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Business Model Canvas

From:

Business Model Generation Preview

http://businessmodelgeneration.com/canvas/bmc?_ga=1.42742181.1455922759.1436139831

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Definition Business Model

A business model describes the rationale of how an organization creates, delivers, and captures value

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Nine Building Blocks

1. Customer SegmentsAn organization serves one or several Customer Segments.

3. ChannelsValue propositions are delivered to customers

Through communication,

distribution, and sales

Channels.

2. Value Propositions

It seeks to solve customer problems and satisfy customer needs with value

propositions.

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Nine Building Blocks (cont.)

4. Customer RelationshipsCustomer relationships

are established and

maintained with each

Customer Segment.

6. Key ResourcesKey resources are the

assets required to offer

and deliver the previously

described elements…

5. Revenue Streams

Revenue streams result

from value propositions

Successfully offered to

customers.

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Nine Building Blocks (cont.)

7. Key Activities…by performing a number

of Key Activities.

9. Cost StructureThe business model

elements result in the

cost structure.

8. Key PartnershipsSome activities are

outsourced and some

resources are acquired

outside the enterprise.

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1. Customer Segments

The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve.

Customer groups represent separate segments if:

• Their needs require and justify a distinct offer

• They are reached through different Distribution Channels

• They require dfferent types of relationships

• They have substantially dfferent profitabilities

• They are willing to pay for dfferent aspects of the offer

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2. Value PropositionThe Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment.

• Newness• Performance• Customization• “Getting the Job Done”• Design• Brand/Status• Price• Cost Reduction• Risk Reduction• Accessibility• Convenience/Usability

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3. Channels The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.

Channels serve several functions, including:

• Raising awareness among customers about a company’s products and services

• Helping customers evaluate a company’s Value Proposition

• Allowing customers to purchase specific products and services

• Delivering a Value Proposition to customers

• Providing post-purchase customer support

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4. Customer Relationships The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments

• What type of relationship does each of our Customer Segments expect us to establish and maintain with them?

• Which ones have we established? How costly are they?• How are they integrated with the rest of our business

model?

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5. Revenue StreamsThe Revenue Streams Building Block represents

the cash a company generates from each customer Segment (costs must be subtracted from revenues to create earnings).

A business model can involve two different types of Revenue Streams:

• Transaction revenues resulting from one-time customer payments

• Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support

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5. Revenue Streams (cont.)Driving Revenue Stream Questions:• For what value are our customers really willing to pay?• For what do they currently pay? • How are they currently paying?• How would they prefer to pay? • How much does each Revenue Stream contribute to

overall revenues?

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6. Key ResourcesThe Key Resources Building Block describes

the most important assets required to make a

business model work. Key resources can be physical, intellectual, human, and financial

Identification of Key Resources involves assessing:• What Key Resources do our Value Propositions require?• Our Distribution Channels?• Customer Relationships?• Revenue Streams?

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7. Key ActivitiesThe Key Activities Building Block describes the most important things a company must do to make its business model work.

Identification of Key Activities involves assessing:• What Key Activities do our Value Propositions require?• Our Distribution Channels? • Customer Relationships?• Revenue streams?

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8. Key PartnershipsThe Key Partnerships Building Block describes the network of suppliers and partners that make the business model work.

Assessing Key Partnerships involves identifying:• Who are our Key Partners? • Who are our key suppliers?• Which Key Resources are we acquiring from partners?• Which Key Activities do partners perform?

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9. Cost StructureThe Cost Structure describes all costs incurred to operate a business model.

Describes the most important costs incurred while operating under a particular business model.

Creating and delivering value, maintaining Customer Relationships, and generating revenue all incur costs.

Driving Questions:• What are the most important costs inherent in our business• model? • Which Key Resources are most expensive? • Which Key Activities are most expensive?

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Business Model CanvasKey Partners

Key Activities

Value Propositions

CustomerRelationships

CustomerSegments

Key Resources

Channels

Cost Structure Revenue Streams

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Business Model Canvas Complete