In Chapter 3, we related the innovative leasing to the problems of the linear economy and how depleting materials resources has led to an economic downturn and expensive housing stock. The production of housing product in the conventional way has caused significant loss of renewable resources and created more wastage. Here, innovative leasing has introduced a different BM that creates a sustainable loop of lifecycle chain that gives future house buyers a better option in the form of the new concept of housing ‘ownership’. company value propositions double unit single unit/ studio unit duplex unit target customers
young starters/ single occupants
short commitment person
young family
key resources
manufacturing facilities, marketing office, customer service centre, trucks, machines, factory, storage designers, marketing, engineers, labours, technicians partnership sanitary fittings kitchen suppliers wardrobe & built-in services / utility
channel & network
showroom, exhibition social medias, internet platform key activities
prefabricated housing, producing module units, services for customers
financial advisor / consultancy relocation, refurbishment, moving services
revenue streams
recurring money from leasing product and service and economy of scale marketing and manufacturing resources
logistics, installation, equipments durable products, exciting design and long lifespan products
cost structure
monthly fees according to the period for services provided and unit used the continuity of the business depends on the innovation of the new products, design and attractive financial offers
customer service
establish relationship with the customers throughout the tenureship e.g. free consultancy the freedom to change design with flexible payment
easy relocation with free moving cost
all-inclusive package for hassle-free term of payment
FIGURE 4.20 Draft business model of flexZhouse
The new concept of housing ownership has changed the paradigm to the long-term (rental) income for the housing producer and the housing producer is now responsible for the product, which includes risk and cost of waste. In a nutshell, the housing producer will take responsibility for its own actions.
Prefab company
remodelling, refurbish
stock less natural
resource input less waste
how it works?
step 1 move in
single unit studio unit
step 2 move out single unit double unit step 3 new customer move in
after remodelling, refurbish
new unit
year value
Building shell constructed by shared equity from the government with minimal rental
Infill produced by prefab company, own by the company, flexible rental according to users financial capability
the number of stock will depend on the number of slots, therefore there will be no issue of overload- ing stock the production will
reuse the existing material and spend on the refurbishment of stock not on new
resources
no further waste is produced, all products used must have the possibility of recycling and remodelling and have a long time
span
make order
LEASING CONTRACT Min hold of the unit - 12 months Tenant agree for relocation but with
minimum 2 months for notification in
advance by the prefab company Tenant need to inform prefab company 3 months (at least) in advance to change module unit
All maintenance,complaints, services of the
unit will be addressed to the prefab company
All maintenance of the general services, common area, public utility will be addressed
by the appointed maintenance company
STOCK MANAGEMENT
The prefab company will hold the existing
stock of modular unit
The value of the skeleton and the value of the infrastructure of the building can be maintained on the long-time basis
The value of the infill can be maintained through the ownership of the unit, this will
lower cost based on the lower natural resource input at the same time reduces the production of waste
Figure 4.21 Draft business framework of flexZhouse
In the flexZhouse BM, the company will emphasize on the customer satisfaction not only on the selling part. The main revenue will come from the recurrent fees based on the leasing activities, coupled with maintainence activities. The next idea is to introduce usage fees based on the component that included in the package prepared by the company. The flexZhouse BM shifts to a new skill that promote durable product for the housing component. The value creation expected to be delivered through customer satisfaction rather than high sales . This can be done through prudent use of the energy, resources and a high quality housing component. In this case, the customer will have peace of mind and satisfy with the product and contribute to a long-term relationship with the company.
From the company standpoints, this approach will benefit on the reduction of resource consumption investment and increase their revenues at the same time. In relation to that, the flexZhouse BM contributes to the sustainability cause in the local housing scene and helps to reduce carbon footprints caused by conventional housing construction.
Initially, it is suggested that the government becomes the first party to initiate the project by acquiring the land and subsidizing the construction of the structure. The government under its housing agency will then construct the structure at the selected area or targeted area that has potential for the scheme. Next, the government will invite tenders for the infill (housing units) and then the selected suppliers will produce and apply the concept of the BM (Figure 4.19. The housing units or components will be leased to the potential customers and will have to be returned to the housing producer after the customer move out. In the original contract, it is suggested that the minimum contract term for the units should be 12 months, and tenants should agree to give a minimum of 2 months’ notice before relocating. In the event of changing the module, the tenant will be required to inform the suppliers three months in advance that he or she wants to change the module unit. All maintenance of the general services, common area and public utilities will be handled by the maintenance company appointed by the company providing the infill.
In this framework, it is suggested that the monthly commitment for the users will be based on their financial capability and based on the 30% of income rules. The payment will consist of the rental payment for the structure, the infill and the maintenance of the building. The business lifecycle shows the potential of the circular economy through the remodeling and refurbishing of the existing unit/module for the next customers.
acquire land government prefab company shell/ structure maintenance company construct shell 1 2 infill open tender 3 supply T K B S services make order remodelling, refurbish stock suppliers users prefab company
appoint maintenance company
4
government
responsible for the construction of the shell
the shell will be constructed in modular to allow for additional units in the future
responsible for the appointment of the manufacturer
providing consultation on spaces required for each customer according to needs and financial capabilities customer allow customising their needs for spaces
Responsible for providing zero cost for moving
packages are all-inclusive* the company will responsible for the monthly rental for shell+ infill +maintenance
responsible for maintenance of the shell, common area, rubbish collection
responsible for the maintenance of the services,common ‘tap point’ for services
responsible for the elevator services and cleanliness of the compound area
CONSTRUCTS THEORETICAL QUESTION GAPS ELEMENTS OF BM
Design perspective: market needs, demo- graphic changes, demands, choices
What will be the appropriate products and services to suit the needs of the target customer (young starters)? How can the new BM learn from the manufacturing sectors to improve its customer service?
What type of products and services sup- port housing customization?
Target customers, customer services, value propositions
Financial perspective: innovative leasing, financial capability, flex-term
What would be the appropriate duration of a contract in order to have real return investment?
How much is the customer willing to pay and how (mechanism)?
Would there be any option for ownership for a loyal customer?
What would be the best payment mecha- nism? Monthly arrangement of leasing?
Revenue streams, cost structure, key resources
Supply chain perspective: supply chain, production time, lead times
What are the main activities of the com- pany and who is involved in the supply chain?
What kind of partnership can the new BM establish to ensure smooth operation and the proper delivery of the product to the customer?
How can the new housing suppliers create awareness of their products and improve the network?
Partnership, key activities, channel & network
§ 4.3.1
Theoretical contributions to the formulation of the conceptual framework
The theoretical part of the thesis has resulted in the induction of a set of analytical factors that will function as the basis for the further theoretical development of the lifecycle chain in the flexZhouse model. Since this research is prescriptive and contributes to the design sciences, it is necessary to develop the theoretical proposition for a guidance to be used for the empirical analysis in the next part of the research. Beforehand, the following analytical factors serve as guidance for the empirical chapter later.CONSTRUCTS ANALYTICAL FACTORS STRATEGY OF INQUIRY
Customization
the market needs, demographic changes, demands, choices
Design options to support the idea of customization
Investigation of the needs and choices of the target market, namely current and future young starters in Malaysia Type of customer relationship to prolong services to the customer
Design workshop with architects, focus group with young starters
Affordability
financial capability, flexible financing, terms of payment, payment options
Exploring the housing problems for young starters, the financial affordability How can they pay (method) and how much they can pay?
How can the company create revenue?
Focus group with young starters, representative from private developers, entrepreneurs, NGOs and government agencies dealing with housing
Supply chain
supply chain, production time, lead times, managing the housing stocks
Exploring the possibility of the new mod- el to fulfill the gap, waiting time, quality and workmanship of the product/ unit
Focus group with young starters, representative from private developers, entrepreneurs, NGOs and government agencies dealing with housing
TABLE 4.9 Analytical framework
In summary, we aim to offer an innovative BM and a way to provide young starters in Malaysia with housing that is affordable and flexible in terms of design and offering. At the same time, we aim to provide housing that improves the bureaucratic process and provides quality housing. In order to accomplish that, we described the flexZhouse BM and we aim at giving ‘answers and meaning’ that are holistic, explanatory, context bound and qualitative by nature, as suggested by Leedy and Ormrod (2005).
problems / pr ior i constructs theor ies / literature BM components