Business Model Canvas
Business Model Canvas (BMC) is a strategic management tool developed by Alex Osterwalder and adapted by recognized institutions.
Innovation is disruptive. But, not every business is prepared for disruption. Without a plan, pivoting is next to impossible. For an organization to innovate, it has to have a fine-tuned strategy that guides it towards a viable future business model.
Using a tool like the Business Model Canvas can serve to unite your company under a clear visualization of where your organization sits today and where it can be tomorrow (and how it will get there).
Business Model Canvas (BMC) is a strategic management tool developed by Alex Osterwalder and adapted by recognized institutions. It’s a tool that helps you build the bare essentials to a detailed version of your business plan. Angels and VC’s expect a BMC depicted in the pitch document. Most start-ups assume that their business plan is well thought of, but the fact is that most failures happen due to poor planning. A key reason for that is the plan is generally thought of in isolation eg: “Key Partners” are the most important aspect when it comes to delivery of “Value Proposition” but they are never taken into account while the latter is planned.
Taking time out to solve this management science tool for your business, would help you avoid a lot of jams in the future. Our Managing Partner is trained and certified by Stanford, who conducts this one on one consultancy sessions with the Founders.
Key Takeaway for Startups:
Common Language: The beauty of the BMC is that it creates a common reference and language that can be used to articulate, share and thereby gain feedback on each business model. It provides a straightforward yet transparent reference that can be used internally across teams, as well as externally with advisors, investors, and partners.
It helps structure discussions: Entrepreneurs should take Business Model Canvas sheets to meetings and use the building blocks to guide brainstorming. Grouping comments and ideas under the nine headings quickly give ideas shape.
It’s fast: Use the Canvas to write a one-page business model to see if the idea has legs, and take a lean entrepreneurship approach where you discover customers.
It intuitively makes sense! In its simplest form, the Canvas has front and backstages. The front stage shows what drives value and how you reach and make money from customers. The backstage shows what is required to make the front stage possible.
9 Pillars of Business Model Canvas
The Business Model Canvas categorizes the processes and internal activities of a business into 9 categories, each representing a building block in the creation of the product or service. These categories represent the four major aspects of a business; namely, customers, product or service, infrastructure, as well as financial viability. Click on each to find out more about them or book an appointment for a more detailed understanding.
Customer Segmenting is the practice of dividing a customer base into groups of individuals that are similar in specific ways, such as age, gender, interests, and spending habits
An organization must select the kind of relationship it will have with its customer segment to create financial success and sustainability.
Channels are defined as the avenues through which your customer comes into contact with your business and becomes part of your sales cycle.
Activities that are key to producing the company’s value proposition. An entrepreneur must start by listing the key activities relevant to his/her business. These activities are the most important processes that need to occur for the business model to be effective.
These are the assets, external or internal, which help you deliver value to your customers. Resources can be categorized as human, financial, physical, and intellectual. For an entrepreneur, it is important, to begin with, listing resources. This gives a clear idea of what the final product or service a company needs to create for the customer.
To create efficient, streamlined operations and reduce risks associated with any business model, an organization forms partnerships with its high-quality suppliers. Key partnerships are the network of suppliers and partners who complement each other in helping the company create its value proposition and the product or service itself.
To identify all costs associated with the business. A realistic understanding of the costs of the business is one of the hallmarks of a good business model.
Your revenue streams are how you will make money from your value proposition. What value is your customer paying for and how are you going to capitalize that value.