Written by : Alexander Osterwalder & Yves Pigneur

Presented by : Manpreet Singh

Are you an entrepreneurial spirit?

Are you constantly thinking about how tocreate value and build new businesses, or howto improve or transform your organization?

Are you trying to find innovative ways of doing business to replace old, outdated ones?

Canvas

The Business Model Canvas : A shared language for Describing, visualizing, assessing, and Changing business models

• The 9 Building Blocks

• The Business model canvas template

The 9 Building Blocks

1. Customer SegmentsThe Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve.

There are different types of Customer Segments.2. Mass Market3. Niche Market4. Segmented bank5. Diversified amazon6. Multi sided credit card, news paper

A Customer

2. Value PropositionsThe Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment

Customer segment & Value proposition

The Value Proposition is an aggregation, or bundle, of benefits that a company offers customers.

Values may be Quantitative (e.g. price, speed of service) Qualitative (e.g. design, customer experience).

Following elements can contribute to customer value creation1. Newness2. Performance3. Customization4. Getting the job done5. Design6. Brand/Status7. Price8. Cost reduction9. Risk reduction, 10. Risk reduction, 11. Accessibility, 12. Convenience

3. ChannelsThe Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition

Channels serve several functions, including:• Raising awareness • Evaluate a company's Value Proposition• To purchase specific products and services• Delivering a Value Proposition to customers• Post-purchase support

Channels have five distinct phases. Each channel can cover some or all of these phases

Channel types Channel Phases

Part

ners

Ow

n

Sales Force

Web sales

Own Stores

Partner stores

Wholesaler

Dire

ctIn

dire

ct

1. Awareness

2. Evaluation

3. Purchase

4. Delivery

5. After sales

4. Customer RelationshipsThe Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments

Customer relationships may be driven by the following motivations:• Customer acquisition• Customer retention• Boosting sales (up selling)

1. Personal Assistance2. Dedicated personal assistance (banks)3. Self service (Online shopping)4. Automated Services (Customization online)5. Communities (forums)6. Co-creation (Duster clinic)

Types of Customer Relationships

5. Revenue StreamsThe Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings)

Two types of Revenue Stream

1. One time customer payments2. Recurring Payments

Ways to generate Revenue

1. Asset sale2. Usage fee (hotel room)3. Subscription fees (gym, nokia music)4. Lending/renting/leasing (zipcar)5. Licensing (Movies)6. Brokerage fees (Real estate)7. Advertising (pepsi IPL)

Pricing Mechanisms8. Fixed Menu pricing9. Dynamic pricing

6.Key ResourcesThe Key Resources Building Block describes the most important assets required to make a business model work

Depend upon the type of business model

Key resources can be categorized as follows:1. Physical (buildings)2. Intellectual (brands, Patents)3. Human 4. Financial : to carry on operations

Key ActivitiesThe Key Activities Building Block describes the most important things a company must do to make its business model work

Key activities can be categorized as follows:1. Production2. Problem solving3. Platform/network

8.Key PartnershipsThe Key Partnerships Building Block describes the network of suppliers and partners that make the business model work

We can distinguish between four different types of partnerships:1. Strategic alliances between non-competitors2. Coopetition : strategic partnerships between competitors3. Joint ventures to develop new businesses4. Buyer-supplier relationships to assure reliable supplies

Three Motivations for creating Partnerships1. Optimization & economy of scale (lays, coke)2. Reduction of risk & uncertainty (Blue ray)3. Acquisition of particular resources (micromax) & activities

9. Cost StructureThe Cost Structure describes all costs incurred to operate a business model

Two types of cost structures1. Cost driven2. Value driven

Characteristics of cost structure3. Fixed costs4. Variable costs5. Economies of scale6. Economies of scope

logic Emotion

Brain

Left Right

Efficiency Value

Suppliers

Competitors

Coca cola

Joint venture