Alexander Osterwalder of Strategyzer developed the Business Model Canvas as a tool to help people comprehend a business model in a formal or organised fashion. It displays the value propositions and unique selling points, your target market, their opinions, and how the company generates revenue. It may also be used to assess how well one's company strategy stacks up against that of its rivals.
How to use
A genuine means of describing, visualising, and evaluating dynamic business models is the business model canvas. It offers a justification or a hypothesis on how a business is being operated, i.e., how an organisation is producing value and providing value to customers.
1. Customer Segments
The market segments should be listed and the segment providing the most revenue must be focused 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
The activities that are done for free should also be noted here, along with how the firm generates cash by providing certain goods or services.
How is the customer being communicated and how is the value proposition delivered to the consumers?
5. Customer relationship management
How does the business keep its relationship with its customers? How are consumer acquisition and retention done?
6. Key activities
Everyday activities for the operations of a business.
7. Key resources
The key resources will include the no. of people, skills & knowledge, and 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 the running of the business.
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 a whole and what are the consumers willing to pay. It will also give deep insights into how the competitors are successfully producing & delivering and fulfilling the market demands and how they stand out.
2. A Clear Benchmark
A high-level process mapping should be done and the most important factors and aspects should be mapped out from the business model.
3. Connect the dot
After getting a clear view all the dots of the model should be connected. Look for any missing points after everything is in the right place.
4. Current state
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 its 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, and competitive position cost structure as it can give a better and clear view of your position in the market.
6. Going forward
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 at the blind spots of the business model. And then you will be ready to test your assumptions.