Business Model Canvas
Business Model Canvas (BMC)
The Business Model Canvas is a strategic management template used for developing new business models and documenting existing ones. Remember this is a living document and will change and grow as your business does.
The BMC is divided into nine sections:
1. Customer Segments
- For whom are we creating value?
- Who are our most important customers?
- Considerations:
- Mass market
- Niche market
- Segmented
- Diversified
- Multi-sided platform
2. Value Propositions
- What value do we deliver to the customer?
- Which customer problems are we solving? What needs are we satisfying for them?
- What products and services are we offering to each customer segment?
- Characteristics:
- Newness
- Performance
- Customization
- "Getting the job done"
- Design
- Brand/Status
- Price
- Cost Reduction
- Risk Reduction
- Accessibility
- Convenience/Usability
3. Channels
- Through what channels do our customer segments want to be reached?
- How are we currently reaching them?
- Which ones work best? Which are most cost-efficient?
- How are we integrating them with customer routines?
- Channel Phases:
- How do we raise awareness about our company's products and services?
- How do we help customers evaluate our organization's value proposition?
- How do we allow customers to purchase specific products and services?
- How do we deliver a value proposition to customers?
- How do we provide post-purchase customer support?
4. Customer Relationships
- What type of relationship does each of our customer segments expect us to establish and maintain with them?
- Which ones have we established?
- How are they integrated with the rest of our business model?
- How costly are they?
- Examples:
- Personal assistance
- Dedicated personal assistance
- Self-service
- Automated services
- Communities
- Co-creation
5. Revenue Streams
- For what calue are our customers really willing to pay?
- For what do they currently pay?
- How are they currently paying?
- How much would they prefer to pay?
- How much does each revenue stream contribute to overall revenues?
- Types:
- Asset sale, usage, subscription fees, lending/renting/leasing, licensing, brokerage feed, advertising
- Fixed Pricing
- List price, product feature dependent, customer segment dependent, volume dependent
- Dynamic Pricing
- Negotiation, yield management, real-time-market
6. Key Resources
- What key resources do our value propositions require? Our distribution channels? Customer relationships? Revenue streams?
- Types of Resources:
- Physical
- Intellectual (brand/patents, copyrights, data)
- Human
- Financial
7. Key Activities
- What key activities do our value propositions require? Our distribution channels? Customer relationships? Revenue streams?
- Categories:
- Production
- Problem solving
- Platform/network
8. Key Partners
- Who are our key partners? Who are suppliers?
- Which key resources are we acquiring from partners?
- Which key activities do partners perform?
- Motivations for partnerships:
- Optimization and economy
- Reduction of risk and uncertainty
- Acquisition of particular resources and activities
9. Cost Structure
- What are the most important costs inherent in our business model?
- Which key resources are most expensive?
- Which key activities are most expensive?
- Is your business more:
- Cost driven (leanest cost structure, low price value proposition, maximum automation, extensive outsources)
- Value driven (focused on value creation, premium value proposition)
- Sample characteristics:
- Fixed costs (salaries, rent, utilities), economies of scale, variable costs, economies of scope