This is a complete guide on how to use the Business Model Canvas. I have also included some downloads for high-quality pdf versions of the Business Model Canvas, the popular canvas created by Osterwalder and Pigneur.
What Is A Business Model Canvas?
A business model contains nine separate components. With the result that the nine parts together combine to create value. Business modelling now is one critical part of assessing a digital strategy.
A model is easy to understand and analyze. Moreover, it provides a common framework that managers can use to develop new models. Most companies need to be more innovative. As a result, modelling is a creative way to explore new business opportunities.
Today there is a larger variety of how companies can make money. Much is due to new technologies. As an example the Blockchain.
How To Map A Business Model
To develop a visual map of a business model you put the nine blocks together. Redesign the blocks and you create new forms of value. A mistake often made is to ignore the customer in the design. Increasingly with services taking centre stage, business modelling defines the customer experience.
In comparison to other methods, the visual mapping process is a useful team process. Besides exploring new opportunities, it creates a shared understanding between team members.
Why Use The Business Model Canvas?
The Business Model Canvas is popular with entrepreneurs and intrapreneurs for business model innovation. Fundamentally, it delivers three things:
- Focus: It focuses on what’s important the fundamental business logic – what I mean does it all fit together. It quickly clarifies and demonstrates whether the pieces fit together to make a business worth investment.
- Flexibility: Often I find that the original ideas get tweaked as the Business Model develops. This is particularly true when working in organizations and across different skill sets.
- Transparency: Team can refer to it easily. It is an ongoing tool that facilitates discussion, debate and also requires further research. Further research can be around financials, segments, and partners. Often, once the business model is created there needs to be some initial validation.
Strengths And Weaknesses Of The Business Model Canvas
- Focus on the problem-solution fit.
- Defines the main business components and their relationships.
- Develops clarity of thought for business logic.
- Tool for facilitating discussion, debate and further research.
- Easy to understand.
- The Business Model Canvas is NOT a strategy. You still need a strategy.
- Doesn’t take into account the competitive arena.
- Often when used is based on assumptions rather than facts.
- Doesn’t take into account sustainability – missing the broader view of economy, society and environment.
- Doesn’t show the different stakeholders involved in the business model.
- Lacks components that are available
- If you’re a startup then you might want to use the Lean Business Model Canvas instead.
Get more business design templates and analysis of business models by signing up to the email newsletter.
Business Model Canvas Sections
The following elements provide an overview of the main business drivers:
- Customer Segments: Who are the customers? What do they think? See? Feel? Do?
- Value Propositions: What’s compelling about the proposition? Why do customers buy, use?
- Channels: How are these propositions promoted, sold and delivered? Why? Is it working?
- Customer Relationships: How do you interact with the customer through their journey?
- Revenue Streams: How does the business earn revenue from the value propositions?
- Key Activities: What uniquely strategic things does the business do to deliver its proposition?
- Key Resources: What unique strategic assets must the business have to compete?
- Key Partnerships: What can the company not do so it can focus on its Key Activities?
- Cost Structure: What are the business major cost drivers? How are they linked to revenue?