Business Model Canvas

The Business Model Canvas is a strategic management tool, which allows us to develop and sketch out new or existing business models. It is a visual template pre-formatted with the nine blocks of a business model.

The Business Model Canvas was initially proposed by Alexander Osterwalder based on his earlier work on Business Model Ontology.

Formal descriptions of the business become the building blocks for its activities. Many different business conceptualizations exist; Osterwalder's work and thesis (2010, 2004) propose a single reference modelbased on the similarities of a wide range of business model conceptualizations. With his business model design template, an enterprise can easily describe their business model

• Infrastructure
  • Key Activities: The activities necessary to execute a company's business model.
  • Key Resources: The resources that are necessary to create value for the customer.
  • Partner Network: The business alliances which complement other aspects of the business model.
• Offering
  • Value Proposition: The products and services a business offers. Quoting Osterwalder (2004), a value proposition "is an overall view of .. products and services that together represent value for a specific customer segment. It describes the way a firm differentiates itself from its competitors and is the reason why customers buy from a certain firm and not from another."
• Customers
  • Customer Segments: The target audience for a business' products and services.
  • Channels: The means by which a company delivers products and services to customers. This includes the company's marketing and distribution strategy.
  • Customer Relationship: The links a company establishes between itself and its different customer segments. The process of managing customer relationships is referred to ascustomer relationship management.
• Finances
  • Cost Structure: The monetary consequences of the means employed in the business model. A company's DOC.
  • Revenue Streams: The way a company makes money through a variety of revenue flows. A company's income.