Blue River Technology Business Model

The blue river technology Inc. is a company based in the United States that aims at producing computer vision and robotics used in the agricultural industry. The tractor-towed robot senses each individual plant and apply precisely the amount of input required in real time. The report aims at deconstructing the business model of Blue River Technology and identifying the success factors that have led to its success. The analysis is based on the nine building blocks namely the value proposition, customer segment, channels, customer relationships, key activities, key resources key partners, cost structures and the revenue stream. The blue river business model demonstrates a close relationship between the factors. The major success factors for the company include the efficiency of its products, the keen product development process and commitment to improvement. However, the company has several downside factors including difficulty in the expansion, operating in a highly regulated industry and the need to train potential customers. Consequently, to overcome the downsides it is recommended that the company employs various agents to train customers and opens branches all over the world.

Business Model Deconstruction

Introduction

The Blue River Technology Inc. is a private company and a pioneer in computer vision and robotics used in agriculture, which serves farmers with revolutionary robots that unlock greater yield potential (Redden et al., 2017). The company employs robotics technology and computer vision to build working and intelligent solutions for the agricultural industries by identifying characteristics of each plant, taking the appropriate action necessary to maximize yields and making each plant count (Redden et al., 2017). The company was founded in 2011 by two Stanford University alumni Lee Redden and Jorge Heraud (Redden et al., 2017). It is located in Sunnyvale, California, United States and has additional branches in Yuma, California and Salinas, Arizona. The blue river technology has developed tractor-towed robots with the ability to sense each individual plant and applying precisely the right amounts of inputs at tractor speed and in real time (Redden et al., 2017). The automated solution is appropriate for fields with chemical resistant weeds and for organic field agriculture. The company deals with different product categories such as drones, agriculture, hardware, robotics, industrial automation, and software (Redden et al., 2017). Currently, it operates as a subsidiary of Deere & company. This report focuses on the deconstruction of the Blue River Technology business model, identifying the crucial success factors that ensure its sustainability, and offers recommendations to ensure the success, profitability, and continuity of the business in today’s competitive world.

The Business Model Canvas of Blue River Inc.

Value Proposition

The value a business is delivering to its customers can be defined as ‘doing the job for the customer’ or ‘getting the job done for the customer’ (Katzenbach & Smith, 2015). The Blue River Company value proposition is derived from the ability of the customer to be able to save farm inputs by more than 90% and improve the economics of the farmers through precise application of inputs in right amounts, in real time and in tractor speed (Redden et al., 2017). This is done by being able to get rid of weeds more efficiently by identifying the unwanted plants and killing them; enabling farmers to have the freedom of choosing the herbicide that meets their needs and applying chemical and fertilizers to the specific areas as opposed to the entire field.

The Customer Segment

The blue river technology defined its customer segments since its formation including large-scale lettuce farmers, cotton farmers, and other large agribusinesses (Redden et al., 2017). The company first focused on the high end of the market and hence began with the high value and high maintenance crops such as cotton and lettuce and intends to include soybeans, corn, and wheat.

Channels

This refers to the channels through which the customer segments wish to be reached the trough (Hartmannet al., 2016). Blue rivers channels include retailers and business agents.

Customer Relationships

Customer relationships refer to the type of relationship that exists between the specific customer and the company (Yangxuan, 2017). The customer relationships are always driven by the tree motivations namely customer acquisition, customer retention and boosting sales and may occur at different periods of the business life cycle (Pedersen, Gwozdz, & Hvass, 2016). The customer relationship that exists between the blue river and the customer segments are consumer trust and convenience.

The Key Activities

These are the key activities required by the value proposition, customer relationships, and revenue streams (Françaet al., 2017). Some of the most important activities that the company carries out include the production of the robots, research, and development, marketing and management of the products.

Key resources

For a company to deliver its proposition, value and profit formula, it has to have access to the key resources that describe ways in which value for both the customers and the company will be created (Bankvall, Dubois, & Lind, 2017). The key resources at blue river technology include technology, facilities, equipment, products and a brand which all fundamental in delivering value proposition for the customers who are mainly large-scale farmers (Sheldrake, 2016). The company possesses a strong background in sensors, engineering, and computing which adds to the vast pool of resources at its disposal (McNeill, 2015). The company further has key processes characterized by managerial processes, policies, culture, metrics and operational processes that enable delivery of value in a scalable and repeatable manner (Ford, 2015).

Key Partners

These are those close partners that the business collaborates with to ensure timely and efficient delivery of services for its customers (Hartman, 2015). The key partners for blue river technology are the investment partners and technology vendors.

Cost Structures

Cost structures refer to the most significant cost that is incurred while operating a business and may be either cost driven or value driven (Dijkman,et al., 2015). At the blue river technology, the cost structure is value driven and include general administrative costs, product development, marketing, and sales.

The Revenue Stream

The blue river technology generates revenue from its customer segments trough sale of asset. The customer purchase equipment such as tractor-towed robots for which value they pay and the company gets revenues (Redden et al., 2017).

The Key Success Factors for Blue River Technology

The three key success factors for blue river company include commitment to efficiency, commitment to improvement and keen product development process

Commitment to improvement

The blue river company is committed to constant improvement of its products to ensure customer satisfaction. The company began with the development of the company first began with the development of the met lettuce bot that focused on lettuce thing which has always been considered expensive and time-intensive task (McNeill, 2015). The company has constantly improved its products to include the see& spray technology, drone-based remote sensing, and data insight, which have contributed immensely to the agriculture industry (Kerzner & Kerzner, 2017). The constant improvement of its product, keeping up with the current trends and the commitment to solve agricultural problems through technology has ensured the continuity and sustainability of the company (Redden et al., 2017).

The Keen Product Development Process

Initially, the founders intended to create a lawnmower robot targeting recreation centers, golf courses, parks and football stadiums (Redden et al., 2017). However, after performing the lean conducting interviewers with key target customers the founders realized that the product was not needed in the market hence they changed the initial idea and developed the lettuce robot which was much marketable (McNeill, 2015). Since then the company had developed its products based on its relevance. Coming up with a fully baked product through keen product development processes eliminated the market risk of the company and hence ensured its sustainability (Wieland, Hartmann, & Vargo, 2017).

Efficiency

The blue river technology sets itself aside from other companies through its high-efficiency level and strong brand position. The blue river products have enabled large-scale farmers to reduce the cost of labor and inputs greatly by ensuring input are only applied to the required plant and not the entire field and hence improved their profits (Schmidt Jr, 2017). The company has also been forging ahead with digitalization and ensuring it utilizes the latest technology in development and use of their product to increase its efficiency during use in the farms (McNeill, 2015). This has enabled the company to create a close relationship with their customers, strengthen the brand loyalty and hence ensured the sustainability of the company.

Downside Risk

Due to the keen analysis of the market done before its opening, the blue river company faces few downsides which include strict government regulation of the industry, lack of knowledge by the customer on use of the products and difficult in the expansion of business to include robots that can care for all types of crops (Osterwalder et al., 2014).

Conclusion

The blue river company has a well developed and elaborate business model. The business model demonstrates the close relationship between the nine elements explained. Further, the business has various strong factors including efficiency of products, good product development process and commitment to improvement. However, there is a downside of the company, which is characterized by lack of branches in most continents and countries and personnel to train potential customers on the use of the machine.

Recommendations

Based on the findings of the analysis of the blue river business model. The following recommendations have been made in order to increase the business profitability, increase the number of customers and ensure its sustainability.

• The company should employ more personnel to educate potential customers about the use of the company’s product in order o increase its customer base. Teaching the customers on how to use the robots effectively will increase the probability of customers purchasing the machine.

• The company should also invest more and delocalize its business and open branches in different continents and countries where large scale is practiced. This will not only increase its profit margins but also ensure its continuity.

Appendix

Appendix A

Business model canvas

Key partners

Technology vendors

Investment partners

Key activities

Production

Marketing

Management

Research and development

Value propositions

Saving on inputs

Improving the economics of the farmers

Customer relationships

Customer trust and convenience

Customer segments

Cotton growers

Lettuce growers

Large agribusinesses

Key resources

Computers

Tractors

sensors

Channels

Business agents

retailers

Cost structures

general administrative costs

product development

Marketing and sales.

Revenue streams

Asset sales

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