Abstract
Most literatures for business models of retailers focused on general merchandise stores; few studies targeted at business models of specialized home improvement and decoration retailers. Based on business model theory, this thesis analyzed core competencies and business models of home improvement and decoration retailers in a case study of Test Rite Retail Group. This thesis analyzed how home retailers maintained operation performance in a nearly saturated market, changing environment and diversified channel development. We also proposed how home retailers reacted to changing customer value proposition and held exactly in hand the customers’ behaviors for further customer segmentation, revenue model adjustment and collaboration of key resources and key processes. Business model theories studied in this thesis included Hamel business model, Wei-Zhu business model, white space strategy in innovative market and 4-box model in business model innovation. Key elements found in the study included customer value proposition, profit formula, key resources and key processes. Moreover, retailers, facing end customers, should investigate customer needs and use information technology in customer segmentation to know customers’ behaviors better. If the real customer demands were not understood, retailers could not become a customer-oriented business, and thus could not yield best interest. Therefore, customer segmentation and customer value proposition complemented each other to achieve maximum benefits for the enterprise. Accordingly, business models were created for home improvement and decoration retailers. Operation of these models was illustrated by five key elements: customer value proposition, customer segmentation, profit formula, key resources and key processes. We also compared the differences between business models for home improvement and home decoration retailing businesses. Time changes fast, the life cycle of business shortens significantly, and innovation becomes necessary for sustainable management. In conclusion, business model innovation is required to develop new core competencies and brand new market.