieces we surveyed what type of tights consum- ers buy most of the time. The results showed us that over 65 percent of all survey women would only buy common tights. 30 percent would buy shaping wear and 5 percent erotic wear. Therefore all of the products mentioned above do not fulfill the needs of minimum 65 percent of the women we survey. That is why these industries do not compete with us because the function of our idea is to create a one-piece tight which prevents the pulling, loosing and squezzing of a common tight.

After finding out, that there is a market and no direct competitors on the market we needed to get more knowledge about the production of such a product and the materials we could use. For this reason we got in touch with competitors and qualified staff in this industry. To receive more feedback the next step was to not create the product at first but to receive feedback of potential end-clients. Therefore, we started to create social media accounts in Facebook and Instagram, developed an App and moreover a Homepage, which we con- nected to our survey. In addition to that, we got more opinions about the product, and if it was the right idea and if people would be skeptical about it. To receive a better understand- ing of the product we published photographs and text modules, which should describe our product and our idea. Getting more feedback was really helpful to fulfill the next step of the process, the creation of a prototype. Buying tights and bodies at common stores was helping us to imagine the product and also to shoot a potential prototype as you can see below.

After that we published those prototypes on the social media accounts as well and got very positive feedback on them. Nevertheless, some issues came up that we had not thought about before. For example the price structure, the itching of the seams and the uncomforta- ble way to go to the bathroom.

After developing all of these steps we created a packaging which can be seen as a possible selling cover. In the appendix you can find an example of this packaging.46

3.2 Conception of the Product

The Strumpfbody is as simple as unique, because it combines a common tight and body into one piece.

Abbildung in dieser Leseprobe nicht enthalten

Figure 3.2: Sketch of Strumpfbody and its Realization47

The figure 3.2 clearly marks that with this product we found a solution of the problems we have heard before.

The one piece is easy to wear and because of the top part attached to the tights, there is no more seams, which can mark off your clothes and look through. Moreover the top part is the reason, why the tights are not falling off anymore. The shoulders hold up the top, so the one piece stays in place and its is much more comfortable and easy to wear. Nevertheless the one piece automatically forms the body, because of the shaping material nylon.

3.3 ‘Strumpfbody’ on the Basis of the Business Model Canvas

After a detailed survey and finalizing the product features which fulfill the consumers’ needs, it is important to apply the product to the business model to determine foundation of the following procedures.

As described in chapter 2.2.2 the business model “canvas” was chosen to analyse the market and to define the business activities. In the following the nine segments of the business model will be applied in a logical order to Strumpfbody.

Firstly we needed to define our Value proposition, which describes what we do. This part includes our product Strumpfbody. It combines a common tight and body into one piece. The fabric will be made out of 100 percent nylon. To enable comfort we needed to be sure that Strumpfbody will not have too many seams and other bothering details. Therefore we decided to create the product out of three nylon parts which will be cutted and seamed at different parts. The product should offer quality and the perfect fit for everybody, who wants to wear tights more comfortable.

After having defined our key product or value we needed to determine our Customer Seg- ments. To do so, we evaluated the results of the survey, which showed us that 96% of all women we surveyed were unsatisfied with their tights. Therefore, our potential customer group is every woman who wears tights. However you can separate this customer group into two segments. One would be women who wear tights occasionally. This can be for instance partying, due to weather or a chic occasion to name just some.48 The other one is defined of women who have to wear tights to work every day. This for example can be staff members of airlines or banks.49 To keep on going with this process it is very im- portant to define those two segments in order to build up the right marketing strategy, the choice of partners and clients and other activities like the cost structure.

The third step was to determine activities to raise Customer Relationships. To build up those relationships and therefore a wide range of customers we needed to figure out how we interact with them. At first the fastest way to get well known and to receive feedback of potential customers was to create an Instagram50 and Facebook51 page and to load up those pages with product information, pictures and marketing material. Additionally we created an App52 and designed a homepage53 which both are showing those materials as well as keep the customer updated. Having implemented the product we will want to promote our product at the point of sale, which can be for example drug stores or other supermarkets. Having those positioners with a product picture and little examples, which show how com- fortable Strumpfbody is, will be one of our future strategies to build a customer relation- ship.

The next step was to define Channels where Strumpfbody is going to be sold. Those chan- nels may be retailers like department stores, supermarkets, drug stores and specialized stores as well as the own Onlineshop.54 To support this choice it is to mention that the sur- vey showed us that those channels are already used by consumers to buy regular tights55.

Our Key Activities can be defined as how we implement our product. Firstly we need to cooperate with a production partner which is able to produce our product and may have a good knowledge about the material already. Secondly we need to announce our product to our clients as well as to the end-consumers by marketing events and the press. It is important to introduce the product in a short way, so everybody is able to understand the ad- ditional benefit of the product very easily.


1 Refer to Handley, S. (Nylon, 1999), p. 25ff.

2, 14.12.2015.

3 Refer to, 12/14/2015.

4 Refer to, 12/13/2015.

5 Refer to Klein, L. (Lean Startups, 2013), p. 6.

6 Refer to Hahn, C. (Start-up-Unternehmen, 2014), p. 4.

7 Geiger, W. a. Kotte, W. (Handbuch, 2008), p. 150.

8 Refer to Hering, T. a. Vincenti, A. (Unternehmensgründung, 2005), p. 14f.

9 Own illustration refers to Kühnapfel, J. (Start-up-Unternehmen, 2015), p. 1f.

10 Refer to Eckert, R. (Business Model Prototyping, 2014), p. 60.

11 Lahn, S. (Der Businessplan in Theorie und Praxis, 2015), p. 166.

12 Own illustration refers to ibid., p. 167.

13 Refer to Eckert, R. (Business Model Prototyping, 2014), p. 70ff.

14 Refer to Fueglistaller, U. a.o. (Entrepreneurship, 2016), p.157.

15 Eckert, R. (Business Model Prototyping, 2014), p. 72.

16 Refer to Fueglistaller, U. a.o. (Entrepreneurship, 2016), p.157.

17 Refer to Lahn, S. (Der Businessplan in Theorie und Praxis, 2015), p. 170.

18 Own illustration refers to Eckert, R. (Business Model Prototyping, 2014), p. 72.

19 Refer to Osterwalder, A. a. Pigneur, Y. (Business Model Generation, 2013), p.22f.

20 Lahn, S. (Der Businessplan in Theorie und Praxis, 2015), p. 171.

21 Refer to Osterwalder, A. a. Pigneur, Y. (Business Model Generation, 2013), p.22f.

22 Refer to, 12/14/2015.

23 Refer to Osterwalder, A. a. Pigneur, Y. (Business Model Generation, 2013), p. 22f.

24 Eckert, R. (Business Model Prototyping, 2014), p. 72.

25 Refer to Sucec, C. (Der Businessplan als Herzstück, 2001), p. 67.

26 Refer to Eckert, R. (Business Model Prototyping, 2014), p. 72.

27 Refer to, 12/14/2015.

28 Refer to Fueglistaller, U. u.a. (Entrepreneurship, 2008), p. 239.

29 Ibid., p. 158.

30 England, D. a.o. (Task Models and Diagrams for User Interface Design, 2010), p. 29.

31 Refer to Fueglistaller, U. a.o. (Entrepreneurship, 2016), p. 158.

32 Refer to, 12/14/2015.

33 Refer to, 12/14/2015.

34 Refer to Kailer, N. a. Weiß, G. (Gründungsmanagement, 2014), p. 188.

35 Lahn, S. (Der Businessplan in Theorie und Praxis, 2015), p. 171.

36 Refer to Eckert, R. (Business Model Prototyping, 2014), p. 72.

37 Ibid.

38 Refer to Appendix 8.

39 Ibid.

40 Refer to Appendix 8.

41 Refer to Appendix 1.

42 Refer to Appendix 10.

43 Own illustration.

44 Refer to Appedix 1.

45 Refer to Appendix 1.

46 Refer to Appendix 7.

47 Own illustration.

48 Refer to Appendix 1.

49 Refer to Appendix 1 and Appendix 10.

50 Refer to Appendix 5.

51 Refer to Appendix 4.

52 Refer to Appendix 6.

53 Refer to Appendix 3.

54 Ibid.

55 Refer to Appendix 1.

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Implementation of the Start-Up Company 'Strumpfbody' on the Basis of the Business Model Canvas
University of Cooperative Education Ravensburg
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