Business Model Canvas (BMC)

Understanding the Business Model Canvas

The Business Model Canvas, developed by Alexander Osterwalder and Yves Pigneur, is a visual chart with elements describing a company’s product value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.

The Nine Building Blocks of the Business Model Canvas

The Business Model Canvas is made up of nine building blocks: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, and Cost Structure. Each block corresponds to a fundamental aspect of the business. Together, they provide a comprehensive view of the business’s strategy and operations.

Benefits of Using the Business Model Canvas

Using the Business Model Canvas can help businesses understand and innovate their business model. It provides a clear, concise view of the business, making it easier to identify potential improvements and innovations. It also facilitates collaboration and discussion, making it a valuable tool for teams.

1. A startup company uses the Business Model Canvas to map out their initial business model and adjust it as they learn more about their market.
2. An existing company uses the Business Model Canvas to explore new business opportunities or assess the impact of potential changes to their business model.
3. A consultant uses the Business Model Canvas to facilitate a workshop with a client, helping them understand and innovate their business model.

The Business Model Canvas was first introduced in the book ‘Business Model Generation’ by Alexander Osterwalder and Yves Pigneur in 2010. It was developed based on the idea that a business model can be broken down into nine basic building blocks that show how a business intends to make money.

• The Business Model Canvas is not a substitute for a full business plan. It is a tool for visualizing and discussing the business model, not a detailed plan of operations or strategy.
• The Business Model Canvas is not just for startups. It can be used by businesses of all sizes and stages to understand and innovate their business model.

• Compared to a traditional business plan, the Business Model Canvas is more visual and flexible, making it better suited for brainstorming and collaboration.
• Compared to the Lean Canvas, another popular business model tool, the Business Model Canvas is more comprehensive and better suited for complex businesses.

• Value Proposition
• Lean Startup
• Customer Development
• Blue Ocean Strategy
• SWOT Analysis