7.3 Business Model Canvas
Maps nine building blocks showing how you create, deliver, and capture value. Launch on platform.
What is it?
The Business Model Canvas (BMC), developed by Alexander Osterwalder and Yves Pigneur in 2010, is a visual strategic management tool designed to help organisations clearly and succinctly articulate, analyse, and refine their business model. BMC provides a structured snapshot of how an organisation creates, delivers, and captures value.
Why is it useful?
Applying the Business Model Canvas helps you to:
Clarify strategy visually: Easily communicate your business model through a clear, intuitive layout.
Identify gaps and opportunities: Quickly spot areas for innovation, improvement, or optimisation.
Align teams effectively: Ensure everyone understands how the different components of your business model interact.
Adapt rapidly: Use the canvas to quickly test assumptions, pivot, and respond dynamically to market changes.
How does it work?
The BMC divides your business model into nine key building blocks:
Customer Segments
Focus: Clearly identify distinct groups of people or organizations your business aims to serve. Example: Millennials, enterprise clients, small businesses, premium users.
Value Propositions
Focus: Define clearly the value or benefit your product or service offers customers. Example: Convenience, cost savings, enhanced productivity, superior user experience.
Channels
Focus: Clearly outline how your product or service reaches customers. Example: Online stores, direct sales teams, retail distribution, mobile apps.
Customer Relationships
Focus: Clearly articulate how you interact with customers and build loyalty. Example: Dedicated support, self-service platforms, personalised experiences, subscription models.
Revenue Streams
Focus: Define clearly how your business earns money. Example: Subscription fees, sales revenue, licensing fees, advertising income.
Key Resources
Focus: Identify critical assets or resources required to deliver your value proposition. Example: Intellectual property, skilled workforce, technology infrastructure, strong brand.
Key Activities
Focus: Clearly articulate essential actions needed to operate successfully. Example: Product development, supply chain management, marketing, customer support.
Key Partnerships
Focus: Clearly identify important alliances and strategic partnerships. Example: Suppliers, distributors, technology providers, strategic alliances.
Cost Structure
Focus: Outline clearly major costs associated with running your business model. Example: Fixed costs (salaries, rent), variable costs (materials, production), marketing expenses.
Turning BMC into Action
To effectively apply the Business Model Canvas:
Visualize clearly: Use the canvas to communicate and refine your business model visibly with teams.
Evaluate strategically: Regularly review and adjust each building block, identifying strengths and weaknesses.
Test and adapt: Continuously test assumptions underlying your model, adapting quickly to market and customer insights.
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