Introducing the Business Model Canvas
The BUSINESS MODEL CANVAS is a strategic tool that uses the language of view to create and develop innovative business models: it is the way in which a company CREATES, DELIVERS and CAPTURES VALUE. The BUSINESS MODEL CANVAS provides a visual overview of the nine building blocks of a business model, all laid out on the same page. Instead of just listing the components that you need to keep track of, a BUSINESS MODEL CANVAS is a tool that allows you to map out, develop and discuss your business model.
The BUSINESS MODEL CANVAS — as opposed to the traditional, intricate business plan — helps organisations conduct structured, tangible, and strategic conversations around new businesses or existing ones. Leading global companies like GE, P&G, and Nestlé use the canvas to manage strategy or create new growth engines, while start-ups use it in their search for the right business model.
The canvas’s main objective is to help companies move beyond product-centric thinking and towards business model thinking. The video below provides a basic introduction as to how you can describe your business model.Â
The first version of your BUSINESS MODEL CANVAS will be a starting point where you list the guesses about your business — assumptions that need to be proven through interaction with your customers. As customers respond to your product or service, the BUSINESS MODEL CANVAS becomes a scorecard. Instead of just posting the guesses about your business like you would in a business plan, a BUSINESS MODEL CANVAS allows you to revise the guesses as you gather facts about your product and customers. Customers will probably reject parts of your business model, and the business model can be changed to meet the needs of the customer. Each of these nine building blocks contains a series of hypotheses about your business model that you need to test.
The BUSINESS MODEL CANVAS will help you figure out how to make those changes, since you can keep track of alternatives to your current business model and how your business model needs to change. Â Every time a change is required, you can draw a new canvas that shows the changes. Â Over time, the BUSINESS MODEL CANVAS will become a “flip book” that shows how your business has evolved.
THE 9 BUILDING BLOCKS OF THE BUSINESS MODEL CANVAS ARE:
- Customer segments – who will be using and/or paying for your product or service
- Value propositions – the products and services that create value for your customers
- Channels – how you will reach customers and offer them your value proposition
- Customer relationships – the type of relationship you plan to establish with your customers
- Revenue streams – what people will pay for your product and how they will pay for it (transaction fee, subscription, etc.)
- Key resources – what you need in order to deliver on your business proposition
- Key activities – what you need to do to implement your business model
- Key partners – who will participate in the business and why
- Cost structure – the costs involved in delivering on your business model
Further Reading & resources
Here is some additional content that can be useful in helping you understand and develop a digital transformation strategy and roadmap for .