Business Model Canvas PDF

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Business Modelling: Business Model Canvas Before making some actions, we have to create a business model in order to develop a project management to organize those new actions. The business model is the way of doing of a company. The business model can be described from some existing companies and can be design for new companies or existing companies that want to enter in different market.

This BUSINESS MODEL CANVAS is able to solve all the problems in the creation of a business model. This is not a business plan, it doesn’t include any forecasting, any real market study and any operational description. It is in the middle between a business plan and the simple action in terms of complexity. It helps in maintaining a coherence in the creation of the business model. The external coherence is the coherence in the proposal of the products (distribution, customers, promotion, price and products), the internal coherence is the coherence between my production system (or outsourcing) and the offer that I want to create. The central point is the value proposition, this has to be followed also in the external coherence and the internal want. Another level of coherence is the economic one, so the business model has to be consistent in all the elements that are representing the offer (also in the internal and external point of view). If the model seems to be coherent in whole, this business model can be considered by the company developing a business plan and, after, developing a project management. There are 9 different blocks in the business model canvas:

We can divide them considering the three levels of coherence: • • •

Internal → Customer segments, value proposition, distribution channels and customer relationships External → Value proposition, key resources, key activities and partner network Economical → Revenue streams and Cost structure.

Let’s analyse them: 1. CUSTOMER SEGMENTS Customers are the heat of any business model. Successful companies know how to turn satisfied customers into revenue streams. A clear description and understanding of a company’s customer is an integral part of every business model. There are some key questions: • Who do we create value for? • Do any of these customers merit to be grouped into a distinct category, because: o we propose them a distinct offer? o we reach them through different communication and distribution channel? o we entertain different relationship with them? o they have a substantially different profitability? 2. VALUE PROPOSITION The reason why customers turn to one company over another. It solves a customer problem or satisfies a customer need. Each value proposition consists of a selected bundle of products and/or services. Some value propositions may be innovative and represent a new or disruptive offer. Others may be similar to existing market offers, but with added features and attributes. There are some key questions: • What do we offer the market? • What is the specific bundle of products and services you offer each of our customer segments? • Which customer need does each value proposition cover? • Do we offer different service levels to different customer segments?

3. CHANNELS A company reaches its customers through various communication and distribution channels. They represent the interface between a company, its value propositions and its customers. Communication and distribution channels have become increasingly important in business model design. For example, cost intensive channels should be used for very profitable clients, while unprofitable clients should be served though cost-efficient channels. There are some key questions: • Through which communication and distribution channels do we reach our markets? • How well does each channel work? • How expensive or cost efficient is each of our channels? • Through which communication and distribution channels do we promote and deliver each value proposition? • Through which channels do we reach each customer segment? 4. CUSTOMER RELATIONSHIPS Getting relationship management right in our business model is crucial today to satisfy customer’s expectation. For instance, customers paying a high price for a product or service will expect a high touch relationship, while customers paying a cheap price do not expect more than automated yet customize relationships. A sound business model has a clear strategy for customer relationship management for each customer segment. There are some key questions: • Do we develop and maintain types of client relationships in our business model? • How resource intensive is each of these client relationship types in term of time consumption and other costs? • For each client segment, which client relationship types and mechanism do we develop and maintain? 5. REVENUE STREAMS If customers comprise the heart of business model, revenue streams are its arteries. Revenue streams come from one or several segments of clients who are willing to pay for the value they get from our offer. These revenue streams come in the form of selling, lending, licensing, commissions, transaction fees or advertising fees. There are some key questions: • What are our revenue streams? • What are the revenue streams from each customer segment and value proposition? • How much is each revenue stream’s contribution to overall revenues in terms of percentages? 6. KEY RESOURCES At the basis of every business model there is a set of key resources a company must dispose of to make its business model work. These key resources include classical ones such as human resources and tangible assets. Increasingly, business models are also built on intangible assets that are difficult to quantify, such as brand equity and expertise of a specific domain. There are some key questions: • What are the key resources we rely on to run our business model? • How does each of these resources relate to our value propositions and their corresponding customer segments, channels and relationships? 7. KEY ACTIVITIES Are the actions that came out from the key resources. To implement a business model a company, need to perform a number of key activities. It may perform these activities itself or get them done through a network of partners. There are some key questions: • What are the main activities we operate to run our business model? • On which key resources do they rely? • To which value propositions, channels or relationships do they contribute?

8. PARTNER NETWORK Today’s Business Models are more and more the result of a network of partnerships, joint ventures, cooperation and alliances between different companies. Every company must ask itself if and how it can leverage its own business model by partnering with other companies. This includes the question of what company wants to do by itself and what is wants to do with partners. It also includes the question of levering one’s own value proposition by combining it with the value proposition of strategic partners. There are some key questions: • Which partners and suppliers do we work with? • Which key resources do they relate to? • To which value propositions, channels or relationships do they contribute? 9. COST STRUCTURE The cost structure is a direct result of all the other building block of the business model. Ideally costs should be traceable back to each business model block. There are some key questions: • What are the most important cost positions in our business model? • Can the cost positions be easily connected to a business model building block? • Can costs be calculated for each customer segment?...