Carbonculcha has a number of strategies in its business model to delivery above average returns for investors.

Cost Leadership Strategy

Carbonculcha’s ability to produce large quantities of carbon credits at cost effective prices is made possible using a ‘sweat equity’ model that is utilised when working with indigenous communities.

Carbonculcha, by virtue of its relationships with indigenous landholders has preferential access to raw materials (land and tree seedlings), components (knowledge and skills base), and willing labour.

Carbonculcha’s implementation of the business model will also benefit from:

• products designed for ease of production;
  using the power of natural processes
  
  
• sustained access to inexpensive capital items
  such as land
  
  
• close supervision of labour & on-the-ground management
  
  
• tight cost control utilising naturally occurring
  raw materials wherever possible
  
  
• incentives based on quantitative targets
  to encourage rapid scalable production
  
  

Differentiation Strategy

Carbonculcha’s differentiation is aimed at the broad market that involves the creation of a product or services that is perceived throughout its industry as unique. Carbonculcha may then charge a premium for its product.

This specialty is associated with design, brand image, technology, features, dealers, network, and customers service. Differentiation is a viable strategy for earning above average returns in the carbon credit market because the resulting brand loyalty lowers customers' sensitivity to price. Buyers’ loyalty will also serve as an entry barrier as new competing firms must develop their own distinctive competence to differentiate their products in some way in order to compete successfully.

Points of Differentiation:

• Risks & Mitigation
  – the use of differentiation to mitigate risk
  
  
• Use of software modelling tool to create lowest risk profile for permaculture sink development
  
  
• Community engagement and training for employment within the project
  
  
• Diversification within the carbon sink plantation using Permaculture design
  
  
• Diversification across locations/states;
  different rainfall and climate patterns
  
  
• Diversification across several different
  revenue streams

Focus Strategy

In this strategy Carbonculcha concentrates on a select few target markets. By focusing marketing efforts on one or two narrow market segments and tailoring our marketing mix to these specialized markets, Carbonculcha can better meet the needs of that target market.

Carbonculcha typically looks to gain a competitive advantage through effectiveness rather than efficiency. A focus strategy will select targets that are less vulnerable to substitutes or where a competition is weakest to earn above-average return on investment.

Carbonculcha ’s focus strategy is with Australia’s largest polluters (members of Minerals Council of Australia) who are also coincidentally the businesses that form the backbone of Australia’s economy.

Carbonculcha identified a number of methods
for the generation of revenue from the business model including:

• Production under contract (typically from a large polluter): Carbonculcha develops Carbon Estates with contracts to third parties for the sale of the Carbon Credits produced based on agreed pricing parameters.
  
  
• Open production: Carbon Credits are produced and sold in an open emissions trading market.
  The National Emissions Trading Scheme should provide a regulated liquid market for Carbon Credits that would enhance this sale process.
  
  
• Production of carbon credits on leased purchased land as a long term revenue generation scheme
  in the form of a carbon estate. Carbonculcha will enter into contracts and agreements with land holders to gain a % commission on the sale of carbon credits.