Business Model Canvas
Business Model Canvas was created by Alexander Osterwalder of Strategyzer as a tool to understand a model of a business in a formal or a structured way. It shows the unique selling & the value propositions, your target consumers and their insights and how the business makes money. It can also be used to compare one’s business model with that of its competitors.
How to use
The business model canvas acts as an authentic communication to describe, visualize and asses the dynamic business models. It provides a reason or a hypothesis on the running of a business i.e., how an organization is creating value & delivering value to the consumers.
1. Customer Segments
The market segments should be listed and the segment providing most revenue must be focussed on.
2. Value proposition
The unique selling proposition or the product or services provided by the business to the consumers must be mentioned.
3. Revenue streams
By delivering which products or services the revenue is generated for the business and also things done for free should also be added here.
How is the customer being communicated and how is value proposition delivered to the consumers?
5. Customer relationship management
How does the organisation maintain the relationship with the consumers? How is acquisition & retention of consumers done?
6. Key activities
Every day activities for the operations of a business.
7. Key resources
The key resources will include the no. of people, skills & knowledge, the money needed to run a business.
8. Key partners
Major factors or the partners which are necessary to run the business.
9. Cost structure
Major costs included for the running of business.
Step by step guide
A competitive analysis should be done and with some maps & business models of the competitors. It will provide a clear view of the market consumer’s needs & wants as an industry as whole and what are the consumers willing to pay. It will also give deep insights of how the competitors are successfully producing & delivering and fulfilling the market demands and how they stand out.
A clear benchmark
Connect the dot
A high-level process mapping should be done and the most important factors and the aspects should be mapped out from the business model.
After getting the clear view all the dots of the model should be connected. Look for any missing points after everything is on the right place.
The business should be in the current state and the future aspects should not be mixed along with it the different departments of an organization should also not be mixed rather every department should have their own mapped business model if it’s a large organization.
Do a detailed review of the model and check that all the customer segments which have been selected should be connected to the value proposition the organization is offering and they are connected to a revenue generation stream.
Also rank your own’s business model on the basis of costs, scalability, revenue generation streams, expenses, competitive position cost structure as it can give a better and clear view of your position in the market.
Visualize the business model which will impact the presentation of the business model while sharing it. Take a snapshot and the team members can use it to discuss the business model with others. A team should be created to actively look on the blind spots of the business model. And then you will be ready to test your assumptions.