Business Model Formulation For Yarn Store As Cultural Tourism: A Case Study of Mondu Crafts

This study aims to develop a sustainable business model for the first physical store of Mondu Crafts, a yarn store targeting cultural tourism. Research objectives include analyzing market characteristics, identifying factors affecting the business, and designing a suitable strategy. A mixed-method approach was used, employing questionnaires and interviews, analyzed through descriptive and cross-tabulation methods. Key findings indicate strong interest in Mondu Crafts, especially among females aged 17-35. High-income groups face time constraints, while lower-income groups face budget limitations. Strategies such as offering free, short trial workshops are recommended. Results highlight the trend for one-stop shops, integrating sightseeing, food, activities, and souvenirs. Long-term sustainability suggestions include integrating AI-based language translation services and eco-friendly initiatives. Establishing Mondu Crafts Cafe & Store in Bandung is both market-viable and financially feasible, with potential expansion to Bali for a broader reach. The study provides practical insights for developing a robust Business Model Canvas for a creative economy as a cultural tourism.


A. INTRODUCTION
Tourism is crucial to Indonesia's national development, ranking as the second-largest contributor to government foreign exchange earnings since 2016 (Mayasari & Rahardjo, 2018).Despite experiencing a downturn during the COVID-19 pandemic, the sector rebounded in 2022 and continues to grow steadily (Badan Pusat Statistik, 2022).Additionally, Indonesia's rich natural resources, including fibers like cotton, sisal, and silk, are vital for economic growth and reducing import dependency (Suparno, 2020).These fibers are predominantly used in the textile industry, including the craft sector, a significant component of Indonesia's creative economy (Amalia et al., 2020).
Handicrafts have traditionally served functional and ceremonial purposes within artisan communities.Today, they generate substantial income and offer opportunities for leveraging sales in tourism and export markets, particularly in developing countries (Popelka & Littrell, 1991).The Ministry of Tourism and Creative Economy has ranked the craft sector as the fifth most promising subsector of Indonesia's creative economy for 2023-2024, with expectations for significant growth in the global market.
Mondu Crafts, established in 2020, is capitalizing on this trend by offering punch needle embroidery supplies through e-commerce and hosting workshops.The business aims to dispel the notion that yarn crafts are difficult to learn or exclusive to a specific demographic.Mondu Crafts has conducted workshops for over 1,000 students across Indonesia and Singapore within just one year.With increasing demand for its products and workshops, the business needs to plan for expansion.However, Mondu Crafts must address challenges such as low repeat customer rates and limited product variety to sustain growth.
This research aims to develop a sustainable business model for Mondu Crafts by integrating elements of cultural tourism.Utilizing the Nine Building Blocks of the Business Model Canvas (BMC) framework by Alexander Osterwalder, this approach will help analyze key aspects of the business model.It will enable Mondu Crafts to understand its dynamics, adjust strategies to capitalize on opportunities, and address challenges effectively.

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Furthermore, the research will examine market characteristics and internal and external business factors through SWOT and PESTEL analyses.According to Matovic (2020), the PESTEL analysis covers political, economic, social, technological, environmental, and legal factors, providing a comprehensive understanding of the macro-environmental influences on the business.The SWOT analysis will help identify and leverage internal strengths and external opportunities while addressing weaknesses and threats (Hubeis et al., 2013).The ultimate goal is to develop effective strategies to position Mondu Crafts as a thriving cultural tourism destination, enhancing its competitive edge and contributing to the national creative economy.The paper will include sections on research methods, results and analysis, and conclusions.

B. RESEARCH METHOD
This research employs a mixed-method case study approach, integrating qualitative and quantitative methods within a sequential exploratory research model.The qualitative component involves descriptive research using SWOT, PESTEL analyses, and the Business Model Canvas (BMC) framework.The quantitative aspect complements this by utilizing surveys to assess population interest in the yarn store industry.Data sources include primary data collected through interviews and questionnaires and secondary data from documents, reports, and previous research.The questionnaires incorporate open-ended and closed-ended questions, covering various indicators: Demographic, Craft Customer Preference, Purchasing Behavior, Information, Channels, Competitor Analysis, Tourism Preference, Future Intentions, Suggestions, and Follow-Up.
To analyze market characteristics, the questionnaire questions were designed based on the study by (Krishnaraj et al., 2022), highlighting that demographic factors such as age, income, and social factors significantly affect consumer purchasing decisions for craft materials.This research emphasizes tourism, aligning with the study, which discusses how demographic factors, including age, gender, income, and residence, influence travel behavior.The questionnaire targeted respondents with diverse demographics, including variations in age, gender, residence, hobbies, income groups, and travel preferences.This diversity was essential for identifying distinct market segments and understanding their behaviors and needs.Given the focus on domestic and international tourists, the survey was distributed to a broad demographic within and outside Indonesia.The target population consisted of 300 respondents, including both active participants in crafts and non-participants, to evaluate their interest in visiting Mondu Crafts as a cultural tourism destination.Survey questions are presented in Table 1.Recognizing that this data alone might not fully identify gaps for business model improvement, an additional data collection method was employed.
Table 1.Questionnaire Data analysis employs an interactive model using qualitative techniques such as data reduction, display, and conclusion drawing.Quantitative analysis involves descriptive analysis and cross-tabulation to explore relationships between indicators.The research framework integrates findings from studies on consumer purchasing behavior and travel behaviors collected through questionnaires and interviews and combines them with results from PESTEL and SWOT analyses to develop a strategic Business Model Canvas.

C. RESULTS AND ANALYSIS
Mondu Crafts has established a strong online presence, attracting a core audience of women aged 18-34.Despite competition from local and regional brands, the company sets itself apart through rich educational content and an innovative approach.To gain a deeper understanding of the Nine Building Blocks of the Business Model Canvas, a comprehensive PESTEL and SWOT analysis was conducted.

PESTEL Analysis
The Indonesian government's "Indonesia Emas 2045" program, aiming for significant economic and social advancements by 2045, emphasizes the development of creative industries, which directly benefits businesses like Mondu Crafts.Government policies, including grants, incentives, and infrastructure development, create a favorable business environment that aligns with Mondu Crafts' mission, facilitating access to resources and potential collaborations with government initiatives.Economically, Indonesia's stable inflation rates and competitive labor costs create a conducive environment for Mondu Crafts' operations.Support for small and medium enterprises (SMEs) through financial assistance and low-interest loans further strengthens the company's position.Additionally, infrastructure improvements such as highspeed rail and enhanced road networks enhance logistics and distribution, although the redirection of Husein Sastranegara International Airport to Kertajati presents logistical challenges for tourism businesses in Bandung.
Socially, the growing popularity of crafts among Indonesia's youthful population and the trend towards DIY projects and creative hobbies presents a ripe market for Mondu Crafts.Leveraging Bandung's rich cultural heritage, the company can attract tourists and locals, offering a unique blend of traditional and modern crafting experiences.The cultural shift towards creative expression and appreciation provides a solid customer base eager to engage with Mondu Crafts' offerings.Technologically, Indonesia's rapid adoption of advanced technologies, such as AI and high-speed internet, supports Mondu Crafts' innovative │ 151 approach.AI integration for customer service and inventory management, along with robust online platforms, enhances customer engagement and operational efficiency, while high-speed internet facilitates seamless e-commerce experiences and virtual workshops, expanding the company's market reach.
Environmentally, Mondu Crafts is well-positioned to appeal to eco-conscious consumers by focusing on eco-friendly materials and practices, promoting recycling, and using natural fibers.Aligning with global Environmental, Social, and Governance (ESG) standards, Mondu Crafts can enhance its brand image and attract customers who prioritize sustainability, gaining a competitive edge.Indonesia's comprehensive legal framework supports business operations with clear regulations for SMEs and creative industries.The government's push for foreign direct investment (FDI) opens opportunities for Mondu Crafts to attract international partnerships and funding, ensuring smooth business operations and providing the necessary capital and expertise for domestic and international expansion.

SWOT Analysis
A SWOT analysis was conducted using the data collected from Mondu Crafts to assess its internal strengths and weaknesses and external opportunities and threats.This comprehensive evaluation aids in formulating strategies that leverage strengths, address weaknesses, capitalize on opportunities, and counteract threats.The findings are summarized in Table 3.
Table 3. Mondu Crafts SWOT Table Strengths Weaknesses Strong brand recognition, diverse product offerings, educational content, and robust online presence.
Limited initial reach, dependency on imports, and need for experienced staff.Opportunities Threats Rising tourism, government support, educational partnerships, and international expansion.
Competition, economic instability, regulatory changes, and cybersecurity risks.

Source: Research data, 2024 Survey Results
The demographic analysis of Mondu Crafts reveals that most of its customers are young adults aged 17-25, predominantly female, and residing in urban areas with moderate to high incomes.A strong interest in creative hobbies characterizes this demographic, and has the disposable income to spend on quality craft supplies and workshops.Interview respondents highlighted that this age group values experiences that combine learning and leisure, supporting the integration of workshops with tourism activities.Therefore, marketing strategies should target this segment, using messaging that resonates with their lifestyle and interests to achieve high conversion rates.
In terms of craft customer preferences, popular activities among Mondu Crafts' customers include paper craft, sewing, beading, crocheting, knitting, embroidery, and macrame, in that order.This suggests that Mondu Crafts should prioritize expanding its product line and workshop offerings in these categories.Both survey and interview data reveal a strong interest in these crafts, with respondents noting their therapeutic and creative benefits.Diversification efforts should focus on these crafts to meet customer demand and attract a broader audience.
Regarding purchasing behavior, quality is Mondu Crafts' customers' top priority when buying craft supplies, followed by promotions and clear product information.The average monthly expenditure on crafts is Rp 100,000-300,000.Interviewees emphasized that detailed product descriptions and customer reviews significantly influence purchasing decisions.This insight suggests that Mondu Crafts should maintain high-quality standards, offer frequent promotions, and ensure that product information is clear and detailed to enhance customer satisfaction and loyalty.
Social media emerges as the primary source of information for Mondu Crafts' customers, with platforms like Instagram, Facebook, and TikTok playing a crucial role in engagement.Interviewees confirmed that social media campaigns significantly influence their awareness and interest in new products and workshops.Effective social media marketing strategies, focusing on visually appealing content and interactive posts, are essential to maintain and grow Mondu Crafts' customer base.
Regarding purchasing channels, customers prefer buying craft supplies online and offline.Online sales are driven by convenience and broader reach, while offline sales, including pop-up shops and bazaars, offer tactile experiences important for craft enthusiasts.Interview respondents noted their enjoyment in the hands-on experience of seeing and feeling products before purchasing.Mondu Crafts should balance its ecommerce presence with occasional offline events to cater to both preferences, enhancing customer engagement and loyalty.
Finally, the competitor analysis shows that Crafts faces competition from local and regional brands offering similar products.These competitors often have established physical stores, broader product ranges, and aggressive pricing strategies.However, interviewees mentioned that Mondu Crafts' unique educational content and superior customer service are key differentiators.Mondu Crafts must leverage these strengths and regularly monitor market trends to adapt its strategies to stand out.Additionally, exploring partnerships for workshops and consignment sales with platforms like Splendour Workshop, Aneka Benang, and Blessings Art Space and potential collaborations with stores in other urban cities like Jakarta and Bali can further strengthen Mondu Crafts' market position.The survey results reveal that many Mondu Crafts customers are interested in tourism activities and favor destinations with engaging attractions, easy access, good facilities, and interactive experiences.Interview data supports this, with respondents expressing a desire for tourist experiences, including learning new skills and cultural immersion.Mondu Crafts can capitalize on this by positioning itself as a cultural tourism destination, offering craft workshops as part of the tourist experience, and integrating local cultural elements into its offerings.Additionally, many respondents expressed interest in visiting Mondu Crafts if it expands into a physical store and workshop center.Features like a cafe, yarn shop, state-of-the-art technology, and AI assistants for finding workshops and product information were particularly appealing, with interviewees noting that an AI translator could help overcome language barriers for international tourists.This feedback highlights the strong potential for Mondu Crafts to expand into a physical location, providing a comprehensive crafting and tourism experience.Customers also suggested improvements such as lower prices, more frequent promotions, enhanced product variety, and better service, with a particular demand for more diverse workshops and detailed product descriptions.Implementing these suggestions can refine business strategies and improve customer satisfaction.
│ 153 Furthermore, many survey participants expressed willingness to be contacted for further engagement, including interviews and receiving updates on new workshops and products.Interview respondents mentioned experiencing poor service due to cultural differences when traveling, emphasizing the need for an AI translator to bridge language gaps.This indicates a strong customer loyalty base that Mondu Crafts can tap into for future marketing campaigns and product launches.Based on these findings, it is clear that Mondu Crafts should focus its marketing efforts on young urban females aged 17-25 who are interested in creative hobbies and have disposable income for quality craft supplies and workshops.Expanding offerings in popular crafts like paper crafts, sewing, beading, crochet, knitting, embroidery, and macrame will cater to customer demand.Leveraging social media for engagement and balancing online sales with offline events will enhance customer satisfaction and loyalty.With this valuable market data, these insights will be applied to the Business Model Canvas (BMC) framework, enabling a systematic analysis and optimization of Mondu Crafts' business model for sustainable growth and competitive advantage.

Business Model Canvas
The survey results and interviews have provided valuable insights into the preferences, behaviors, and expectations of Mondu Crafts' customers.These findings underscore the importance of quality, the popularity of specific crafts, and the necessity for engaging and informative content.Additionally, they highlight the crucial role of social media and the potential for integrating advanced technology to enhance customer experiences.To effectively translate these insights into actionable strategies, we developed a comprehensive Business Model Canvas.This tool outlines the key components of Mondu Crafts' business model, ensuring alignment with customer needs and market opportunities.The Business Model Canvas provides a clear roadmap for leveraging strengths, addressing weaknesses, and capitalizing on emerging creative and cultural tourism trends, as detailed below.CONCLUSION Mondu Crafts has significant potential to become a key cultural tourism destination.Indonesia's growing creative economy, especially in tourism, provides a favorable environment for its success.The demand for interactive, educational experiences, high-quality, affordable goods, and sustainable practices aligns well with Mondu Crafts' offerings.The company's strengths, including its unique value proposition, diverse products, and strong brand recognition, position it well to attract local and international tourists.Mondu Crafts should focus on innovative products, partnerships with educational institutions, and expanding workshop offerings to leverage these strengths.Government support, like the "Indonesia Emas 2045" program, and evolving consumer trends toward cultural and experiential tourism further support its potential.
A suitable business model for Mondu Crafts involves targeting local crafters, tourists, corporate clients, educational groups, and international customers, particularly females aged 17-35 interested in arts and crafts.It should offer unique crafting experiences and eco-friendly products, collaborate with local artisans, and use online and offline channels for distribution.Customer relationships can be enhanced through personalized service, loyalty programs, and interactive workshops.Revenue streams should include craft materials, finished goods, workshops, online courses, and café services.Key resources include skilled staff, high-quality materials, and technological innovations.
To maximize success, Mondu Crafts should consider opening a branch in Denpasar, Bali, to attract international tourists, while the Bandung location can serve locals and tourists from the JABODETABEK area.This dual-location strategy allows for region-specific products and experiences.By focusing on inclusivity and a comprehensive visitor experience, Mondu Crafts can establish itself as a leading cultural tourism destination in both Theoretical insights suggest targeting young urban adults interested in creative hobbies.Essential elements include interactive experiences, online engagement, quality and affordability, and sustainability.Using the Business Model Canvas framework and focusing on specific customer will ensure alignment with market opportunities and promote sustainable growth.

Figure 2 .
Figure 2. Punch Needle Yarn Store Competitor Analysis Framework Source: Research data, 2024The survey results reveal that many Mondu Crafts customers are interested in tourism activities and favor destinations with engaging attractions, easy access, good facilities, and interactive experiences.Interview data supports this, with respondents expressing a desire for tourist experiences, including learning new skills and cultural immersion.Mondu Crafts can capitalize on this by positioning itself as a cultural tourism destination, offering craft workshops as part of the tourist experience, and integrating local cultural elements into its offerings.Additionally, many respondents expressed interest in visiting Mondu Crafts if it expands into a physical store and workshop center.Features like a cafe, yarn shop, state-of-the-art technology, and AI assistants for finding workshops and product information were particularly appealing, with interviewees noting that an AI translator could help overcome language barriers for international tourists.This feedback highlights the strong potential for Mondu Crafts to expand into a physical location, providing a comprehensive crafting and tourism experience.Customers also suggested improvements such as lower prices, more frequent promotions, enhanced product variety, and better service, with a particular demand for more diverse workshops and detailed product descriptions.Implementing these suggestions can refine business strategies and improve customer satisfaction.

Figure 3 .
Figure 3.The Business Model Canvass of Mondu Crafts Source: Research data, 2024

Table
Multiple ResponseBusiness Model Formulation For Yarn Store As Cultural Tourism: A Case Study of Mondu Crafts Ameera Rahil Sahira Widodo and Evy Rachmawati Chaldun The next step involves conducting semi-structured interviews with informants from diverse demographic backgrounds to gain deeper insights into crafting and tourism behaviors.Three informants from each age group will be interviewed, resulting in nine interviews.The following questions will guide these interviews:Table2.Questionnaire Table Where do you usually buy craft hobby products?Online (E-commerce, website, social media) / Offline (Store, Pop-up, Bazar) Close Competitor Analysis (F) Please mention the name of your preferred stores (you can list more than one): Open In your opinion, what is the biggest challenge you face when shopping for products or workshops?(Price too expensive / Difficult to reach the location / Opening hours do not match your free time / JCSAM: Journal of Consumer Studies and Applied Marketing, Volume 2 Number 2: 146-155 Source: Research data, 2024