Business Model Canvas

• Business Model Canvas (BMC)

  • A strategic management and simple start up template for new business idea
  • A visual chart that portrays all the important elements of the business
  • Assists company/firm in aligning their business activities
• Alexander Osterwalder (2008)

  Developed the Business Model Canvas
• Key elements of a BMC

  • Key activities
  • Key resources
  • Key partners
  • Value propositions
  • Customer segments
  • Distribution channels
  • Customer relationships
  • Cost structure
  • Revenue stream
• BMC Filling Steps and Segments

  1. Desirability (Market Segments, Channels, Customer Relationships)

  2. Feasibility (Key Activities, Key Resources, Key Partners)

  3. Viability (Revenue Structure, Cost Structure)

  4. Value Proposition connects Desirability and Feasibility
• Customer segment

  • Who are your customers?
  • Which group are you targeting?
  • Who is your most important audience?
  • What do they feel about the values that you are offering?
• Types of customer segment

  • Mass market
  • Niche market
  • Segmented
  • Diversified
  • Multisided platform/market
• Value propositions


  • What core values that the business has to offer to the customers?
  • Which needs are you satisfying?
  • What makes the customers attracted to your products?
  • What distinguishes you from your competitors?
• Distribution channels


  • How do you reach your customer?
  • Which channel works best? How much is the cost?
  • How can the channel be integrated into your and your customers routines?
• Customer Relationships


  Identify the type of relationship that your customer expect you to establish
• Forms of customer relationships

  • Personal assistance
  • Dedicated personal assistance
  • Self service
  • Automated service
  • Communities
  • Co-creation
• Revenue Streams


  • How do the business earn profit/revenue from the value proposition?
  • What value that customers are willing to pay?
  • What is the revenue model?
• Ways to generate revenue stream

  • Asset sale
  • Usage/service fee
  • Subscription fee
  • Lending/leasing/renting
  • Licensing
  • Brokerage fees
  • Advertising
• Key Activities


  • What does the business do to deliver its proposition?
  • What activities are most important for your distribution channels, customer relationships, revenue stream etc.?
• Key Resources


  • What key resources does the value propositions require?
  • Key Resources are necessary to sustain & support business
• Key Partnership


  • Who are your key partners/suppliers?
  • Who are your partner network?
• Types of Key Partnerships

  • Buyer-supplier relationship
  • Joint ventures
  • Strategic alliances between competitors and non-competitors
• Cost Structure


  • What are the important monetary requirements in operating the business?
  • What are the business's major cost drivers?
  • How are the cost linked to revenue?
• Business structure based on Cost Structure

  • Cost-driven (focus on minimizing cost & no frills)
  • Value driven (focus on creating values in product & services & less concern with cost)
• Characteristics of cost structures


  • Fixed cost
  • Variable cost
  • Economies of scale
  • Economies of scope
• McDonald's Business Model Canvas

  • Value proposition: food of a constant quality that is served quickly and consistently across the globe
  • Customer segments: families, youngsters, the elderly and business people
  • Strategic partners: franchise holders and suppliers
  • Key activities: marketing and selling food and beverages
  • Key resources: employees and restaurants
  • Customer relationship: online on the device preferred by the customer
  • Distribution: through the restaurants
  • Cost structure: employee salaries, facility construction costs, raw materials procurement and marketing costs
  • Revenues: generated at the restaurants owned by the company itself and those owned by its franchise holders
• Dunzo Business Model Canvas


  Dunzo is an online platform which provides delivery services (Fruits-Veggies, groceries, medicines, fish, chicken-mutton, paan-cigarette, pet supplies etc.)
• Animal Health Using IoT Business Model Canvas

  • Key Partners: Animal hospital/doctors, Department store for dog foods, Furniture store for dog houses, Media for advertisement, Breeding Facility, Training for dog trainers
  • Key Activities: Research on dogs behaviour, Dog trainer, Animal doctors, Human resources
  • Value Propositions: Providing variety of dogs as per customer wants, Providing genuine breed dogs, Providing required training for the dogs, Vaccination facility, Providing home delivery of goods i.e. dog foods, Providing loyalty card for customers
  • Customer Relationships: Advertisement, Delivery service, Online store
  • Customer Segments: Residential Urban people, Unique dogs for higher class people
  • Key Resources: Providing food for stock dogs, Sales of dog house, Sales of dog, Treatment of dogs
  • Channels: Bingo Dog Shop
  • Cost Structure: Advertisement cost, Distribution cost
  • Revenue Streams: Sales of dog food, To targeted customers who wants Dogs for decorative purpose, To targeted customers who wants Dogs for security purpose
• Advantages of BMC: More focus, Flexibility, Transparency
• Business Model Canvas


  A business model describes the rationale of how an organization creates, delivers and captures value
• Business idea ≠ Business model
• Business Model Canvas


  • 9 building blocks
• Value Proposition


  The reason why customers turn to one company over another
• Customer Segments


  An organization serves one or several customer segments
• Channels


  Value propositions are delivered to customers through communications, distribution and sales channels
• Customer Relationships


  Customer relationships are established and maintained with each customer segment
• Revenue Streams


  Revenue streams result from value propositions successfully offered to customers
• Key Resources


  Assets required to offer and deliver the previously described elements
• Key Activities


  Activities performed to deliver the value proposition
• Key Partners


  Some activities are outsourced and some resources are acquired outside the enterprise
• Cost Structure


  The business model elements result in the cost structure
• One of the following is not one of the 9 building blocks: Customer segments, Value propositions, Mission statements, Channels, Customer relationships, Revenue streams, Key resources, Key activities, Key partnership, Cost structure
• According to the presentation, the best place to start is

  Customer segment
• Business idea to business model


  1. Selecting the new idea

  2. Identify your challenge

  3. Write the challenge statement

  4. Identify your idea/prototype
• Example from Apple


  • Identify your challenge: We are passionate about providing seamless music experience
  • Write the challenge statement: "How can we provide songs that can be enjoyed easily?"
  • Identify your idea/prototype: ipods
• Customer Segments


  Different groups of people or organizations an enterprise aims to reach and serve