Julia Uvarina National Research University Higher School of Economics, Russia

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1 Julia Uvarina National Research University Higher School of Economics, Russia Business model for a service oriented company ( based on veterinary business) Abstract This paper offer a business process modeling solution for a service-oriented companies. The study is based on the learning the experience of different authors in service and businessmodel sphere and creating a typical business-model for a service oriented company. The main identified challenges are the following: poor quality of the designing the business models of managers of service companies, in spite of the knowing that in the last years Russia is characterized by the widely development of the service sector. In this paper we also want to present the circumstances of dealing with the ontology of veterinary companies, and based on special blocks of the business-models for a service-oriented companies (created in section 2) we will try to deal with the current trends and methods of doing business in this area, including the characteristics of their business processes, marketing, and management functions. This information is based on research conducted with the owners and managers of several veterinary clinics in Canada, Germany, Czech Republic and the Russian by the method called expert interview. It is important to understand how they work and to identify their main characteristics in order to create a special (or universal ) business models for companies in veterinary sector. Particular emphasis is placed on the development trend of the veterinary industry in Russia compared to the same abroad. Authors are interested in understanding how the vision of the leaders of Russian veterinary sector on doing their business and building business modes has been changed for the last years. Because at the moment no doubt remains that the veterinary business in Russia - it is one of the industries that will only develop in the future, as it is with private medicine nowadays. Key words: business model, service-oriented companies, business-model canvas, the veterinary business, veterinary clinics 1. Introduction Doing business in the service sector as opposed to the industry and trade has its own distinct characteristics, which allows us to consider the scope of services as a separate line in the commodity market. Service companies are characterized by certain methods of their formation, planning, development, allowing enterprises to solve their current and future challenges, develop new markets and create new services to meet the growing demands of the market. Service - a set of intangible activities carried out in order to meet the needs and requirements of customers that do not lead to possession of anything. [2] Therefore, for effective business organization in the service sector, its visualization, to put it simply - a visual representation of how to guide the company and for its employees, investors, partners and customers, it is useful to use a tool such as business modeling. 2.Business-models Many books and articles have been published nowadays covering various aspects of creation and using of business models. The terms " business modeling " and " business model " is so often used, that it creates the impression of extreme clarity. However, even the first attempt to review the basics of building, purpose and using of one or another business model reveals a problem area, that sticks even experienced managers. The need for establishment an innovative business model grows with the knowledge of the application of this concept. This is confirmed by the intensity of the publications on this issue, which grows like an avalanche. Thus, the concept of "business model" is intended, on the one hand, to cope with the difficulties and uncertainties of building the modern company. On the other hand, the creation of the model - always a creative process in which exceptional value gain subjective features that eventually, "as diverse a verbal description of the system and its desire to formalize the results in an abundance of ideas about it." [3] 3.Business-models for a service-oriented companies 1

2 In developed societies more than 60% of the work force is dedicated to the delivery of services [9]. The main provision of functioning of service companies is that the consumption of services is more consumption of the process, not the result, in which the user consider the production process as a component of consumer services, not only consume its result, as in the case of material goods. During the consumption of material goods customers use the product, that is the result of consuming production process. Consuming the service clients, conversely perceive their production process or in part, or ( more often) in general, as well as themselves take part in this process. Consumption of services gives a result which is the result of a process of customer service. Thus, consumption of the process is the most important service in the service provision. [7] Different authors in the majority of their business models have focused on the most important components of the services - the process itself, as well as offering to customers, but about getting feedback from customers ( and in-depth study of them ), and most importantly - the proper organization of employees they have not take into account, in spite of the process of client staff it is the service. This conclusion arises when considering the basic characteristics of service businesses that different scientist define their own way. All the authors identify virtually the same properties of services that affect the features of building a business in this area. It is necessary to review the activities of service companies in details in order to find and follow the relationships between the individual elements. To do this, we have chosen some of the business models, and open up them in more details, in accordance with the needs of service companies. From 9 elements described by Osterwalder, talking about service companies? It is important to pay special attention to the following units : Consumer, Customer relations, Services offer, Partners and Resources. Additionally we must enter the unit Staff. After all, the service is the process of relations between the employees of the company with customers, so the item can not be the components of any unit, it must be distinguished in a separate part of the business model. Of course, we can not remove from business model the Finance, especially in the service industry we should pay special attention to such component as Pricing. All elements must be considered in the relationship, so to represent the business model we have combined some of them getting 5 blocks of service business ( Figure 2): Block 1: Service: Resources + Value for the customer, Block 2: Partners, Block 3 Consumer (relations with customers), Block 4: Staff, Block: 5 Finance 2

3 Service Description of services Technological resources: knowledge, technology, the customer's time offer Creating the conditions of service Transparency of service activities ("marks tangibility") Innovation (the development of competences) Partners Network of partners brand name The process of rendering (consume) services segmentation Contacts The relationship with the client individual approach Consumer consumer reaction (expected and perceived quality) Scenario of using the resources The cost structure Finances Pricing Structure of earnings Staff Administration synergistic effect The system of internal marketing - loyal employees Education, motivation, engagement, monitoring employees company Figure 2. The working diagram of a typical business model for a service oriented So, this is the working diagram of a business model of service company, that performs its basic functions: describes the value offered by the organization to different users, displays a set of conditions and resources to provide services and partners that are required for the creation, visualization ("marks tangibility"), marketing and delivering this value by properly-built teamwork of the staff. The most important is that this model takes into account two main factors for the service organization that affect the steady stream of revenue: 1. The scheme of work of employees, its role and value in the delivery of services. In services, it is the people (employees of companies that provide services) - a key element of management strategy of the firm. 2. Maintaining relationships with clients (feedback). An important component of this model is - customer focus - the image of a variety of business communications - units within the company and with the outside world. Customer focus - these are employees, business - processes, products and services that evoke positive emotions (sometimes even fanaticism ) for existing customers, which leads to their re-purchase and acquisition of new customers through recommendations from existing customers. So, customer focus is projected on the all business processes of the company and is reflected in the client's perception of the service. 4. The business model for the veterinary business The future of service companies is clear. Customers are more demanding and are likely to be more discerning and better informed. Veterinarians should consider the business environment as more than just raise the standards of service quality, it is necessary to recognize 3

4 the difference between price and perceived value. Understanding and value of design, marketing and modeling is becoming increasingly important. According to the statistics profession of veterinarian in Western countries is among the ten most respected and well-paid professions: in Germany - 4th place, in Canada - 4th plac, in the Czech Republic - the third place, ahead them only architects, cosmetic- and neurosurgeons 1. Therefore, in this article, we decided to study the experience of the veterinary business of these particular countries. Based on the information about the work of veterinary clinics in Canada, Germany, the Czech Republic and Russia nowadays can be identified 5 types of business models of organization on this market : general practices clinics (first line), the reference hospital (engaged in complex operations in different areas), clinics all in one, ambulance (emergency) ( usually near the first line clinic), as well there is a model of clinics in agricultural universities, but they are usually are positioned as research centers and are not commercial organizations, so this kind of veterinary organizations in the framework of this article, we will not consider. We are interested in the peculiarities of the different types of veterinary clinics in terms of distinguished blocs of the business model for the service company. To deal with it, a research among the owners and managers of veterinary clinics in different countries (Canada, Germany, Czech Republic, Russia ) on the topic about the organization of their clinics and functioning of the business was conducted. Interviews were held both in clinics and during business conferences and seminars organized in different cities and countries by the Ural Association of practicing veterinarians. The purpose of the research: to identify the characteristics of different kinds of veterinary clinics within the major blocks of business models for service companies. Methods of the research:survey, interviews, modeling Object: The owners and managers of veterinary clinics Subject: features of decision- making by managers of veterinary clinics and organizing the activities in the five blocks of the business model of service companies (Service ( Resources + Value for the customer ), Partners, Customers ( customer relationship management), Employees, Finance ) After analyzing the selected features of management of veterinary clinics in the blocks of the business model of the service industry, we have come to the conclusion that in order to build a strategy for the development of any veterinary clinic, to see its structure and define the elements of the business model it is necessary to classify it to specific type of veterinary sphere ( general practice clinics (first line), the reference clinics, clinics all in one, emergency), so far as each type has its own characteristics in filling the blocks of business model. As can be seen from the survey, heads of veterinary clinics (especially in Russia ) generally do not have such a clear vision, often mixed clinics of all sizes and orientation, thus losing the ability to represent their business structured and have a clear position on the creating the strategy of the company. Thus, we have analyzed the business model of veterinary companies and created a general list of the fundamental differences between the types of business models which affect the launch strategy and development of the clinic. This is useful for understanding the ontology of the clinic, its attribution to a particular business model and the definition of its main landmarks. In addition, the classification is useful for designing a business model for any veterinary clinic, as all criteria are connected with blocks of Business Model Canvas and help to understand what one or the other section means for this specific veterinary clinic. The results of the research: 1 Tsareva D.S "On the History of Veterinary Medicine" Omsk State Agrarian University im. Stolypina P.A., supervisor Ponyatovskaya A.G. Conference "Vestnik. Science and Practice " 4

5 - the features of different types of veterinary clinics and managerial decision-making leaders veterinary clinics in five blocks business model service companies have been analyzed - the classification of business models of veterinary clinics have been developed, -the criteria for classifying business models veterinary clinics, as the brightest representatives of the service sector, have been created 5.Conclusion To sum up it should be noted that a decade ago a veterinary for pets in Russia was not considered as a business, there were small cabinets, in which veterinary alone serve its customers from the neighboring houses. Now the Russian market also has a tendency to develop a veterinary clinics providing a full range of services (by their own or with the help of a comprehensive affiliate network). At the moment, in the country are only a few centers "All in One " because it requires a fairly large investment with a payback of 7-10 years, but, as can be seen in the results of the research, the managers of clinic, being (mostly) veterinary doctors are trying to develop their managerial skills and apply professional management tools. They consolidate to make the exchange of information in order to develop their skills and work. They have a vision on many blocks of the business model, and intuitively they have to make management decisions. It will be easier to do if they have a clear, structured understanding of the organization of work on the basic blocks of the business model. Therefore, the necessity and urgency of the classification of business models for the veterinary industry developed in this article is obvious.. 6.References: 1. Soolyatte A.Y., Business model - the key to business development based on innovation. Management innovation, 01 (09): Burmenko T.D., Scope of services: economics, management, and marketing. Textbook.pp: Akatov N.B. 2012, Business models and their application in the management of an innovative self-development, Perm National Research Polytechnic University, Perm, pp: Simona Kleinhempel, Stefan Nitchi, Business Process Management in Serviceoriented companies, Informatica Economica,vol.14,no 3: Osterwalder A., Pigneur Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. John Wiley & Sons, New York, NY. 6. Angeles Montoro-Sanchez, Competitive dynamics and business models in service business: a promising research subject, Springer-Verlag, pp: Christian Gronroos, 2009.Marketing services: the case of a missing product, Management daydgest, 5 (05): Christopher Lovelock, Gammesson Evert,2009. Marketing service what next? In search of a new paradigm and fresh trends, Marketing and Market Research, 02 (62): Alexandra Florea, Anca Andreescu, Vlad Diaconitad, Adina Uta (2011). Approaches Regarding Business Logic Modeling in Service Oriented Architecture, Informatica Ecomomica, vol. 15, no. 3: David J.Teece, 2010 Business Models, Business Strategy and Innovation, LRP 43: