What is a Business Model Canvas?
What is a Business Model Canvas?
Business Model Canvas is one of the company’s strategic management tools, a tool for describing business models. It is a template diagram in the form of a table that describes all the business processes of the company: supply, infrastructure, consumers and finance.
To make a Business Model Canvas, the sheet is divided into nine parts. Each of them reflects one of the business processes:
- Consumer segments
- Value propositions
- Sales channels
- Customer relations
- Revenue streams
- Key resources
- Key activities
- Key partners
- Cost structure
This tool has two key rules
- The business model should be simple
- And at the same time able to holistically describe the entire system of interrelated business processes
For example, for the Netflix streaming service, the Canvas business model will look like this.
The target audience is movie lovers. Value proposition entertainment content at any time on demand. The service must be available on any device (this is in the “Sales Channels” item). The key partners of the service are producers and cable broadcasting companies, and the main costs are the production and licensing of content. Etc.
Now the Canvas method is one of the most popular examples of building business models. It is suitable both for finding new business models and for changing old ones. Business Model Canvas is used by startups and giants such as IBM, Ericsson, Deloitte.
History
The Business Model Canvas was described in 2010 by the Swiss business theorist Alexander Osterwalder and professor from the USA Yves Pinier in the book “Building Business Models“. Business Model Canvas translates as “canvas (template) of a business model“. It can be downloaded on Osterwalder’s website. Nuances
Many traditional business models contain similar or similar elements – the innovativeness of the tool is not in its elements, but rather in the approach to developing or changing the business model.
At the same time, you need to remember: Business Model Canvas is an important, but not the only approach to creating an algorithm that allows you to achieve success in business. To get a greater effect, this tool needs to be combined with others, warns Samsonova.
Would you want to see more Business Model? Then you should check our business category.
