Business Model and Business Model Canvas

Overview

An organization's business model can be understood through nine fundamental building blocks. These blocks cover various aspects of how the business operates and delivers value to its customers.

Nine Building Blocks

1. Customer Segments

   • Comprises all people or organizations for whom value is created.
   • Includes both simple users and paying customers.

2. Value Proposition

   • Specific value offered to each customer segment.
   • Bundles of products and services that deliver value.

3. Channels

   • The touchpoints through which the company interacts with customers.
   • Means of delivering value to customers.

4. Customer Relationships

   • Type of relationship established with each customer segment.

5. Revenue Streams

   • How the business generates income.
   • Pricing mechanisms through which value is captured.

6. Key Resources

   • Essential assets required for the business model.

7. Key Activities

   • Crucial tasks and operations necessary for performing well.

8. Key Partners

   • External entities that assist in leveraging the business model.
   • Account for resources and activities not owned or performed by the business.

9. Cost Structure

   • Understanding the costs involved based on the business infrastructure.

Business Model Canvas

• A tool to map, discuss, design, and invent new business models.
• Allows visualization of the entire business model in one image.
• Useful for both startup entrepreneurs and senior executives.

Purpose

• Helps in organizing and detailing the components of a business model.
• Provides a comprehensive view of how a business intends to create, deliver, and capture value.

By utilizing the business model canvas, businesses can gain clarity and focus on how they operate and plan for future growth or changes.