Fast Track-Business Model Canvas

Recommending
a Strategy
The Business
Model Canvas
Learning Objectives
• Learn about the origin of the Business Model Canvas.
• Be introduced to the purpose of the Business Model Canvas.
• Understand the difference between a business plan and the Business
Model Canvas.
• Gain an understanding of how the Business Model Canvas works.
• Learn about the Business Model Canvas components.
• Learn about the customer discovery process.
• Create a Business Model Canvas.
Definition
The Business Model Canvas is a one-page diagram consisting
of nine building blocks. This format is a visual and easy to
understand tool for modeling your business.
• Uses common language to share business ideas
• Places the customer at the center of business modeling
• The BMC can be used for start-ups and existing businesses
9 Blocks
1. Value proposition
2. Customer segments
3. Channels of Distribution
4. Customer relationships
5. Revenue streams
6. Key resources
7. Key activities
8. Key partners
9. Cost structure
1. Value Proposition
• Begin with this first step.
• Define what value or benefit you bring to the consumer with your
product or service.
• Are you solving a problem or creating a better solution?
• Are you solving a problem nobody cares about?
• What will your value proposition focus on?
Pricing, Design, Convenience, risk reduction, cost reduction,
Customization or helping to get a job done.
A Value Proposition
creates value for a
Customer Segment
through a distinct mix
of elements catering to
that segment's needs.
—Alexander Osterwalder, Arms and Apples
2. Customer Segmentation
The Heart of Your Business Model
• Define and profile your customer.

Who is the customer?
Where are they located?
What needs and behaviors do they have?
• How many customer/market segments will you serve?
Mass Markets
Niche Markets
Segmented- (May have common needs but are slightly different)
Diversified- Serving different types of customers
Multi-sided markets- (Credit Card Companies/ Consumer & business)
• How will you reach these customers?
Is there a path to the consumer?
3. Channels of Distribution
• Through which Channels do your Customer Segments want to be
reached?
• How would you reach them now?
• How are your Channels integrated? Which ones work best?
• Which ones are most cost-efficient?
• How could these channels function?
Your communication, distribution, and sales Channels comprise your company's
interface with customers. Your Channels are customer “touch-points” that play an
important role in the customer experience.
4. Customer Relationships Types
• Transactional
• Long Term
• Self Service
• Automated
• Human Interaction/Personal
Relationships
• Online Communities
• Community Interaction
5. Revenue Streams-How will sales flow
Asset Sales-Physical Products

Usage Fees-Cell Minutes
Subscription Fees-Magazine
Lending-Car Rental, Money
Renting-Apartments
License Fees-Rights of
Use/Franchise
Advertising- Media Sales
6. Key Resources
Financial Resources
Physical Resources
Worker/Human Resources
Intellectual Resources
7. Key Activities
Production
Problem Solving
Maintaining IT
Using the lemonade stand example, your key activities

would be producing the lemonade, selling the lemonade,
and marketing your lemonade stand.
8. Key Partners
Key partnerships are the suppliers and
partners you rely on to make your business
model work. These are the organizations
and individuals helping you succeed.
Reasons to have partnerships:
• Enhance business models
• Mitigate risk
• Obtain resources
9. Cost Structure
Cost Structure is for all of the costs associated with making your
business model work. Use this block to identify which costs are
most important to your business model, and to determine which
of your key resources and activities are most expensive.
For Example, Southwest Airlines is a cost-driven structure. They deliver low cost airfare
to consumers through no-frills delivery.
Business Model Canvas Next Steps
There are three mistakes companies often
make when using the BMC:
• Focusing too much on individual blocks.

• Failing to go beyond product innovation.
• Not testing the idea before moving
forward.

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Recommending

• Define and profile your customer.

Asset Sales-Physical Products

Using the lemonade stand example, your key activities

• Focusing too much on individual blocks.

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