Business Model and Business Model Canvas

Introduction

• A business model can be broken into nine basic building blocks.
• These elements help describe how an organization intends to create, deliver, and capture value.
• Utilization of the Business Model Canvas aids in mapping, discussing, designing, and inventing new business models.

Nine Building Blocks of a Business Model

1. Customer Segments

• Defines all the people or organizations for which you are creating value.
• Includes both end-users and paying customers.

2. Value Proposition

• Represents the bundle of products and services that create value for each customer segment.

3. Channels

• Describes the means through which touchpoints you interact with customers and deliver value.

4. Customer Relationships

• Outlines the type of relationship you're establishing with your customers.

5. Revenue Streams

• Clarifies how and through which pricing mechanisms your business model captures value.

6. Key Resources

• Identifies assets that are indispensable in your business model.

7. Key Activities

• Highlights the activities you need to perform well in order to succeed.

8. Key Partners

• Recognizes who can help leverage your business model as you won’t own all key resources or perform all key activities by yourself.

9. Cost Structure

• Understanding the business model's infrastructure provides insight into its cost structure.

Business Model Canvas

• A visual tool used to map out an organization's business model in a single image.
• Useful for both startup entrepreneurs and senior executives.
• Facilitates better understanding and communication of how a business intends to operate and succeed.