Businessmodel of Alcoa

Customer Segments

Alcoa has a diversified markets business model, with customer groups that have very different needs. It targets its offerings at the following markets: Aerospace, Alumina, Aluminum Ingot, Automotive, Building and Construction, Commercial Transportation, Consumer Electronics, Defense, Electric, Industrial Gas Turbines, Industrial Solutions, and Packaging.

Value Proposition

Alcoa offers two primary value propositions: innovation and brand/status.

The company has embraced innovation from its very start. Its contributions include the following:

• Making aluminum production economical through electrolysis of bauxite ore
• Building the first aluminum-sheathed skyscraper in the U.S.
• Producing the first aluminum wheel for a passenger car, the Cadillac Eldorado
• Developing the first canned beer easy opener system

• Creating the RSR joining system, which enables automakers to switch between weld types The company has established a powerful brand due to its success. It is the world‘s third largest producer of aluminum, and one of the largest manufacturers of lightweight metal products made of aluminum, nickel, and titanium. It maintains operations in over 200 locations in 30 countries. Lastly, it has won a number of honors, including the following:

• Recognition as Most Admired Metals Company in the World by *Fortune *
• Duty of Care Award (partnerships category) by International SOS Foundation
• Recognition of Dura-Bright EVO as a Top 20 Product by Heavy Duty Trucking Magazine
• Recognition as Company of the Year (non-ferrous metals) by Brasil Mineral Magazine
• 2015 Supplier Award from Gulfstream for Alcoa Forgings and Extrusions ### Channels

Alcoa’s main channels are the company’s business development and sales teams. The company promotes its offering through its website, social media pages, and participation in conferences.

Customer Relationships

Alcoa’s customer relationship is primarily of a self-service nature. Customers utilize its products while having limited interaction with employees.

Key Activities

Alcoa’s business model entails designing, developing, and manufacturing its products for customers.

Key Partners

Alcoa’s key partners are the suppliers who provide raw materials and components for many of its products. The company also partners with customers from time to time as part of the product development cycle in order to incorporate their preferences into new offerings.

Key Resources

Alcoa’s main resources are its physical resources. It operates the world’s largest light metals research facility (in Pittsburgh), maintaining similar hubs around the world.

It is also building a $60 million manufacturing center that will focus on advanced 3D printing techniques and materials; the center will be part of the company’s current R&D center.

Lastly, it depends on human resources in the form of the engineers and scientists who design, develop, and manufacture its solutions.

Cost Structure

Alcoa has an economies of scale cost structure, with costs per unit output dropping as output expands. Its biggest cost driver is cost of goods sold, a variable expense. Other major drivers are in the areas of sales/marketing, research/development, and administration, all fixed costs.

Revenue Streams

Alcoa has one revenue stream: revenues it generates from the contracts it forms with clients to sell its products to them.