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Business Canvas Model
Customer Segments
Value Proposition
Customer Relationships
Channels
Revenue Streams
The Business Canvas Model is a simple one page model used to assess the viability (likelihood of success and areas needed to be successful) of a business. While this is one way to begin writing your business plan, there are other areas not included in this model that are needed to complete your written business plan.
For the purpose of our Marketing course, we will be focusing on five areas that directly relate to our customers and revenue generation:
Customer Segments
Value Proposition
Customer Relationships
Channels
Revenue Streams
We will address the other four areas briefly, but they will be covered more extensively in our Entrepreneurship course. These areas are focused on the costs of business, resources needed, and other infrastructure needed to be successful.
Watch this short video to see and hear a quick overlook of the Business Canvas Model. After watching, click on the links below to learn more about each block.
Familiarize yourself with the bottom four blocks, but this will not be used for the course
Key Resources
This building block describes your most important strategic assets that are required to make your business model work.
Broadly speaking resources can fall into one of four categories:
Physical: such as buildings, vehicles, machines, and distribution networks.
Intellectual: such as brands, specialist knowledge, patents and copyrights, partnerships, and customer databases.
Human: sometimes your people will be your most key resource, this is particularly true in creative and knowledge-intensive industries.
Financial: such as lines of credit, cash balances etc.
Key Activities
The Key Activities are the most important strategic things you must do to make the business model work. Key Activities should be directly relatable to your value proposition.
If your Key Activities are not relatable to your Value Proposition then something is wrong, because the activities you view as most important aren’t delivering any value to customers.
Key Activities can typically be broken down into three broad categories:
Production: refers to delivering your product. You will typically do this to either a high quality or a high quantity.
Problem Solving: Consultancies and other service organizations often have to come up with new solutions to individual customer problems.
Platform/Network: Networks, software platforms can function as a platform. For example, a key activity for Facebook is updating the platform.
When completing this section, it is a mistake to list all the activities of your business, instead only include activities which are absolutely core to delivering your value proposition.
Key Partners
In this building block, you list the tasks and activities that are important but which you will not do yourself. Instead, you will use suppliers and partners to make the business model work.
Let’s look at Spotify. Spotify’s key activity is updating its platform. However, as it doesn’t produce its own music one of the key partnerships of Spotify will be the deals it strikes with record labels and publishing houses, without which it would have no music!
There are usually three reasons for creating a partnership:
Economies of scale.
Reduction of risk and uncertainty.
Acquisition of resources or activities (e.g. music for Spotify).
Cost Structure
In the Cost Structure building block, we want to map key activities to costs. We also want to ensure that costs are aligned with our Value Proposition.
It should be straightforward to determine your most important costs and your most expensive after you’ve defined your Key Resources, Key Activities, and Key Partnerships.
https://expertprogrammanagement.com/2018/10/business-model-canvas-explained/
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