A 2 minute overview of the Business Model Canvas, a tool for visionaries, game changers, and challengers. This method from the bestselling management book Business Model Generation is applied in leading organizations and start-ups worldwide.

1. Business model canvas
A strategic management and lean startup template for developing new or documenting
existing business models is Business Model Canvas . It is an intuitive chart that contains
elements that describe the value proposition, infrastructure, customers, and financial
status of the company or product. It helps companies adjust their business by explaining
potential trade-offs.
Description
The formal description of the business becomes the basis of its activities. There are many
different business concepts. The following description is mainly based on the book
"Business Model Generation" in 2010.
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➢ Infrastructure
➢ Key activities: the most important activities in the implementation of the
company's value proposition An example of pen manufacturer Bic is the
establishment of an effective supply chain to reduce costs.
➢ Key resources: Resources necessary to create value for customers.
They are seen as company assets needed to maintain and support the
business. These resources can be human, financial, material and
intellectual.
Partner network: In order to optimize operations and reduce the risks
of business models, organizations usually establish buyer and seller
relationships so that they can focus on their core activities.
Complementary business alliances can also be considered through
joint ventures or strategic alliances between competitors or non-
competitors.
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2. ➢ Offering
➢ Value proposition: a collection of products and services provided by the
company that meet customer needs. According to Osterwalder (2004),
the value proposition of a company is the difference between it and its
competitors. The value proposition provides value through various
elements such as novelty, performance, customization, "getting the job
done", design, brand/status, price, cost reduction, risk reduction,
accessibility and convenience/availability.
➢ The value proposition may be:
➢ Quantitative-price and efficiency
➢ Qualitative-overall customer experience and results
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3. ➢ Customer
➢ Customer base: In order to build an effective business model, a
company must identify the customers it is trying to serve. Various
customers can be segmented according to their different needs and
attributes to ensure that the company's strategy is appropriately
implemented to meet the characteristics of the selected customer group.
The different types of customer groups include:
➢ Mass market: Because the organization shows a wide range of potential
customers, there is no specific segmentation of companies that follow
mass market elements. E.g. car
➢ Niche market: customer segmentation based on professional needs and
customer characteristics. E.g. Rolex
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4. ➢ Segmentation: The company applies other segments to its existing
customer base. In the case of segmentation, companies can further
differentiate customers based on gender, age and/or income.
➢ Diversification: The company serves multiple customer groups with
different needs and characteristics.
➢ Multi functional platform/market: In order to make daily business
operations smooth, some companies will provide services to
interdependent customer groups. A credit card company will provide
services to cardholders and assist merchants who accept these credit
cards.
➢ Channel: The company can provide its value proposition to target
customers through different channels. An effective channel will distribute
the company's value proposition in a fast, efficient and cost-effective way.
Organizations can reach customers through their own channels
(storefronts), partner channels (main distributors), or a combination of the
two.

5. ➢ Customer relationship: In order to ensure the survival and success of
any business, the company must determine the type of relationship to
establish with its customer base. This element should address the three
key steps in the relationship with customers: how the company acquires
new customers, how the company keeps customers buying or using its
services, and how the company can increase revenue from current
customers.
➢ Various forms of customer relationships include:
➢ Personal assistance: assistance in the form of interaction between
employees and customers. This assistance is performed during the sale
and/or after sale.
➢ Dedicated personal assistance: The most intimate and hands-on
personal assistance, in which sales representatives are assigned to deal
with all the needs and problems of special customer groups.
➢ Self-service: The type of relationship transformed from the indirect
interaction between the company and the customer. Here, the
organization provides the tools customers need to serve themselves
easily and effectively.
➢ Automated service: A system similar to self-service, but more
personalized because it can identify individual customers and their
preferences. For example, Amazon.com makes book recommendations
based on the characteristics of previously purchased books.
➢ Community: Create a community to allow direct interaction between
different customers and the company. The community platform has
produced a scene in which knowledge can be shared and problems
between different customers can be solved.
➢ Co-creation: Build personal relationships through customers' direct
investment in the final result of the company's products/services.
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6. ➢ Financial
➢ Cost structure: Describe the most important monetary consequences
when operating under different business models. The company's DOC.
➢ Business structure category:
➢ Cost-driven-this business model is dedicated to minimizing all costs and
no frills. Such as low-cost airlines
➢ Value-driven-less focus on cost, this business model focuses on creating
value for products and services. For example, Rolex (Lolex) Louis Vuitton
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7. ➢ Features of cost structure:
➢ Fixed costs-costs remain the same between different applications. Such
as salary, rent
➢ Variable costs-Costs vary according to the volume of production of goods
or services. Such as music festival
➢ Economies of Scale-Costs fall with the number of goods ordered or
produced.
➢ Economies of Scope-Costs are reduced due to the consolidation of other
businesses that are directly related to the original product.
➢ Source of income: the way the company obtains income from each
customer group. Several ways to generate revenue streams:
➢ Asset sale-(the most common type) sale of ownership of a physical
object. E.g. Retail company
➢ Usage fee-the cost of using a particular service. E.g. UPS
➢ Subscription fee-income from the sale of continuous services. Such as
Netflix
➢ Borrowing/Renting/Renting – Grant exclusive rights to assets within a
specific period of time. Such as car rental
➢ Licensing-revenue generated by collecting the use of protected
intellectual property.
➢ Brokerage fees-income generated by intermediate services between two
parties. For example, the broker’s commission for selling the house
➢ Advertising-revenue generated from product advertising fees.
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