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• Business Model Canvas


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

  1. Customer Segments

  2. Value Propositions

  3. Channels

  4. Customer Relationships

  5. Revenue Streams

  6. Key Resources

  7. Key Activities

  8. Key Partnerships

  9. Cost Structure
• Customer Segments


  For whom are we creating value? Who are our most important customers?
• Mass Market


  One large group of customers with broadly similar needs and problems
• Niche Market


  One group of customers with specific needs and problems
• Segmented


  Multiple groups of customers with slightly different needs and problems
• Diversified


  Multiple unrelated groups of customer segments with very different needs and problems
• Multi-Sided Platform


  Multiple independent groups of customer segments that may have different needs and problems, but the business model requires both
• Value Propositions


  What value do we deliver to the customer? Which one of our customer's problems are we helping to solve? What bundles of products and services are offering to each customer segment? Which customer needs are we satisfying?
• Characteristics of Value Propositions

  • Newness
  • Performance
  • Customization
  • Getting the job done
  • Brand/Status
  • Price
  • Cost Reduction
  • Accessibility
  • Convenience/Usability
• Newness


  Fulfills an entirely new set of needs that customers previously didn't perceive because there was no similar value proposition
• Performance


  Improves product or service performance
• Customization


  Tailored to the specific needs of individual customers
• Getting the job done


  Helps customers get a certain job done
• Brand/Status


  Stands out because of the popularity or respect of a brand/status
• Price


  Offers a similar value but at a lower price
• Cost Reduction


  Helps customers reduce their own personal costs they would take on without the product/service
• Accessibility


  Provides to customers that previously lacked access to product/service
• Convenience/Usability


  Provides customers an easier way to use a vital product/service
• Channels


  Through which channels do our customer segments want to be reached? How are we reaching them now? How are our channels integrated? Which ones work best? Which ones are most cost-efficient?
• Communication Channels


  • Sales Force
  • Web Sales
  • Own Stores
  • Partner Stores
  • Wholesaler
• Channel Phases


  • Awareness
  • Evaluation
  • Purchase
  • Delivery
  • After sales
• Customer Relationships


  What type of relationship does each of our customer segments expect us to establish and maintain with them? Which ones have we established? How are they integrated with the rest of our business model? How costly are they?
• Examples of Customer Relationships


  • Personal Assistance
  • Dedicated Personal Assistance
  • Self-Service
  • Automated Services
  • Communities
  • Co-Creation
• Personal Assistance


  Customers can talk with human assistance
• Dedicated Personal Assistance


  Customer representatives are directly and solely connected to an individual customer
• Self-Service


  Customers are given resources to help themselves (e.g. FAQs)
• Automated Services


  Customers are given customized help usually through software and automation
• Communities


  Customers are able to connect with other customers for help (e.g. Forums)
• Co-Creation


  Customers are able to create value for the company (e.g. YouTube video uploads)
• Revenue Streams


  For what value are our customers really willing to pay? For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
• Types of Revenue Streams

  • Asset Sale
  • Usage Fee
  • Subscription Fees
  • Lending/Renting/Leasing
  • Licensing
  • Advertising
• Asset Sale


  One-time sale of ownership rights of a physical product
• Usage Fee


  Ongoing costs to continue use of product/service (e.g. Pay-Per-View)
• Subscription Fees


  Cost allowing customers to use product/service for specific time period
• Lending/Renting/Leasing

  Temporarily granting someone the exclusive right to use a product/service for a specific time period
• Licensing


  Granting customers permission to use protected intellectual property
• Advertising


  Income through fees for advertising a particular product/service/brand
• Key Resources


  What key resources do our value propositions requires? Our distribution channels? Customer relationships? Revenue streams?
• Types of Key Resources

  • Physical
  • Intellectual
  • Human
  • Financial