Business Model Canvas

  WHAT

The Business Model Canvas helps organizations develop new or existing business models by helping define 9 essential elements of a product or the organization as a whole, in a structured way. The primary objective of the Business Model Canvas is to help companies move from product-centric thinking to business-model thinking (Osterwalder, 2013).

This model guides organizations through identifying and defining the following areas of your product or organization: 

1) Customer Segments
2) Value Proposition
3) Channels
4) Customer Relationships
5) Revenue Streams
6) Key Resources
7) Key Activities
8) Key Partners
9) Cost Structure

  WHO

The Business Model Canvas can be used by product managers, business development leaders, and new product development leaders.

  WHY

Business Model Canvas enables entrepreneurs and organizations to transform their ideas into innovative and competitive projects. It is used to reflect the value that they create for their customers and for themselves (50Minutes, 2017).

“For an organization to succeed, it has to have a fine-tuned strategy that guides it towards a viable future business model. Using a tool like the Business Model Canvas can serve to unite your company under a clear visualization of where your organization sits today and where it can be tomorrow.” (Hemmer, 2016)

  HOW

1) Customer Segments

NOODLE: Identify the customer segments for your business model.
COMBINE to consolidate similar and duplicate ideas.
VOTE for the customer segments that are most important for your organization.
MULTI-CRITERIA RATE each customer segment based on market attractiveness and priority. In the comments section, provide rationale for why each was rated the way it was.

Rating.jpg

PRIORITIZE the customer segments based on the source of the revenue.

2) Value Propositions

NOODLE/TAG: What value propositions do you deliver to your customers?

3) Channels

NOODLE/TAG: What are your channels and how do you reach them?
RATE the cost-effectiveness of each channel.

4) Customer Relationships

NOODLE/TAG: What type of customer relationships do your customer segments expect?

5) Revenue Streams

NOODLE/TAG: What are the revenue streams for your business model?
RATE the impact of each revenue stream on your business model.

6) Key Resources

NOODLE/TAG the key/strategic resources your value proposition requires.
RATE the impact of each key resource on your business model.

7) Key Activities

NOODLE/TAG the key/strategic activities your value proposition requires.
RATE the impact of each key activity on your business model.

8) Key Partners

NOODLE/TAG: Who are your key partners and which key resources are you acquiring from them?
RATE the impact of each key partner on your business model.

9) Cost Structure

NOODLE/TAG: What are the most important costs inherent in your business model?
RATE the impact of each inherent cost on your business model.

  RESULTS

  • Better understanding and organization’s alignment on customer segments, value proposition and revenue streams
  • List of prioritized customer segments based on market attractiveness and priority
  • List of rated key resources, key partners, key activities and cost structure based on impact

  BENEFITS & IMPACT

This exercise will enable:

Quality - Use a systematic approach to make informed, high-quality decisions in developing your business models.

Efficiency - Make the best use of your stakeholders’ time by having them participate when it's convenient for them 24/7.

Engagement - Enable an inclusive and creative process to build a new business model. Diverse perspectives from all stakeholders are valued in the decision making process.

Agility - Provides clarity, alignment, and common understanding in order to make investments decision the right business models.

  REFERENCES

Osterwalder, A. (2013). A better way to think about your business model. Harvard Business Review.
https://hbr.org/2013/05/a-better-way-to-think-about-yo

50Minutes. (2017). The Business Model Canvas: Let Your Business Thrive With This Simple Model. Plurilingua Publishing.

Hemmer, M. (2016). Why a Business Model Canvas is Important to Organizational Innovation. One Fire.
http://blog.onefire.com/why-a-business-model-canvas-is-important-to-organizational-innovation