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An Evaluation of Applicability of the UK Business Model to the Conditions of the Czech Market UNIVERSITY OF HUDDERSFIELD BUSINESS SCHOOL An Evaluation of Applicability of the UK Business Model to the Conditions of the Czech Market THE LOW-COST TRANSPORT INDUSTRY Dissertation submitted to the University of Huddersfield (Business School) in partial fulfilment of the requirements for the degree of MSc International Business Management Bc. MARTINA HLAVATA (U1273515) Supervisor: Mike Newsome Date: 9th September 2013 Abstract In the current high-speed changes in markets, customer behaviour, technological breakthroughs, and generally in the time of globalization process; organizations are being increasingly more ingenious when developing their new business models in order to beat the competition and gain the customer. Moreover, in last decade there has increased rapidly emergence of the term “business model” in the academic and business literature. Nevertheless, since the the global crisis erosion in 2008, especially „price-war“ and low-cost based companies are coming to the fore. Therefore, because of the fact that author saw a great business opportunity, a „market gap“, in her own country, this dissertation focuses on evaluation of the applicability of the low-cost UK business model to the conditions of the Czech market. This dissertation provides deep internal and external analysis of the low-cost business model of chosen company which operates in the UK, namely Megabus. To evaluate the feasibility of application of the UK Business model to the Czech Market, this study compares both markets also through appropriate PESTEL analysis of the business environment in the Czech Republic, as well as investigates potential interest of the Czech customer through questionnaire and in-depth interview survey. The results of this dissertation indicate significantly positive general view on given low-cost business model among potential Czech customers of all levels of income, as well as distinctive potential of growth in the Czech market. Overall, this dissertation provides beneficial starting point for author‘s own real business plan that author would like to realize in the Czech Republic. Keywords: Business model, low-cost business model, Business model Canvas, PESTEL analysis, international marketing, cultural differences, customer behaviour, EU grants. ii Acknowledgements I would like to take this opportunity to express my sincere thanks to Mr. Mike Newsome, my personal tutor, for his help and professional guidance during the entire process of writing this dissertation; to the participants of my online survey, for their careful completing of the questionnaire; to the interviewed employees of selected Czech Employment Offices in the Moravian-Silesian Region, for their cooperation in my in-depth interview; to the executives of Tomas Bata University in Zlin, especially to the Dean of Faculty of Management and Economics, prof. Dr. Ing. Drahomira Pavelkova, and to the Vice-Dean for International Relations, Ing. Premysl Palka, Ph.D., for giving me the opportunity to study under the “Double Degree” Program; to my outstanding parents, who always support me and enabled me to study in the United Kingdom; and to my boyfriend Ondrej, for his patience and emotional support. iii Content The List of Figures ........................................................................................................... vi The List of Tables ............................................................................................................ ix The List of Appendices ..................................................................................................... x 1 Introduction ............................................................................................................... 1 1.1 Background to the Study and Justification........................................................ 1 1.2 Research Questions ........................................................................................... 2 1.3 The Aim and Research Objectives .................................................................... 3 1.4 Research Structure ............................................................................................ 3 2 Literature Review ...................................................................................................... 4 2.1 Introduction ....................................................................................................... 4 2.2 Business Models ............................................................................................... 7 2.2.1 Definitions of the Business Model ................................................................ 8 2.2.2 Business Models, Strategy and Tactics ....................................................... 10 2.2.3 Components of the Business Model ............................................................ 12 2.2.4 Purpose of the Business Model ................................................................... 14 2.2.5 Types of Business Models .......................................................................... 17 2.2.6 Examples of Business Models .................................................................... 20 2.3 Analysing Business Models ............................................................................ 23 2.3.1 Crucial Areas and Techniques of Business Model Analysis ...................... 25 2.3.2 Environment of the Business Model ........................................................... 27 2.3.3 Customer, Culture and Marketing Mix ....................................................... 29 2.4 Successful Business Models ........................................................................... 31 2.4.1 Analysing Existing Business Models and Building New Ones .................. 31 2.4.2 Barriers to Imitating Business Models ........................................................ 32 2.4.3 Low-cost Business Models ......................................................................... 33 3 Research Methodology............................................................................................ 34 3.1 Introduction ..................................................................................................... 34 3.1.1 Clarification of Research Questions............................................................ 35 3.1.2 Conceptual Framework ............................................................................... 37 iv 3.2 Philosophies to be Employed .......................................................................... 38 3.3 Approaches ...................................................................................................... 39 3.4 Strategies ......................................................................................................... 40 3.5 Adopted Research Methods ............................................................................ 41 3.5.1 Secondary Data Collection .......................................................................... 41 3.5.2 Primary Data Collection .............................................................................. 42 3.6 Timescale ........................................................................................................ 50 3.7 Strengths, Weaknesses and Limitations of the Research ................................ 51 3.8 Research Ethics ............................................................................................... 52 3.9 Resources ........................................................................................................ 53 4 Research Results, Analysis and Discussions .......................................................... 54 4.1 Dealing with the 1st Main Question and Related Objectives ......................... 54 4.1.1 PESTEL Analysis of the UK Transport Industry ........................................ 54 4.1.2 PESTEL Analysis of the Czech Transport Industry ................................... 65 4.1.3 Comparison between the UK and Czech External Environment ................ 76 4.1.4 Analysis of Megabus Business Model ........................................................ 78 4.1.5 Related Results of the Questionnaire Survey .............................................. 83 4.1.6 Related Results of the In-Depth Interview .................................................. 89 4.2 Dealing with the 2nd Main Question and Related Objectives ........................ 90 5 Discussion ............................................................................................................... 93 5.1 Key Drivers of Success of Chosen Business Model ....................................... 93 5.2 Applicability of the UK Business Model to the CR Market ........................... 95 6 Conclusion .............................................................................................................. 97 7 Bibliography ............................................................................................................ 98 8 Appendices ............................................................................................................ 113 v The List of Figures Figure 1 – Two Main Research Questions Figure 2 – Visualisation of the Business Model: Business Model Canvas Figure 3 – Mutual Relations between Business Models, Strategy and Tactics Figure 4 – Example of Modern Business Model – PatientLikeMe Figure 5 – Visualization of the Business Model Design Process Figure 6 – External Environment of the Business Model Figure 7 – Diagram of Conceptual Framework Figure 8 – “The Research
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