The Business Model Canvas by Alexander Osterwalder helps you to set up, describe and design your strategic managment. An ideal framework for planning your startup. So time to take out the pencils and start drawing a business model now.
The Basics
More structure, more transparency – less risk! Alexander Osterwalder proposed the “Business Model Canvas” in 2008. The model functions as a template for strategic business management. Pursuing this pattern helps to make key elements of a business transparent so that eventually the risk of startups failing is minimized. The visual chart is divided into nine sections, each of which depicts one important business aspect. The nine elements are: Value Proposition (I), Customer Segments (II), Customer Relationships (III), Channels (IV), Key Partners (V), Key Activities (VI), Key Resources (VII), Cost Structure (IX) and Revenue Streams (VIII). These nine sections are set into a specific pattern to help map, discuss, design and invent new business models.
Have a look at the poster of the Business Model Canvas in order to understand the particular segments.
I. Value Propositions
Which value are you offering your customers? Which customer problems are you solving?
This block describes the package of product and service which serves as utility for a specific customer segment.
II. Customer Segments
Who are your most important customers? For whom are we producing value?
This block describes the different groups of people or organizations that the company wants to reach and serve.
III. Customer Relationships
What kind of relationship do you have with the customer? What kind of relationship does your customer expect? How do you establish and maintain the relationship?
This block describes the type of relationship the company wants to have with one single customer segment.
IV. Channels
Through which channels do you want to connect and communicate with your customers? How do you reach your customers?
This block describes how a company communicates with and reaches their customer segments in order to deliver the value proposition.
V. Key Partners
Who are your key partners and suppliers? Which key resources do your key partners run and which do you utilize?
This block describes the network of suppliers and partners so that the business model works.
VI. Key Activities
Which key activities does your value proposition require? Your customer relations? Your revenue streams? Your channels?
This block describes the most important activities of the company which are essential for a successful business model.
VII. Key Resources
Which key resources does your value proposition require? Your customer relations? Your revenue streams? Your channels?
The most important components of the business assets are listed here in order for the business model to function.
VIII. Revenue Streams
For which value are your customers willing to pay? For which products are they paying momentarily? How would they like to pay? How does each revenue stream contribute to the total sum?
This section describes the profits the company generates with the customers.
IX. Cost Structure
What are the highest costs in your business model? Which key resources / key activities are the most expensive?
This element contains all relevant costs in order to operate the business model.
For more information please check out Strategyzer.com! They also provide a short summary on video.
If you want to steep in deeper you can read the first 72 pages of the Business Model Canvas handbook by Alexander Osterwalder and Yves Pigneur for free.
© photo by Isabell Wutz
© graphic by Strategizer.com