2. BUSINESS MODEL CANVAS: ORIGIN
• A strategic management tool for creating new business models and
recording current ones is the business model canvas .By showing
possible trade-offs, it helps firms align their operations. It provides
a visual chart with pieces that describe a firm's or product's value
proposition, infrastructure, customers, and finances.
• Alexander Osterwalder first presented the nine "building blocks" of
the business model design template that became known as the
business model canvas in 2005, based on his PhD research on
business model ontology under Yves Pigneur's supervision
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3. 3
Business Model Canvas: A
Strategic Tool
The Business Model Canvas is a powerful tool for strategizing and
visualizing your business model. It helps you understand your core
elements and how they interact to create value for your customers.
4. 4
WHAT IS THE BUSINESS MODEL CANVAS?
Nine Building Blocks
The canvas is structured around nine key elements, each
representing a critical aspect of your business. These
building blocks work together to illustrate how your
company creates value for customers.
Visual Representation
The canvas provides a visual overview of your business
model, allowing you to see how different components
connect. This visual format encourages collaboration and
facilitates communication among stakeholders.
6. Customer Segments: Who
are we creating value for?
Target Audience
Identify the distinct groups of
people or organizations you aim
to serve. These groups have
specific needs, characteristics,
and behaviors that shape your
value proposition.
Market Segmentation
Divide your customers into
meaningful segments based on
demographics, psychographics,
buying behavior, or other relevant
criteria. This allows you to tailor
your offerings to specific groups.
Customer Persona
Create detailed representations of your ideal customers. This helps you
understand their motivations, pain points, and desired outcomes, guiding
your value proposition development.
7. Value Propositions: What
value do we deliver?
1 Unique Benefits
Define the specific value you offer
to your customers. This could
include features, benefits, or
solutions that address their needs
and pain points. Communicate
how your product or service
stands out from the competition.
2 Customer Problems
Solved
Identify the problems or
challenges your customers face
and how your value proposition
helps them overcome those
challenges. Focus on the value
you provide, not just the features
of your product.
3 Value Proposition Statement
Create a concise and compelling statement that summarizes the core value
you deliver to your customers. This statement should be clear, concise, and
memorable.
8. Channels: How do we reach our customers?
Direct Channels
These involve selling directly to
customers through your own website,
physical stores, or sales force. Direct
channels give you greater control over
the customer experience.
Indirect Channels
Partner with other businesses to reach
your customers, such as distributors,
retailers, or online marketplaces. Indirect
channels can expand your reach and
leverage existing networks.
Multichannel Approach
Consider a blend of direct and indirect
channels to reach your target audience
effectively. This allows you to cater to
diverse customer preferences and
maximize your reach.
9. Customer Relationships: How do we interact with our
customers?
Personalized Service
Provide tailored support and interactions to
meet the specific needs of your customers. This
fosters loyalty and builds strong relationships.
Automated Interactions
Utilize self-service options like FAQs, online
chatbots, or mobile apps to provide quick and
efficient assistance, especially for common
inquiries.
Community Engagement
Build a sense of community by fostering
interactions between your customers through
forums, social media groups, or events. This
encourages customer engagement and
provides valuable feedback.
10. Revenue Streams: How does
the business earn revenue?
1 Transaction-Based
Generate revenue from individual sales of products or services, such
as retail stores, e-commerce platforms, or service providers.
2 Subscription-Based
Offer recurring revenue through subscriptions, memberships, or
recurring services. This provides a stable and predictable income
stream.
3 Advertising-Based
Generate revenue by displaying ads on your platform or service to
users. This model typically relies on a large user base and engaging
content.
11. Key Resources: What
essential assets do we
need?
Physical Assets
These are tangible resources such as buildings, equipment, inventory, and
vehicles. Their availability is crucial for your business operations.
Intellectual Property
This includes patents, trademarks, copyrights, and other forms of
protection for your creations. It safeguards your competitive
advantage and innovation.
Human Capital
Your employees, their skills, expertise, and experience are vital
assets. Invest in attracting, developing, and retaining talent to drive
success.
12. Key Activities: What crucial things do we do?
1
Production
This encompasses all the processes involved in creating and delivering your products
or services, from sourcing materials to manufacturing and distribution.
2
Marketing and Sales
These activities are crucial for attracting customers and generating sales.
They involve brand building, promotion, pricing, and customer acquisition
strategies.
3
Customer Service
Providing excellent customer service is essential for building
lasting relationships and retaining customers. It involves
addressing inquiries, resolving issues, and providing support.
13. Key Partnerships: Who are our key
suppliers and partners?
1
Suppliers
Partners who provide essential components, raw
materials, or services for your business
operations. These partnerships ensure the
smooth flow of production and delivery.
2
Distributors
Partners who help you reach your customers by
distributing your products or services through
their networks. These relationships expand your
market reach and customer access.
3
Strategic Alliances
Partnerships that create mutually beneficial
outcomes by combining resources, expertise, or
market reach. These collaborations can drive
innovation and expand opportunities.
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ASSIGNMENT 1 DUE ON FEB 20, 2025 DURING CLASS
• Choose business entity (private, public, start up, SMEs, your own
business etc.) and develop its business model canvas.
