2. 2
What is the purpose of a Business Model Canvas?
A Business Model describes the rationale of how an organization creates, delivers and captures value.
A Business Model Canvas is a strategic management and lean tool that will help you develop new business models or
improve existing ones. It includes 9 building blocks, which were initially proposed in 2005 by Alexander Osterwalder:
1. Key Partners
2. Key Activities
3. Key Resources
4. Value Propositions
5. Customer Relationships
6. Channels
7. Customer Segments
8. Cost Structure
9. Revenue Stream
Feasibility: Can the company deliver its products & services?
Desirability: Is there a customer demand for the company’s products & services?
Viability: Can the company be profitable?
3. 3
Best practices to effectively use the Business
Model Canvas
When we use the Business Model Canvas with our clients, we usually like to organize workshops with key stakeholders.
The most common mistake we’ve noticed over the years is when a CEO only invites the Corporate & Business Strategy
team to the workshops. The stakeholders need to come from different functions such as Corporate & Business Strategy,
Finance, Sales, Marketing, etc. That way your Business Model will be designed or refined based on many different
perspectives. Besides, the different functions will feel better engaged. And the more they feel engaged, the better they
will commit to the implementation of the Business Model.
We usually print on the wall a version of the Business Model Canvas (see next slide) in extra large (e.g. A1), so groups of
people can jointly start sketching and discussing business model elements with post-it notes or board markers. Many of
our clients also like to simply project the Business Model Canvas on a big screen using Powepoint, with one person
responsible for writing the stakeholders’ inputs in real time. When available, we also like to use an interactive display
whiteboard such as Google Jamboard. Interactive display whiteboards are great tools, especially when you have
stakeholders attending your workshop online, which seems to be increasingly the case.
Please note that defining your business model should be an iterative process, that will be refined along the way. The first
version of your business model will include many hypotheses. The idea is to test these hypotheses in order to quickly
validate or invalidate these hypotheses. Start by testing the most critical hypotheses.
4. Business Model Canvas
Tutorial
Key Partners
• List the key partners that will
help you optimize your
operations, reduce your risks,
and get a competitive
advantage.
Value Propositions
• List the products and services
you offer to meet the needs of
your customers. Also include in
this section your unique selling
proposition (USP) that will
distinguish you from your
competitors.
Key Activities
• List the most important
activities required to implement
the company's value
proposition.
Customer Relationships
• Identify the type of relationship
you want to create with your
customer segments. How will
you interact with them?
Cost Structure
• Estimate how much you are planning to spend on Product development, Marketing,
Sales, Website design & development, etc.
Revenue Stream
• Estimate how much you are planning to earn from your different sources of revenue.
• Estimate your earnings based on your costs and revenues.
Customer Segments
• Identify which customers you
try to serve (e.g. age, gender,
location, interests, languages,
habits, etc.).
Key Resources
• List the resources that are
necessary to create value for
your customers. These
resources could be human,
financial, physical and
intellectual.
Channels
• List the different channels you
will be using to deliver your
value proposition to your
targeted customers. An
organization can reach its
clients through its own
channels, partner channels, or
a combination of both.
Feasibility Desirability Viability
Caption:
5. Key Partners
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Value Propositions
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Key Activities
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Customer Relationships
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Cost Structure
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Revenue Stream
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Customer Segments
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Key Resources
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Channels
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Business Model Canvas for [insert company name or logo]
Template
Feasibility Desirability Viability
Caption:
6. Key Partners
• People who sell on the
platform.
• Bloggers who earn a
commission for any referrals
that lead to a sale.
• Independent authors who
publish their works through
Kindle Direct Publishing.
• Companies providing storage
spaces.
Value Propositions
• Jeff Bezos defines that
Amazon’s business model is
based on three value
propositions: low price, fast
delivery and a wide selection of
products.
Key Activities
• Development, maintenance and
expansion of its platform.
• Management of the entire
supply chain
• Cloud computing
• Production of films, series from
its video platform
• Marketing all its products and
services.
Customer Relationships
• Amazon’s focus is to have a
healthy and long-lasting
relationship with its customers.
• They maintain several
communication channels open
with their consumers, such as
reviews and comments on the
platform, phone, online chat
and email contact.
Cost Structure
• IT structure.
• Customer service centre.
• Software development & maintenance and information security.
• Marketing.
• Fulfilment centres.
Revenue Stream
• Amazon Marketplace: Amazon asks for a fee from its sellers
• Amazon Prime: subscribers have access to videos, music, and a free two-day shipping
• Amazon Web Services: a low-cost complete IT structure platform
• Amazon Kindle: Users can buy, browse and download books, magazines & newspapers
• Amazon Advertising, which offers sponsored ads
Customer Segments
• The customer segments of
Amazon can be divided into
basically three groups: sellers,
buyers and developers.
• Sellers are all the companies
that use the Amazon’s e-
commerce platform to sell their
products.
• Developers are all the
community involved with the
Amazon Web Services (AWS).
• And the buyers are the millions
of people across the world who
acquire products and services
through Amazon’s channels.
Amazon tracks its customers
based on some characteristics,
such as interest, engagement
and personal information (age,
gender, geographical space,
language, among others).
Key Resources
• Its technological infrastructure,
which needs to be broad and
very secure, in order to keep
the whole chain running without
interruption and without losses
• Offices and warehouses
• Human resources (e.g.
designers, engineers,
developers etc.)
Channels
• The Amazon website is its
largest and most important
channel.
• As an internet-based company,
its marketing is basically digital,
including advertisements,
sponsored publications and e-
mail marketing.
Real-life example
Business Model Canvas for
Real-life example
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