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The business model canvas
In this video Wiebke will go through the different building blocks in the business model canvas and how you can use it.
Hey, in this video, I will introduce the business model canvas to you. The business model canvas is a great tool to analyze and visualize your existing business model and see how things go together. But it’s even better tools to test and try to develop a new business model that you want to work with in the future. And the business model canvas divides the business model in nine building blocks, and they are quite intuitive, this building blocks and they are great help to really make sure that you look at all the different aspects of your business model. But in the end, it’s of course really important that all this different building blocks go together.
If we look at the first building block, then we look in the middle and that is the value proposition, and here in this block, value proposition, you actually need to write up and show all the different products and services that you offer. And you really need to focus on the unique things and the special things that really make a difference for customers. And that will make that they actually will buy your product. And this can be like high quality of a product. It can, of course, be a great service or it can also be just a great experience. And after mapping out all the different products and services, you can start to look at your customer segments.
And in this customer segment, you really should try to look at the different customer segments you are addressing. And you need to be really precise on which are the real differences between these customers and what type of customers really will be attracted by your offer. And this can, of course, be that they have for a certain need that they want to address or that they are looking for a specific experience or that they differ in their competencies and what they are looking for. And he is also really important to make like lists of like different type of customers that you not only have, like one sort of customer or treat everyone in the same way.
And after doing that, you should look at the channels and the channels. They will look at how your product or service actually comes to the customer. And here it can happen that you, of course, have like physical stores where the customer comes and buys your product. You can have, of course, provide food in a restaurant, or of course, you can do it on distance via like an online platform, but really make sure that, OK, how are the channels?
And that, of course, will also affect the customer relationship that you will have, because if you meet the customer in person, you will have a different customer relationship compared if you just have a online service provider that don’t have any clear relationship. And the customer relationship also looks at how you actually over time interact with the customer. What do you do before the customer actually is buying something doing the selling process, but also afterwards there can be some reward programs or different things in this customer relationship that you really have this relationship over time in certain cases.
But when we have looked at this side where we have like the the front end and the customer part of it, we also need to look at the back end and decide where we look at what the company actually is doing. And here we can look first at the key resources that the company has. And that can be really different from company to company. Of course, it could be a certain factory or it could be a patent that they built their business around, or it could be a brand or just like the great nature around the cozy houses that you have.
But of course, one key resources in quite many businesses is, of course, also the people working there, the employees. And if, for example, the employees are your key resources, you also should be really focusing on them and keeping them and try to make them happy inside your companies. And the next thing you look at is the key activities that you are doing inside the companies. What are the main things that actually your company is doing? Are they building a product, other developing new things? Are they working a lot with R&D? Is it about like preparing food or just like do nice activities with their customers?
And it’s really important to focus on the most important things and really also identify those and develop those for this. But one important thing especially, or more and more important thing is also your key partners. Basically, no company nowadays is doing business totally alone. All companies mainly are depending on key partners, and it’s really important to identify those key partners, but also really to try to develop the most important partners and maybe develop closer relationships and add new partners where you see that this could benefit your business.
And after looking after that, you will also have insights in what the cost structure of your company is, because depending on your key resources, your activities and your partnerships, this will define the costs you have inside your business. And of course, it’s very good to reduce this cost as much as possible, but still be able to keep your key resources and activities well working. So here you can, of course, have costs for the building at the production or the inputs to your product. But you, of course, also have the costs for the employees and maybe other maintenance costs, what it can be. And the final building block that we were looking at is the revenue streams.
And he, of course, you need to identify in which way you want to earn the money for your product. And that can be in quite different ways. It’s not only about the money that you get for selling a product or delivering a service, it can be different revenue streams, for example, about licensing or leasing contracts, or it could be renting or of course, that you offer like services over time or have outcome based business models or like revenue models. And after looking at all this building blocks, I think it’s really, really important that they need to go together. And when you work with this business model canvas, you really need to see that all this building blocks go together.
And if you change something somewhere that also needs to happen to change and other places, it’s really important to see the holistic perspective. And after doing that, you also really need to think to innovate the different building blocks and think outside the box to really make a difference in your business model and try to be unique and really work with business model innovation as well. And after doing that and really think through and test your business models, you will have a great idea about how your business model will work in the future and have a great opportunity to test it before really rolling it out.
In this video, Wiebke will go through the business model canvas. You will learn what the nine different building blocks contain and how you can work with them.
Discussion
Before moving on, how can the business model canvas be helpful for you? Give examples and put your thoughts in the comments section below.
Keywords:
Business model canvas: It’s a canvas that describes the rationale of how an organization creates, delivers and captures value.
Value proposition: All the products and services you offer
Customer segment: Who are your customers
Channels: The avenues through which your customer comes into contact with your business and becomes part of your sales cycle
Customer relationship: How a business interacts with its customers
Key resources: What practical resources are needed to achieve the key activities (actions) of the business?
Key activities: The Key Activities of your business/product are the actions that your business undertakes to achieve the value proposition for your customer
Key partners: Key Partners are a list of other external companies/suppliers/parties you may need to achieve your key activities and deliver value to the customer
Cost structures: Your business cost structure is defined as the monetary cost of operating as a business.
Revenue streams: The way by which your business converts your Value Proposition or solution to the customer’s problem into financial gain
This article is from the online course:
Demystifying Business Models for New Entrepreneurs
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Demystifying Business Models for New Entrepreneurs
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