You will use the Business Model Canvas at the Business Model Design Wien workshop to design, build and most of all search for new business models. The Business Model Canvas was first presented in the book Business Model Generation, which itself was published as an innovative business model and is today available in eighteen languages.
NINE BASIC BUILDING-BLOCKS OF THE BUSINESS MODEL CANVAS
Business Model Canvas is a proven tool used in organizations no matter of their size, industry or sector, or your position in the company. It’s an extremely popular tool, currently being used by over 650,000 users. It is useful for both the analysis and business model design as well as for co-use with other tools such as the SWOT analysis and Blue Ocean Strategy.
There are nine basic building-blocks at the Business Model Canvas. The heart of the Canvas is the Value Proposition. What is the value that you are offering? One of the possibilities you have to design your value proposition is to identify what is really the problem that you are or would like to solve? And at the same time what is the solution that you are offering? That’s your Value Proposition.
RIGHT SIDE OF THE BUSINESS MODEL CANVAS
Customer Segments is the following bulding-block on the Canvas. In the case you already know who your customer is, this building block will be the start of your business model design. In that case Value Proposition is the second step. Customer segments in general are designed up front. Yes, designed up front. Similar as web designers use so called “personas” to design websites. To find out who your customer really are and what is “the job to be done” with your product or service you don’t necessarily a complex and expensive market research. There is a very informative and entertaining at the same time video on the subject in the case of milkshakes (video, 4:13 minutes) from one of the most influential business professors at Harvard, Clayton Christensen.
Distribution Channels define how the value will be transferred to your users or customers. It’s one of the key components of the business model. In today’s flood, multi-distribution channels the emphasis to design appropriate individual channels is only more important. These first three building blocks of the Business Model Canvas—Value Proposition, Customer Segments and Channels—are forming the so-called backbone of your business model. Similar as you couldn’t walk without the backbone, your business model will not work without it. In the workshop we’ll walk the talk and have a special emphasis on the backbone of your designed business models.
What kind of Customer Relationships do you have with your customers is the next building-block of the Business Model Canvas. Do you orient yourself over and over again to new customers or are you trying to retain existing customers? Do you have a personal or automated relations with your customers? Do you have long-term or transactional (ie one-off) relationships with customers? Just a hint. The extremes do not exist in this case. You are always somewhere in between.
Revenue Streams. Yes, revenue streams must be designed up front. No questions about that.
LEFT SIDE OF THE BUSINESS MODEL CANVAS
On the left side of the Business Model Canvas we have the Key Resources and Key Activities. Both activities and resources should be primarily support to the right side of the Canvas. They should enable the realization and dissemination of the value proposition, distribution channels, customer relationships and not least revenue resources.
Key partners are the sources outside of your organization. First, you need to identify who your key partners are? What are the key sources that you are retrieving from the key partners? And what key activities provide the key partners? Opportunities for cooperation with key partners within the business models are many, sometimes it is essential to help these partners find their own breakthrough business model, innovation or service. In that case, you could reach a win-win strategy.
And last but not least. Cost structure. What are the most expensive costs of the business model? Which key resources are the most expensive? And which key activities are the most expensive?