Background to Arepa Technology
Background to Arepa Technology
The growth in the information technology industry has developed several software applications for different purposes such as defining the business model for a company or developing a conceptual framework for a research study. All these purposes can be fulfilled by the users with the assistance of these applications.
Ever since the inception of technology into the lives of individuals, it has been noticed that various companies have risen in terms of creating and developing technology that would be installed on an individuals’ personal computer at home or at work. The basic was providing the software to the individuals rather than working on the lead time to get that software by the customer and installing it.
When a customer considers buying software, he evaluates the importance of buying the software, whether it would help him in the long run and if so, he would go through the hassle of buying a pirated or an original CD of the software. Of course, when the CD was searched for, the customer may take recommendations from the shop keeper as to whether the software is viable for purchase or if another option is available.
Since selling CDs has become a norm
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Then came the incubatory period of downloading the software from the Internet where the customer would connect to a website, browse or search for the software required, register and login to the website and then leave the program for download for some period of time. It was given in those days that the Internet dial up connection would work at a slow speed, creating a time lag for the customer before he / she could use the software.
The customers had no choice but to use either of the two channels for purchasing the software and even though the process would make some delay in the actual use of the application, the customer would still need the software for his / her daily use.
Solution Provided by Arepa Technology
After years of following the same standards of purchasing software applications through a physical retail channel or through an online channel, Arepa technology’s founders then realized to look for a solution that would allow the customers to receive the software in a shorter period of time as well as allow the customers to use the software instantaneously.
The basic idea that came to mind was to allow the customers to use the already established technological innovations in order to develop further on them. Arepa then provided an easy to use solution that would allow the customers to avoid all time lags of installing the software, but rather just using the software in real time on the Internet.
Business Model of Arepa
A business model for Arepa can be defined in five angles, each of their own importance. The company needed to define its components clearly in order to develop a strategy against the competition in the market place. Since the business model of Arepa would not be of any unique form, the company would need to work or move at a fast pace so that it may leave the competitor in the rear view.
Arepa is currently working in three areas where it is acting as a distributor channel for its vendors, it is providing a customer portal for all media types of applications and then the company would also act as an application service provider for developing real time applications. This is the basics of the business model that is used by the company, however, the business model defined below uses five angles:
Value chain structure
Revenue generation and margins
Position in the value network
As discussed above, the basic problem that was defined by the company was that the customer was facing a delayed time between the purchase of the software to the installation and active use of the software. The company wanted to reduce this time by providing the customers with a real time experience, using the Internet, for accessing the software and utilizing the features instantaneously.
The customer would no longer need to go through the hassle of installing the application. All the customer would need to do is access the website and then the software would be avaialbel for use. This would allow the customer to achieve his / her objective in a timely and efficient manner.
The core market segment that has been targeted for this company’s product would be those individuals or corporations who would require or manage their daily work upon 90% of the software applications available to them. If the customers cannot receive the software in time, they may miss an opportunity.
For an individual or a corporation, there are many objectives to be achieved that are framed into a timeline and if, by any chance, the delay in time is due to the acquiring of a core application, the customer may suffer on his / her end.
Value Chain Structure
Within the value chain of the market, the company would act as a distributor of the software applications where they would be available for utilizing the features and the benefits. The company would just need to have the applications available for use onto the website, which would be the single point transaction for the customer.
The suppliers for the company would include all those who have a web presence and would believe in increasing the number of customers who use their online facility in a convenient manner rather than being disgruntled by the elaborate process of acquiring a software and using it.
However, in order to acquire suppliers for the company, heavy negotiations would be required. The negotiations would include the acceptance of various revenue models that the company would place in front of the suppliers in terms of the transactional and referral fees that would be generated from the business model.
Revenue Generation and Margins
The basic revenue that was to be received was from the licenses that were provided to the software companies, who would display their software on to the website. The customer would then be able to access the software through a single window service of the company. The company could also earn from the transactions conducted through its website as well as receive a referral fees from the vendors.
Position in the Value Network
The company would consider being a market leader in the industry because it has developed or rather created a new concept in the field of software application providers. The company has considered a new value proposition for the customers where they would be able to utilize the software applications in an efficient manner.
The company would, however, need to move ahead of the competition as there are several well established and renowned corporations that are also considering entering this industry. One of the most prominent of all the competitors is Microsoft about whom no one can evaluate the seriousness of achieving this objective.
Benefits Provided by Arepa
Various benefits have been derived from such an introduction of technology where the customer would not need to go through the hassle of buying a CD and installing it on to the hard drive on the personal computer at home or at the workplace. But the benefits provided by the company have been received on every step of using software from buying it to installing it.
The company has derived a value addition to every step of the process. It can be noticed that through the Arepa technology, the customer would not need to go to any physical location of a shop in order to buy the software. In the growing population of cars and according to the U.S. Census Board, it has been noticed that an average time spent by an individual on the streets would range approximately 30 minutes.
The company then considered the aspect of a customer looking for a shop where the shopkeeper would be specialized in the IT field in order to recommend the correct or appropriate solution for the problem faced. The shopkeeper, at all times is not competent to do so and this would cause the customer to consume more time in the process.
Since the issue of piracy has also been taking its creep to the higher level, there is no clear distinction as to which CD remains a copyrighted material. In this case, the customer would not be able to receive a proper quality of the software and there is a chance that the software may lead to delays in its performance.
Once the CD would be brought home or to the workplace, the customer would need to install the software on to the computer. The installation process is not an easy one two three go process. It takes an attentive span of time for the customer to read all the instructions and understand what impact it would have on the speed of the computer for booting etc once the software has been installed.
Installing the software on to the computer can also create several other problems such as having to face problems in acquiring all the features of the software because many a times, there ate errors in the software CD that would disallow the customer to receive the product in one go. This in turn, again, would cause a delay in achieving the objective by the customer.
In order to remove the frustration and agitation built by the problems and time lags, Arepa decided to provide real time solution where the customer would be able to use the application to its maximum limit allowing the customer to better mange his / her time.
Recommendations for Arepa
Arepa needs to make quick but not hasty decisions about how it plans to change its business model or refine it further. The company needs to decide upon a strategy where it would lock in its suppliers and motivate them to remain associated with the company, rather than having to consider becoming a direct competitor.
The company must also refine its business model in terms of providing real time support or an interactive application that would allow people from different parts of the world to learn from each other, using the facility of e-learning, a growing component of the Internet world.
Longley, R. (2005). Americans now spend over 100 Hours a Year Commuting: More time spent driving to work than taking vacations. Retrieved on March 1, 2009 from: http://usgovinfo.about.com/od/censusandstatistics/a/commutetimes.htm