dal business model canvas al business plan

Delta Air Lines, Inc. (DAL): Business Model Canvas

• Marketing Mix

Key Partnerships

Delta Air Lines, Inc. (DAL) has established several key partnerships which are crucial in driving operational efficiency, expanding market reach, facilitating technological advancements, and enhancing customer service. These partnerships play a vital role in maintaining Delta's competitive edge in the fiercely competitive airline industry.

Partnerships with Major Aircraft Manufacturers

• Delta Air Lines maintains strategic relationships with leading aircraft manufacturers such as Boeing and Airbus. These partnerships ensure Delta has access to the latest aircraft models optimized for fuel efficiency, reliability, and passenger comfort. By aligning with these manufacturers, Delta is able to influence design and feature enhancements specific to their operational needs and customer preferences.

SkyTeam Airline Alliance Members

• As an integral member of the SkyTeam airline alliance, Delta collaborates with 19 other airlines. This alliance enables seamless connectivity across an extensive global network, allowing reciprocal benefits such as shared lounges, coordinated timetables, and mutual loyalty program benefits. This partnership greatly enhances the reach of Delta's services, allowing it to offer more frequent flights and access to a wider range of international destinations.

Codeshare Agreements with Other Airlines

• Delta has entered into codeshare agreements with various international and domestic airlines. These agreements allow airlines to share the same flight, providing Delta an expanded network without the need for additional aircraft. This not only maximizes route efficiency but also offers passengers more destinations and flight combinations. Moreover, these partnerships enhance route connectivity and facilitate smoother passenger transfers, which improves customer satisfaction.

Airport Authorities and Terminal Operators

• Collaboration with airport authorities and terminal operators is crucial for securing favorable terminal positions and investment in facilities. These relationships help Delta ensure that operational needs are met, including timely gate availability and optimal terminal amenities, which significantly impact customer experience and operational efficiency.

Technology and IT Service Providers

• Technology is central to Delta's ability to provide a streamlined and satisfying customer experience. By partnering with leading IT and technology service providers, Delta integrates advanced solutions for everything from booking systems and mobile applications to operational logistics and real-time customer service. These partnerships enable Delta to leverage emerging technologies such as artificial intelligence and machine learning to optimize flight schedules, predict maintenance issues, and personalize customer interactions.

Travel Agencies and Booking Platforms

• In an effort to capture a broad customer base, Delta collaborates with various travel agencies and online booking platforms. This broadens their sales network and allows customers greater flexibility in how they purchase travel. Partnering with these agencies also aids in promotional and marketing efforts, offering packages that include airfare, accommodation and other services, which in turn attracts a higher number of customers to Delta’s services.

Through these strategic partnerships, Delta Air Lines not only fortifies its service offering but also ensures adaptability in a rapidly changing global market. These collaborative efforts are pivotal in sustaining Delta's growth and influential position in the airline industry.

Key Activities

Delta Air Lines, Inc. engages in several key activities essential for its day-to-day operations and long-term success in the aviation industry. These activities are critical in ensuring that Delta maintains its market position as a leading global airline. Each activity is interconnected and plays a pivotal role in the company's operational strategy and customer satisfaction levels.

• Passenger Transportation : The core activity of Delta Air Lines involves the transportation of passengers across a broad network of domestic and international routes. Delta manages a comprehensive flight schedule, offering connectivity between major cities and facilitating convenient travel options for both business and leisure travelers.
• Aircraft Maintenance and Operations : Ensuring the reliability, safety, and efficiency of the fleet is paramount. Delta Air Lines operates with a stringent maintenance protocol. The airline conducts regular inspections, repairs, and overhauls of aircraft to comply with aviation regulations and manufacturer recommendations. This also encompasses the management of logistical aspects such as fueling, aircraft loading, and adherence to environmental standards.
• Flight Scheduling and Management : Effective flight scheduling and management are critical in minimizing operational costs and maximizing resource utilization. Delta uses sophisticated algorithms and forecasting models to optimize flight routes and schedules, accommodating variables such as passenger demand, weather conditions, and airspace restrictions. This activity ensures optimal fleet utilization and adjusts in real-time to dynamic operational conditions.
• Marketing and Promotion of Airline Services : Delta actively engages in the marketing and promotion of its services to maximize brand exposure and attract customers. This includes digital marketing, loyalty programs, partnerships, and global advertising campaigns. Marketing strategies are tailored to different markets and customer segments to enhance the appeal and reach of Delta's transportation offerings.
• Customer Service Delivery : Delivering superior customer service is essential for customer retention and satisfaction. Delta invests in training and development for its staff to ensure high-quality service across all touchpoints. This includes service at check-in counters, lounges, and onboard service. The airline also implements advanced customer service technologies, such as mobile apps and automated kiosks, to streamline the travel experience and provide real-time travel updates and assistance.
• Implementation of Safety and Security Measures : Safety and security are the foremost priorities for Delta Air Lines. This involves rigorous training for crew and staff, implementation of advanced security protocols, and compliance with both national and international safety standards. Continuous enhancement of security measures and emergency procedures ensures the well-being of passengers and staff at all times.

These key activities are integral to Delta Air Lines' operational framework, supporting its strategic objectives and ensuring operational excellence in a highly competitive and regulated global industry.

Key Resources

The diverse resources of Delta Air Lines, Inc. (DAL) are crucial to its operations, competitiveness, and ability to innovate within the airline industry. The strategic allocation and management of these resources underpin the carrier's service delivery and operational success.

Fleet of Varied Aircraft Types

• Delta's fleet comprises a mix of narrow-body, wide-body, and regional jets that facilitate a range of services from short-haul domestic to long-haul international flights. The flexibility in aircraft types allows Delta to optimize its network efficiency and meet market demand precisely.

Skilled Flight and Ground Personnel

• The airline's team includes highly trained pilots, attentive cabin crews, efficient ground staff, and experienced maintenance engineers. Each member's expertise ensures safety, operational efficiency, and customer satisfaction, thus strongly positioning Delta in the marketplace.

Airport Facilities and Lounges

• Delta controls significant airport real estate, including terminals and gates, especially at key hubs like Atlanta, Detroit, and New York-JFK. Their branded Sky Clubs enhance customer experience with a focus on comfort and convenience, increasing passenger loyalty and premium brand perception.

Proprietary Software for Reservations and Operations

• The company leverages advanced proprietary technology for managing reservations, customer management, and operational logistics. This software aids in optimizing flight schedules, managing passenger bookings, and enhancing the efficiency of crew assignments and aircraft maintenance, which are pivotal for minimizing costs and improving service quality.

Brand Reputation and Loyal Customer Base

• Delta is known for its reliability, customer service, and safety, reinforcing a strong brand reputation across the global marketplace. This reputation helps in sustaining a loyal customer base, which is critical to maintaining revenue streams and competitive advantage.

Global Route Network

• The extensive global route network allows Delta to offer services to a large geographic area, thereby attracting a broad customer base. This network is supported by strategic alliances and partnerships with other global carriers, expanding their service reach and operational flexibility.

The synergy between these key resources provides Delta Air Lines with a robust framework to maintain and enhance its market position, adapt to changing industry conditions, and pursue strategic growth opportunities.

Value Propositions

Delta Air Lines, Inc.'s value propositions focus on core areas essential to quality air service, reflecting their commitment to offering an exemplary flying experience. Featuring a wide range of offerings, Delta seeks to meet the needs and preferences of diverse customer segments.

• Reliable and Timely Air Travel : Delta prioritizes operational efficiency and reliability, understanding the value of customers' time. This reliability is backed by consistent high rankings in on-time arrivals, which is a critical factor for business travelers and holidaymakers alike.
• Extensive Domestic and International Routes : Catering to globetrotters and domestic passengers, Delta operates an extensive network that connects major hubs and cities worldwide. This extensive network ensures seamless service to passengers, covering key markets across continents.
• Premium Travel Experiences via Delta One and Delta Comfort+ : Delta offers differentiated seating categories to cater to the varying needs of travellers. Delta One , an international business class product, offers lie-flat seating, elevated in-flight cuisine, and premium amenities. Delta Comfort+ provides additional perks like extra legroom, priority boarding, and special overhead bin space in the economy class.
• Frequent Flyer Program, SkyMiles : SkyMiles, Delta’s loyalty program, enhances passenger loyalty through point accumulation that can be redeemed for flights, upgrades, and other services. The flexibility and value offered by SkyMiles foster long-term relationships with frequent flyers.
• Enhanced In-flight Services and Amenities : To improve the in-flight experience, Delta invests in high-speed Wi-Fi across its fleet, offers an extensive library of in-flight entertainment, and provides a range of dining options that cater to various dietary preferences and needs.
• Strong Focus on Customer Service and Safety : Delta places significant emphasis on customer service, training staff to handle situations sensitively and professionally while ensuring customer needs and expectations are met. Safety is paramount, with ongoing investments in technology and practices to maintain high safety standards.

Through these value propositions, Delta Air Lines, Inc. aims to set itself apart in the competitive airline industry, ensuring that customer satisfaction and service quality are at the forefront of their operational strategy.

Customer Relationships

Delta Air Lines, Inc. (DAL) has crafted a robust customer relationship strategy that is essential in fostering loyalty and enhancing customer experience. Key elements of this strategy include personalized services, multi-channel customer support, comprehensive loyalty programs, continuous communication, and tailored services for passengers with specific needs.

Personalized Service for Frequent Flyers

To enhance the flying experience for frequent flyers, Delta offers personalized services that cater to the preferences and history of its passengers. This approach not only fosters a deeper connection but also encourages repeat business by recognizing and rewarding customer loyalty.

Customer Service Through Multiple Channels

• Call Centers: Available 24/7, providing assistance with bookings, flight changes, and other inquiries.
• Email: Support for non-urgent communications, allowing customers to inquire and resolve issues at their convenience.
• Social Media: Active engagement on platforms like Twitter and Facebook helps address customer concerns promptly and publicly, showcasing the airline's commitment to transparency and customer satisfaction.

Loyalty Programs and Membership Benefits

Delta's loyalty program, SkyMiles, offers members the ability to earn miles not only through flights but also via a broad range of partners in retail, hospitality, and finance, which can then be redeemed for flights, upgrades, and other services. The tiered membership levels — Silver, Gold, Platinum, and Diamond — provide increasingly valuable benefits, encouraging higher spending and more frequent flights.

Regular Updates and Communication

Delta ensures customers are well-informed through timely updates via their official app and email communications. This includes real-time notifications about gate changes, delays, and baggage claim areas as well as promotional offers and safety guidelines, which are critical for building trust and customer retention.

Special Services for Passengers with Disabilities

Delta is committed to accessibility, offering numerous services tailored to passengers with disabilities. These services include priority boarding, special seating arrangements, and assistance at the airport and during flights. Delta's dedication to inclusivity not only complies with regulatory requirements but also enhances travel experience for all passengers, reinforcing its customer-centric values.

Delta Air Lines employs a multi-channel strategy to reach and service its customers, integrating both digital and physical channels to ensure comprehensive coverage and accessibility. These channels are crucial in facilitating the customer journey, from discovery and booking to post-flight services.

Delta’s Official Website

The cornerstone of Delta’s digital strategy is its official website. This platform serves multiple functions, including ticket booking, flight management, check-in, and customer support. Users can also access detailed travel information, updates on flights, and loyalty program tracking. The integration of this system ensures seamless service delivery, catering to tech-savacious travellers who prefer direct online transactions.

Delta's mobile app complements the official website by providing a convenient, on-the-go tool for managing flights, booking tickets, and accessing a digital boarding pass. This app is designed to enhance the customer experience through personalized notifications, such as gate changes or flight delays, and the ability to track baggage. The app’s design is focused on usability, ensuring that all necessary services and information are easily accessible.

Physical and Online Travel Agents

Recognizing that some customers prefer traditional booking methods or require more personalized services, Delta collaborates with both physical and online travel agents. This strategy not only broadens its market reach but also caters to less digital-savvy customers or those seeking more complex travel arrangements that might require professional assistance. Physical agents are also important for reaching certain demographics and markets where digital penetration is lower.

Direct Sales through Airport Counters

Airport counters play a critical role, especially for last-minute travelers or those facing issues that require immediate resolution. These counters provide ticket booking, issue resolution, and personalized customer service directly at the point of travel. Delta ensures that its counters are staffed with knowledgeable personnel to maintain high service standards and prompt customer responses.

Social Media Platforms

Digital customer engagement is channeled through various social media platforms where Delta not only promotes its services but also engages directly with customers. These platforms are used for customer support and to disseminate timely information. Especially during travel disruptions, social media becomes a vital tool for real-time communication and supports the brand's commitment to customer care.

• Official Website: Central hub for all customer needs from booking to boarding.
• Mobile App: Enhances user experience through added flexibility and mobile-exclusive features.
• Travel Agents: Extends reach to broader customer segments, catering to varying preferences between digital and physical booking experiences.
• Airport Counters: Provides immediate, on-the-spot customer service and support.
• Social Media: Offers a platform for real-time engagement, emergency updates, and promotional communication.

Each of these channels supports Delta’s strategic objective of offering seamless, accessible, and efficient services to its diverse customer base. By integrating these various channels into a cohesive strategy, Delta continues to elevate its customer service and strengthen brand loyalty among its travelers.

Customer Segments

Delta Air Lines, Inc. has strategically crafted its customer segments to maximize reach and optimize service delivery across various market segments. Understanding the diverse needs of these unique segments allows Delta to tailor its offerings and enhance customer experience accordingly. The primary customer segments include:

• Business Travelers : This segment includes individuals traveling for business purposes, who prioritize efficiency, flexibility, and convenience during their travels. Delta addresses these needs through services like Sky Priority, offering quicker check-in, faster security clearance, and prioritized boarding.
• Leisure Travelers : Typically consisting of individuals and families traveling for vacation or other personal purposes, this segment looks for value, comfort, and enjoyable travel experiences. Delta caters to these desires with varied fare options and in-flight entertainment to enhance overall travel satisfaction.
• Premium Class Travelers : Targeting customers who opt for first class, business class, or premium economy, this group seeks superior comfort, privacy, and exclusive services. For this segment, Delta provides luxurious seating, exceptional culinary offerings, and additional services such as access to Delta Sky Clubs.
• Frequent Flyers and Loyalty Members : Delta SkyMiles members, who travel often with the airline, fall into this category. Recognizing the importance of loyalty, Delta offers tiered benefits including bonus miles, seat upgrades, and exclusive partnership offers to ensure continuing customer commitment.
• Corporate Clients : Large corporations requiring travel solutions for their employees represent this segment. Delta helps manage corporate travel budgets while ensuring flexibility and convenience for employees. Corporate deals often include volume discounts and customized travel policies.
• Travel Agencies and Groups : Including both traditional travel agencies and online travel agencies (OTAs), as well as groups traveling for specific occasions like conferences or sporting events. Delta works closely with these entities to provide group fare discounts and streamlined booking processes.

Through effective segmentation, Delta Air Lines not only enhances its service offerings but also strategically aligns its operational priorities and marketing strategies to meet the diverse needs and preferences of its expansive customer base.

Cost Structure

The cost structure of Delta Air Lines, Inc. is multifacetal, reflecting the varied demands of the expansive aviation sector. With expenses that span from fuel to marketing, each category plays a critical role in Delta's fiscal configuration.

Fuel and Operational Costs

Fuel expenses represent one of the largest outlays for Delta, significantly impacting profit margins. Prices fluctuate based on global oil markets, compelling Delta to engage in strategic fuel hedging to mitigate risks. Operational costs also include expenses related to flight operations and ground handling, critical for maintaining safety and efficiency standards.

Labor and Personnel Expenses

Labor costs are another significant expenditure for Delta, encompassing salaries, wages, benefits, and training for thousands of employees. With a workforce comprising pilots, cabin crew, engineers, ground staff, and administrative personnel, competitive compensation packages are fundamental to attracting and retaining skilled professionals.

Aircraft Acquisition and Maintenance

For a leading airline, maintaining a modern and efficient fleet is imperative. Capital expenditures in aircraft acquisition are immense, driven by Delta's drive to enhance fuel efficiency and passenger comfort. Regular maintenance and upgrades equally draw substantial resources, ensuring compliance with safety standards and minimizing downtime.

Marketing and Sales Costs

To maintain its brand presence and market share, Delta invests significantly in marketing and sales. This includes advertising, promotions, customer service, and loyalty programs designed to foster client retention and value addition. These expenses are vital for sustaining competitive advantage and stimulating demand.

Technology Infrastructure Maintenance

In the digital era, robust IT systems are essential for operational success. Delta's expenditure on technology maintenance covers systems for reservations, check-ins, and operational logistics. Such investments secure the efficiency and reliability of customer engagements and operational processes.

Airport Fees and Rentals

Aircraft parking, gate usage, and passenger service facilities involve substantial costs. Airport fees vary significantly across global locations and directly affect operational expenses. The effort to manage these costs is crucial for maintaining overall profitability.

The cost structure of Delta Air Lines clearly demonstrates the critical balance required between managing ongoing operational costs and investing in growth and efficiency strategies. Each component, while distinct, is interlinked with others, underlining the complexity of financial management within the aviation industry.

Revenue Streams

Delta Air Lines, Inc. has diversified its revenue streams to ensure stability and growth in the competitive airline industry. These streams are carefully aligned with the company's strategic operations and market positioning.

Ticket Sales for Domestic and International Flights

The primary source of revenue for Delta is the sale of air tickets for both domestic and international flights. This includes fares across various classes such as economy, premium economy, business, and first class. Ticket prices fluctuate based on demand, seasonality, route popularity, and other market dynamics.

Frequent Flyer Program Partnerships

Delta’s frequent flyer program, SkyMiles, significantly contributes to its earnings through partnerships with credit card companies, hotels, and car rental services. Members earn miles that can be redeemed for flights, upgrades, and other services, encouraging repeat business and brand loyalty.

Ancillary Services

• Baggage Fees: Delta charges for checked luggage, with rates varying by route and the number of bags checked.
• Upgrades: Passengers can pay to upgrade to seats with additional legroom or to higher classes, generating considerable additional revenue.

Cargo Transport Services

Delta leverages its extensive network to offer cargo transport services. This not only includes traditional freight but also specialized logistics solutions for pharmaceuticals, perishables, and other time-sensitive products.

In-flight Purchases

Revenue from in-flight purchases comprises sales of food, beverages, and duty-free items. Delta has enhanced its in-flight offerings, focusing on quality and variety to boost this revenue segment.

Corporate and Bulk Travel Agreements

Delta maintains strategic relationships with corporations to provide business travel solutions. These agreements often come with commitments of a specific volume of travel, securing steady income and enhancing customer retention.

By integrating these diverse revenue streams, Delta not only enhances its financial strength but also decreases its vulnerability to economic fluctuations in any single market or segment.

5-Year Financial Model

40+ Charts & Metrics

DCF & Multiple Valuation

Free Email Support

• Choosing a selection results in a full page refresh.

Business Model Canvas: Explained with Examples

Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.   

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.  

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

• The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
• The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
• The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
• The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
• The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
• It’s easier to edit and can be easily shared with employees and stakeholders.
• The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
• The business model canvas can be used by large corporations and startups with just a few employees.
• The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
• You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
• The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
• A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

• Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

There are different customer segments a business model can target and they are;

• Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.  
• Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
• Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
• Diversified: A diversified market segment includes customers with very different needs.
• Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

• Personal assistance: you interact with the customer in person or by email, through phone call or other means.
• Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.  
• Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
• Automated services: this includes automated processes or machinery that helps customers perform services themselves.
• Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
• Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

• Owned channels: company website, social media sites, in-house sales, etc.
• Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.  

A revenue stream can belong to one of the following revenue models,

• Transaction-based revenue: made from customers who make a one-time payment
• Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

• Asset sales: by selling the rights of ownership for a product to a buyer
• Usage fee: by charging the customer for the use of its product or service
• Subscription fee: by charging the customer for using its product regularly and consistently
• Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
• Licensing: customer pays to get permission to use the company’s intellectual property
• Brokerage fees: revenue generated by acting as an intermediary between two or more parties
• Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

• Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
• Problem-solving: finding new solutions to individual problems faced by customers.
• Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

• Human (employees)
• Financial (cash, lines of credit, etc.)
• Intellectual (brand, patents, IP, copyright)
• Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

• Strategic alliance: partnership between non-competitors
• Coopetition: strategic partnership between partners
• Joint ventures: partners developing a new business
• Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.  

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

• Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
• Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
• Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
• Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
• Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
• Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

Join over thousands of organizations that use Creately to brainstorm, plan, analyze, and execute their projects successfully.

FAQs About the Business Model Canvas

• Use clear and concise language
• Use visual-aids
• Customize for your audience
• Highlight key insights
• Be open to feedback and discussion

More Related Articles

Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

Business Plan vs Business Model Canvas Explained

6 min. read

Updated May 10, 2024

It might be stating the obvious, but planning and preparation are keys to success in business.

After all, entrepreneurs put in hard work to develop their product, understand the market they plan to serve, assess their competitive landscape and funding needs, and much more.

Successful business owners also take time to document their strategies for guiding the growth of their companies. They use these strategies to take advantage of new opportunities and pivot away from threats.

Two common frameworks for documenting strategies – the business model canvas and the business plan – are also among the easiest to get confused.

Though they can complement each other, a business model canvas and a business plan are different in ways worth understanding for any entrepreneur who’s refining their business concept and strategy.

Let’s start by digging deeper into what a business model canvas is. 

• What is a business model canvas?

You may have heard the term “business model” before. Every company has one. 

Your business model is just a description of how your business will generate revenue. In other words, it’s a snapshot of the ways your business will be profitable.

Writing a business plan is one way of explaining a company’s business model. The business model canvas takes a different approach.

A business model canvas is a one-page template that explains your business model and provides an overview of your:

• Relationships with key partners
• Financial structure
• And more…

While the business model is a statement of fact, the business model canvas is a strategic process—a method for either documenting or determining your business model.

It’s meant to be quickly and easily updated as a business better understands what it needs to be successful over time. This makes it especially useful for startups and newer businesses that are still trying to determine their business model.

You can think of a business model canvas as a condensed, summarized, and simplified version of a business plan. It’s a great way to quickly document an idea and get started on the planning process.

The business plan is a way to expand on the ideas from the canvas and flesh out more details on strategy and implementation.

Brought to you by

Create a professional business plan

Using ai and step-by-step instructions.

Secure funding

Validate ideas

Build a strategy

Components of a Business Model Canvas

The simplest way to think about your business model canvas is to map it out visually. A business model canvas covers nine key areas:

• Value proposition : A company’s unique offering in the market and why it will be successful.
• Key activities: The actions that a company takes to achieve its value proposition.
• Customer segments : The types of people or businesses that are likely to want a company’s products or services.
• Channels : How a company reaches customers through marketing and distribution efforts.
• Customer relationships: How a company interacts with customers and maintains important relationships.
• Revenue streams: The ways in which a company makes money.
• Key resources: The assets such as property, equipment and staffing that a company needs to perform its key activities.
• Key partners: The relationships with suppliers, vendors, customers and other stakeholders a company must maintain in order to be successful.
• Cost structure: The major drivers of company expenses that will need to be tracked and managed.

[Want an even simpler alternative? Try downloading our free one-page plan template and start building your plan in less than 30 minutes.]

To get a better sense of how a business model canvas documents business strategy, consider a company like Netflix. The streaming company’s business model is based on generating subscription revenue through its content library and exclusive content.

If Netflix executives were to create a business model canvas, it would map out how the company leverages key resources, partnerships, and activities to achieve its value proposition and drive profitability. The business model is the destination.

The great thing about a business model canvas is that you can quickly document business ideas and see how a business might work at a high level. As you do more research, you’ll quickly refine your canvas until you have a business idea you think will work.

From there, you expand into a full business plan.

• What is a business plan?

If a business model canvas captures what a company looks like when it’s operating successfully, then a business plan is a more detailed version along with a company’s blueprint for getting there.

Think of your business plan as a process of laying out your goals and your strategies for achieving them.

The business plan is more detailed, and changes over time. It examines each aspect of your business, from operations to marketing and financials.

The plan often includes forward-looking forecasts of a company’s projected financial performance. These are always educated guesses. But these forecasts can also be used as a management tool for any growing business.

Comparing actual results to the forecast can be a valuable reality check, telling a business if they’re on track to meet their goals or if they need to adjust their plan.

A business plan is also a must for companies hoping to receive a bank loan , SBA loan , or other form of outside investment . Anyone putting up funds to help you grow will want to see you’ve done your homework.

So a business plan is how you not only prepare yourself, but also show your audience that you’re prepared.

Components of a business plan

While there are several different types of business plans meant for different uses, well-written plans will cover these common areas:

• Executive summary : A brief (1-2 pages) overview of your business.
• Products and services : Detailed descriptions of what you’re selling and how it fills a need in the market.
• Market analysis : Assessing the size of your market, and information about your customers such as demographics (age, income level) and psychographics (interests, values).
• Competitive analysis : Documenting existing businesses and solutions your target customers are finding in the market.
• Marketing and sales plan : Your strategies for positioning your product or service in the market, and developing a customer base.  
• Operations plan : Describing how you will run the business from day to day, including how you will manage inventory, equipment, and staff.
• Organization and management team: Detailing the legal structure of the business, as well as key members, their backgrounds and qualifications.
• Financial Plans : Business financials that measure a company’s performance and health, including profit & loss statements, cash flow statements and balance sheets. Effective financial plans also include forward-looking sales forecasts and expense budgets.

How a business plan and business model canvas inform business strategy

Avoid the trap of using the two terms interchangeably. As we’ve shown, the two have different focuses and purposes. 

The business model canvas (or our one-page plan template ) is a great starting point for mapping out your initial strategy. Both are easy to iterate on as you test ideas and determine what’s feasible.

Once you have a clearer sense of your idea, you can expand the canvas or one-page plan into a business plan that digs into details like your operations plan, marketing strategy, and financial forecast.

When you understand how – and when – to use each, you can speed up the entire planning process. That’s because the business model canvas lays out the foundation of your venture’s feasibility and potential, while the business plan provides a roadmap for getting there.

The work of business planning is about connecting the dots between the potential and the process.

Tim Berry is the founder and chairman of Palo Alto Software , a co-founder of Borland International, and a recognized expert in business planning. He has an MBA from Stanford and degrees with honors from the University of Oregon and the University of Notre Dame. Today, Tim dedicates most of his time to blogging, teaching and evangelizing for business planning.

Table of Contents

• How both inform your strategy

Related Articles

10 Min. Read

When Should You Write a Business Plan?

2 Min. Read

How Long Should a Business Plan Be?

12 Min. Read

Do You Need a Business Plan? Scientific Research Says Yes

3 Min. Read

11 Key Components of a Business Plan

The Bplans Newsletter

The Bplans Weekly

Subscribe now for weekly advice and free downloadable resources to help start and grow your business.

We care about your privacy. See our privacy policy .

The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

No thanks, I prefer writing 40-page documents.

Discover the world’s #1 plan building software

Business Plan vs. Business Model Canvas: What’s the Difference?

The main difference between Business Plan and Business Model Canvas is that a business plan is like a detailed story about your business, while a business model canvas is a simple visual chart.

Before we move to more differences, let’s first understand Business Plan and Business Model Canvas:

Major differences between Business Plan and Business Model Canvas

If you have a related query, kindly feel free to let me know in the comments below.

• Innovative Prompts
• Strategies Packs
• Skills Packs
• SOPs Toolkits
• Business Ideas
• Super Guides
• Innovation Report
• Canvas Examples
• Presentations
• Spreadsheets
• Discounted Bundles
• Search for:

Business Model Canvas: The Definitive Guide and Examples

Before 2004, entrepreneurs suffered from prolonged and cumbersome business plans. Alexander Osterwalder facilitated the creation of a business model by introducing the Business Model Canvas (BMC) .

By definition, it’s a visual template that illustrates various objects of a business model . Osterwalder’s original canvas includes nine elements, which we will have explained below in the article. They represent vital aspects of business survival.

What to Begin With?

Once you decided to use the Business Model Canvas approach, you need to prepare the essentials:

• Decide on the team members involved.
• Allocate time
• Prepare the tools.

The necessary tools depend on how you decide to brainstorm:

• Offline. Download a PDF Business Model Canvas template, and take several colored markers, sticky notes, and anything else you may need. For example, if you are brainstorming in a big team, a board is a must for enhanced convenience.
• Online. Choose the platform where you will work with a template. It can be Google Docs, Omnigraffle, or the Stratygizer web app.

Why Choose Business Model Canvas?

What makes The Business Model Canvas stand out in an array of approaches to business model creation? Its 1-page nature drives the following advantages:

• Focus – With all the data presented on a single page, business owners don’t spread themselves too thin. They formulate key elements and eliminate unnecessary ones.
• Density – It’s much better to read one dense piece of paper than look through a 30-page report.
• Flexibility – The canvas is easy to customize; therefore, you can fill out several templates, compare them, and choose the best one.

About the Nine Business Model Canvas Elements

Let’s elaborate on what is behind the nine Business Model Canvas blocks:

1. Customer Segment

Daily operations highly depend on customers and their behavioral patterns. That’s why customer segmentation is a must when creating a business model.

In this block, you need to describe the buyer persona. The description includes the following:

• Demographics (age, gender, etc.)
• Professional status
• Motivation and goals
• Shopping preferences

This is a basic list of points. You can add specific parameters. For example, software developers may identify the preferred device type. Already-established brands can also introduce visitors’ tiers that differentiate people according to their level of connection with a brand.

Read an in-depth article about customer segments here .

2. Value Proposition

A value proposition is a brief description of your product and its ultimate value for a client. In other words, write down in a Business Model Canvas why consumers should buy your goods or services. Ideally, it solves a problem or drives additional value for an end-client.

Keep in mind that the wording should be precise and short. Don’t describe your value proposition in several sentences. Limit it to a single but eloquent phrase. Here is a good example from Maps.me : “Fast, detailed, and entirely offline maps with turn-by-turn navigation – trusted by over 140 million travelers worldwide.”

Read an in-depth article about value proposition here.

3. Distribution Channels

Osterwalder, together with Pigneur, described five phases of channel development.

• Awareness includes channels that establish the initial contact with the target audience and develop the connection. It usually involves marketing channels.
• Evaluation implies allowing potential buyers to try your goods and see the value. Popular channels are free samples, reviews, and case studies.
• Purchase is about when and by what means customers can buy your product. The channels vary significantly depending on the prevalence of online or offline communication.
• Delivery describes how an end consumer receives a product.
• After-sales is usually limited to customer support that provides after-sales service and resolves problems.

Read an in-depth article about distribution channels here.

4. Customer Relationship

A customer relationship strategy determines how your target audience interacts with your brand. You can choose from five types of customer relationships in terms of the Business Model Canvas:

• Personal assistance is a traditional approach where a customer interacts with a personal assistant when contacting your brand. It implies a high level of personal care and deep, meaningful relationships.
• Self-service is the opposite of personal assistance: a brand doesn’t directly communicate with a consumer – instead, the consumer can understand the product via guides and FAQs.
• Automated service involves AI-based suggestions and bots that can provide basic assistance. This type is more engaging than self-service.
• Communities are spaces developed by a brand itself to help the audience understand the product better. A good example is Oracle, which practices the approach.
• Co-creation implies educating the customers via user-generated content.

Read an in-depth article about customer relationships here.

5. Revenue Streams

The next block of the Business Model Canvas is about determining where your revenue comes from. Here, you should consider the buyer’s persona to identify what the target audience is ready to pay for.

There can be several methods of monetization:

• Direct sales : Implies selling your service or product for a fee. It’s common for the majority of industries.
• Advertising : It’s relevant for such niches as blogging or IT platforms. The revenue comes from advertisers who want to reach your audience.
• Freemium : This applies to services only. Some features are free, while premium ones are paid for.
• Subscription : It’s similar to a fee-based monetization. The only difference is that a consumer pays for getting access to the service for a limited time, not forever.

Read an in-depth article about revenue streams here.

6. Key Resources

In the Business Model Canvas, key resources are divided into four categories. Here are they explained:

• Tangible – Any physical resources, from real estate to equipment. The stocks also fall in the category.
• Intangible – Intellectual property like patents, copyrights, licenses, and customer knowledge
• Human – Your employees that make the business run
• Financial – All the finance, regardless of whether it’s an obligation or not. It includes cash, bank loans, grants or donations, and other finances.

Read an in-depth article about key resources here.

7. Key Activities

Key activities included in a canvas are the business activities vital for work. They vary from industry to industry. Some design this block by uniting the activities into one out of three categories:

• Problem-solving

For example, software developers fall in the first category as they design new products, while an IT company with its own taxi service is attributed to the third category.

Read an in-depth article about key activities here.

8. Key Partners

Key partners are parties like suppliers who are vital to flawless business operations. In other words, a company can’t survive without them. There are four categories to include in the Business Model Canvas:

• Supplier – A partner who supplies you with raw materials or finished goods
• Non-competitors – Companies you team up with to leverage their resources: for example, you can source goods from several suppliers
• Joint ventures – Partners who help you fill the gap: enter a new market or reach a new niche. The result of a joint venture is enhanced mutual profitability.
• Coopetition – Partnership between two competitors, which may take place as a merger to market a new product

Read an in-depth article about key partners here.

9. Cost Structure

All the mentioned above blocks of the Business Model Canvas aren’t implemented for free. Startups and enterprises spend money on production and accompanying services. To set realistic revenue goals, a company needs to estimate the costs first.

The costs vary depending on the industry. For example, some businesses have to cover R&D expenditures, together with production and post-service. Others, however, exclude this debit from the template.

Read an in-depth article about cost structure here.

Applications and Analysis

Once the Business Model Canvas is ready, you need to analyze it. For this, you should assess the canvas in terms of three points:

• Is it logical and coherent? Are there are misaligned blocks? If yes, address the issue.
• What can be improved? If you find any mediocre blocks, devote more time to improve them.
• Are there any other ideas to consider? Maybe you can add something to the existing template or design a new one?
• Does my team agree with the canvas? If not, reconsider the arguable moments. To prove your point of view, rely on data and facts.
• Have I taken into account a long-term competitive advantage? If no, address the point. You need to consider the market and competitors when building a business plan.

What to Do After?

After you have examined the canvas, you can integrate it into your daily routine. Here is how it can be utilized:

• Track the changes. Any company evolves with time. A plan helps to make sure that changes don’t contravene core principles.
• Onboard top-management. The model communicates who you are and how you live. Instead of describing everything on your own, you can let new hires read everything.
• Guide the brainstorming. Every time you have a meeting where a team is generating ideas, place the canvas in front. It will help to reject unfit ideas.

Besides, you can use the same technique in other areas. For example, if you have several customers, you can describe an approach to them with the help of the BMS.

Some Tips for Beginners

If you have never created the Business Model Canvas before, comprehending all the above-mentioned data may be hard. Here are five tips that will help to navigate across the template easier:

• Prefer teamwork: It’s better to brainstorm side by side with reliable and competent team members rather than alone. You reduce the risk of designing the canvas from one perspective.
• Work on a whiteboard: The more space you have, the better. It allows the whole team to have a good look at the template and facilitates the process.
• Stock up on stationery: Colored markers and stickers will help you to group the ideas when brainstorming. Otherwise, you risk ending up with an incoherent Business Model Canvas.
• Devote enough time: Don’t allocate half an hour or schedule an important meeting right after the brainstorming. You will need a minimum of one hour for a draft.
• Determine the sequence of blocks to fill in: It’s advisable to start with customer segmentation or value proposition. After that, you can determine the sequence as it’s convenient for you.

Software for Business Model Canvas

If you prefer digital solutions to traditional paper and markers, you can opt for software to create the Business Model Canvas. There are many useful tools on the web. These three, however, are the best:

• Canvanizer. The tool is free, simple, and shareable. It allows collaborative brainstorming in Google Docs. Later, the canvas can be exported to an image or other formats.
• Strategyzer. The free software is more advanced with deep analytics and enhanced user experience. For example, the tool can assess the financial viability of a business idea. It also offers additional modes: for example, a dashboard for Lean Startup development.
• CNVS. The software with a simple interface is easy-to-understand. It allows building not only the BMC but also a Lean and Feature Canvas.

What Are the Benefits of the BMC?

Businesses of all scopes choose the Business Model Canvas approach because of four core benefits:

• Enhanced Visibility. Since the canvas involves visual presentation, it facilitates data comprehension. The team has all the information in front of their eyes; therefore, the analysis and decision-making are much easier.
• Customization. You can change some blocks of the canvas in no time if they don’t match with others. It won’t take several hours to retype and reprint a 40-page report.
• Focus on Value. Typically, the value of the product is at the core. It means that all the other blocks are designed with the end-benefit in mind.
• A Single Message. A team gets a clear message of the operation. The Business Model Canvas eliminates risks of failure because of misunderstandings.

What Does the Business Model Canvas Lack?

Although the Business Model Canvas is a popular and recognizable approach, many critics revolve around it. In particular, some executives criticize the model because of the lack of:

• Competitors
• Market analysis
• Brand mission
• Key priorities

While it may bother some people, in reality, there is nothing wrong. The nature of the BMC doesn’t imply focusing on these aspects. Its ultimate objective is to facilitate the process of crafting business models. And the template includes the core blocks only. After all, the market and competitors’ external outcomes aren’t shaping the company’s inner structure.

Why Should Already-Established Companies Implement the Business Model Canvas?

Traditionally, the canvas approach is the prerogative of startups. But it can also be useful for already-established enterprises. The BMC covers the following tasks: Helps to identify gaps in the model and discover new opportunities.

• Allows comparing your model to competitors to identify competitive advantages
• Enhances a presentation of a company to potential investors
• Allows examining and testing new business models
• It helps to unite the model and eliminate misunderstandings in a team
• Allows recreating the company from scratch

As can be seen, the Business Model Canvas helps to effectively analyze the whole company or particular project, map out possible changes or gaps, and address them.

Real Examples of the Business Model Canvas

Examples help executives to grasp the basics of the BMC better. Here are two examples of canvases from different industries:

Airbnb is a provider of affordable accommodation around the globe. Its canvas may look like this:

• Customer segments – budget tourists, unconventional travelers, locals seeking extra income
• Value proposition – easy and fast booking, huge offer, competitive prices, local lifestyle
• Distribution channels – social media, travel bloggers, word-of-mouth
• Customer relationships – self-service with customer support
• Revenue streams – a fee system, affiliate marketing
• Key resources – a community of both landlords and guests, platform, IT-specialists
• Key activities – user research, customer support, maintenance
• Key partners – tourists and travelers, hosts, investors, payments providers, insurance companies
• Cost structure – marketing, platform maintenance

LinkedIn is a professional social network.

• Customer segments – HR, professionals seeking employment, marketing specialists
• Value proposition – building a professional network of contact, sourcing potential employees, blogging.
• Distribution channels – app stores, website
• Customer relationships – self-service, customer support
• Revenue streams – freemium, marketing, and hiring solutions
• Key resources – platform, IT-specialists, user-generated content
• Key activities – platform maintenance
• Key partners – users, SlideShare
• Cost structure – marketing, maintenance

The Business Model Canvas is one of the numerous approaches to business modeling. For more than fifteen years of existence, it has proved its worth in the corporate community. Despite some critics, the method is effective and illustrates the business plan precisely. Moreover, thanks to its visual feature, it’s easy to comprehend and assess.

Download a Business Model Canvas Template

Download our free tools below to create your own Business Model Canvas right now.

BUSINESS MODEL CANVAS TEMPLATE PDF

BUSINESS MODEL CANVAS TEMPLATE PPT

BUSINESS MODEL CANVAS TEMPLATE EXCEL

BUSINESS MODEL CANVAS TEMPLATE WORD

BUSINESS MODEL CANVAS TEMPLATE GOOGLE SHEETS

BUSINESS MODEL CANVAS TEMPLATE GOOGLE SLIDES

You may also be interested in the Value Proposition Canvas template , a complementary tool to the Business Model Canvas.

Daniel Pereira

Receive our updates.

Username or email address  *

Password  *

Remember me Log in

Lost your password?

Lean Canvas vs. Business Model Canvas

table of contents

Uncovering the strategic blueprints for success.

Two frameworks are significant in strategic business planning for mapping out business strategies - the Lean Canvas and the Business Model Canvas. These models cater to different stages of business development and various market complexities. They are essential tools for entrepreneurs, business developers, and strategic managers.

In this article, we'll compare the nuances of each framework and help you select the one that best aligns with the unique trajectory of your business. Let's explore these strategic blueprints to understand their application and impact on business success.

The Business Model Canvas: Your business blueprint

The Business Model Canvas, conceptualized by Alexander Osterwalder, is a comprehensive framework that allows organizations to detail, design, and differentiate their business model. It consists of nine essential components:

Key Partners : The network of suppliers and partners that support the business. Key Activities : The most important activities in executing the company's value proposition. Key Resources : The assets required to offer and deliver the previously mentioned propositions. Value Propositions : The collection of products and services that create value for a specific customer segment. Customer Relationships : The types of relationships a company establishes with specific customer segments. Channels : The means through which a company communicates its propositions to its segments. Customer Segments : The different groups of people or organizations an enterprise aims to reach and serve. Cost Structure : The costs involved in operating the business model. Revenue Streams : How a company makes income from each customer segment.

People use the Business Model Canvas to gain a holistic view of their operational and strategic blueprint, ensuring every aspect of the company aligns with its core value proposition and market demands.

The Lean Canvas: A startup's strategic compass

The Lean Canvas, adapted from the Business Model Canvas by Ash Maurya, is specifically tailored for startups and entrepreneurs navigating the uncertain terrains of new ventures.

It focuses on rapid iteration based on direct feedback, emphasizing problem-solving and innovation. The Lean Canvas modifies four of the Business Model Canvas's components to concentrate on: Problem : Identifying the top problems faced by the customer segments. Solution : Proposing solutions to the problems identified. Key Metrics : Measuring the success of the solutions. Unfair Advantage : Something that cannot be easily copied or bought.

These changes underscore the startup's need to quickly find a product-market fit, pivot in response to learning, and use unique strengths to carve out a competitive edge.

Lean Canvas vs Business Model Canvas: Main differences

Introducing a comparative lens, let's navigate the nuanced distinctions and shared pathways between the Business Model Canvas and the Lean Canvas.

While the Business Model Canvas and the Lean Canvas share a structural foundation, they diverge in several key aspects that reflect their distinct purposes:

Target audience focus

The Business Model Canvas is designed with a broader spectrum of businesses in mind, from startups to established enterprises, whereas the Lean Canvas specifically targets startups and entrepreneurs facing high uncertainty.

Approach to market

The Business Model Canvas assumes a certain level of understanding and stability in the market. In contrast, the Lean Canvas is predicated on the assumption that the market is unknown and needs to be discovered or created.

Emphasis on risk

The Lean Canvas places a significant emphasis on identifying and mitigating risks early on, mainly through its focus on problems, solutions, and unfair advantages. The Business Model Canvas, while also considerate of challenges, is more focused on exploiting known opportunities.

Flexibility and adaptation

The Lean Canvas encourages continuous adaptation and pivoting, making it highly dynamic and responsive to change. The Business Model Canvas, though adaptable, is generally used for more stable business environments where changes are less frequent and drastic.

How to choose and implement the right canvas

When selecting between the Lean Canvas and the Business Model Canvas, consider your business's maturity, market understanding, and the nature of the challenges you face:

Startups and entrepreneurs : The Lean Canvas is your ally in the early stages of business development. Its focus on problems, solutions, and rapid iteration makes it ideal for those still exploring their market fit and value proposition. Check out Miro's Lean Canvas template .

Established businesses and scale-Ups : The Business Model Canvas suits businesses with a clear view of their market, customers, and value propositions. It helps refine, articulate, and expand upon the strategies that have propelled your business. Check out Miro's business canvas template .

Implementing your choice

1. Understand your audience : Tailor the canvas to your team and stakeholders' specific needs and understandings.

2. Engage in collaborative workshops : Use Miro to brainstorm , share insights, and build your canvas in real time.

3. Embrace iteration : Both canvases are living documents. Revisit and revise them as you gather more insights and data.

4. Convert insights into actions : Use the canvas as a springboard for strategic decisions and innovation across your business operations.

Conclusion: Crafting your path forward

Both the Lean Canvas and the Business Model Canvas are helpful tools for creating and refining your business's approach to adding value. Choosing between them depends on your business's stage, objectives, and obstacles you want to address. By selecting the most suitable framework for your needs and embracing a continuous learning and adaptation culture, you can lead your business toward long-term success and innovation. Get started with Miro and map out the future of your business. Happy strategizing!

Lean project management methodology

What is Lean Canvas?

Business Model Canvas

Get on board in seconds

Join thousands of teams using Miro to do their best work yet.

• Integrations
• Learning Center

How to Build a Product Roadmap Based on a Business Model Canvas

Could you list all of the key building blocks you need to develop, manage, maintain, market, and sell a product on a single sheet of paper? With the business model canvas, you can! Using the business model canvas approach is a great way to force yourself to focus on the most strategically important elements of your product. As the name suggests, the typical use case for this tool is to outline the fundamental building blocks of a business, but it also can work really well for a product.

Today we’ll show you how the business model canvas works and how you can use it to come up with a high-level product strategy.

What is a Business Model Canvas?

As you can see from the sample example below (thanks, Strategyzer.com), a business model canvas is a one-page summary describing the high-level strategic details needed to get a business (or product) successfully to market.

The categories or buckets contained in a canvas can be customized. But most will look similar to the one here—covering such key areas as:

• The product’s value propositions (what it does and promises)
• Customer segments (who it’s for)
• Key activities (the steps the team must complete to make it successful)
• Key resources (what personnel, tools, and budget the team will have access to)
• Channels (how the organization will market and sell it)
• Customer relationships (how the team will support and work with its customer base)
• Key partners (how third parties will fit into the plan)
• Cost structure (what it costs to build the product as well as how to sell and support it)
• Revenue streams (how the product will make money)

If you think about it, that’s a fairly comprehensive set of building blocks you’ll need to think through for your product before you begin developing it. There will certainly be additional factors that’ll affect your strategy, but if you can fill in these high-level details—which, as you can see, should fit comfortably on a single page—you’ll have a useful strategic guide for developing your product roadmap.

Why Should I Use a Business Model Canvas to Develop a Product Roadmap?

Okay, but why? What’s the benefit of building a business model canvas (or the, even more, stripped-down variation, the lean canvas) to guide my product roadmap ?

There are plenty of reasons. But simply put, you can think of a business model canvas as a mission statement for your product roadmap. It’s a handy reference you can refer to, to make sure your roadmap always reflects all the strategic elements needed for your product’s success.

Tweet This: “Think of a business model canvas as a mission statement for your product roadmap.”

Our co-founder Jim Semick has a couple of great short videos explaining the business model canvas concept, which you can check out in the player below.

As Jim explains, here are a few of the benefits of using a business model canvas to think through product strategies:

1. You can use a business model canvas to roadmap quickly.

You can use this canvas approach in just a few hours (and as Jim says, you can even do it with sticky-notes).

This way, rather than trying to write out every detail about your product plan beforehand, you can just document the highlights—and then you can get rolling translating the canvas into your product roadmap.

2. A business model canvas will be more agile.

One problem with the old structure of documenting a business model—the traditional business plan—was that it was almost always inaccurate as soon as the author finished drafting it.

These meaty plans included detailed cost estimates, revenue projections going years into the future, and long-term plans for growing the staff. How could any of that remain accurate for long?

In product terms, you can think of the business plan as resembling an MRD (Market Requirements Document). It’s long, detailed, and probably mostly untrue by the time it’s done.

But because you can put a canvas together so quickly, it will much more accurately reflect your strategic thinking and your company’s current reality. And if things change, it’ll be easier than a long and detailed plan to adjust. This brings us to Jim’s third benefit…

3. Business model canvas roadmaps allow you to pivot as needed.

If you build a business model canvas to guide your business roadmap , and something happens that forces you to re-prioritize or pivot your product , it will be a lot easier to update this short, high-level document than it would be if you had some monster MRD or business plan to tear apart and edit.

With a one-page business model canvas acting as the strategic undergirding for your roadmap, you’ll always be able to quickly spot any items or plans that need updating whenever priorities change or new realities demand that you adjust your approach.

How Can I Use A Business Model Canvas to Guide My Product Roadmap?

The alexa example.

Let’s talk through a hypothetical example, using Amazon’s Echo device (“Alexa”) as our guide.

Imagine that as they were talking through what belonged in the “Revenue Streams” bucket of the business model canvas, Amazon’s Echo team came up with three sources of revenue to start with:

1) Selling Echo devices.

2) Using the device to sell other stuff as customers ask it to connect to the Amazon marketplace. (“Alexa, please add laundry detergent pods to my shopping cart.”)

3) Licensing Echo’s proprietary speech-recognition technology to other businesses.

Now, if the Echo product team put these on their business model canvas, they’d know that they need to make room for budget, time, and resources on their product roadmap for all of these revenue streams.

Another Hypothetical Example of the Business Model Canvas: Channels

Or think about the Channels bucket in the business model canvas. If your team was building out a canvas, maybe you’d have several ideas for reaching customers:

1) The in-house sales team. 2) Affiliate partners. 3) Word-of-mouth advertising from users.

It’s easy to write. But how are you going to translate that “word-of-mouth” strategy into an actual plan?

Maybe you’ll need to budget time and resources for developing things right into your product that make it easier for users to share their experiences with friends, such as a handy tool to help them tweet about it. Maybe you’ll even want to include an “Invite a friend” feature that lets users easier send a trial license to friends, or a couponing feature that offers some reward to a user who brings in two more users.

The point is, your business model canvas can serve as a great strategic reminder of the things you’ve determined are important enough to make it onto your product roadmap .

So you can always look back and see immediately—it’s just one page, after all—if you’re still working on all of the essential elements of your product, or if you’ve inadvertently strayed from them and gotten lost in the wrong details.

That’s why we’re big proponents of the business model canvas approach to guiding your product roadmap .

Do you have an opinion about using the business model canvas approach for developing and documenting your product’s strategy? Feel free to share them in the comments section.

Product Management Training: 5 Excellent Resources

If you want to become a software developer, one option is to major in computer science or software engineering in...

A Product Manager’s Role in SAFe®

Agile started with software development. Although many organizations have found the principles beneficial. The ability to quickly assess, adjust, and...

5 Roadmap Templates for Product Executives

Product roadmaps shouldn’t be a one-size-fits-all proposition, as different stakeholders care about various elements and require different levels of detail....

Continue exploring

You can search or explore specific categories.

Product Updates

Company news and updates, templates and workbooks, remote product management, product metrics and analytics, product strategy example, product managers, prioritization and backlog, tools and resources, customer-centricity, product leadership, product management, roadmap and roadmap management, product strategy, agile & product development, career and interviews, try productplan free for 14 days, share on mastodon.

• Selecting and Managing Channels in Business Model Canvas

Featured in:

© Entrepreneurial Insights based on the concept of Alex Osterwalder

In this article, we will look at 1) an introduction to the Channels building block , 2) channel phases , 3) channel types , 4) advantages and disadvantages of alternative channels of distribution , and 5) a case study .

INTRODUCTION TO THE CHANNELS BUILDING BLOCK

This building block in the business model canvas defines how an organization communicates with and provides value to its chosen customer segment. Channels are the touch points through which an organization liaises with its customers and as such, play a huge role in defining the customer experience. Channels can be categorized as marketing, sales or distribution channels.

Channels and Customer Relationships are directly linked to the ‘how’ of a company linking with its target customer segment. Most companies have a different medium to attract a customer and separate strategies on how to retain them. It is advisable to list separate channels for different customer segments if your organization is targeting more than one.

Before the 1990’s, companies were severely limited in their choice of channel. In fact, there was only one channel being used; the direct channel in which a customer would go to a score with salespeople and physical distribution occurred. Now companies have the choice of using physical channels or web/mobile channels to deliver their value proposition to their customer segment.

The distribution channel represents one of the quarters of the Marketing Mix and represents how an organization will make its product or service available to the end consumer for consumption or use. A Distribution channel can be direct, which means that the manufacturer sells directly to the customer, or it can contain intermediaries who may buy and resell the product, in the case of merchants, or represent the manufacturer without owning the product, in the case of Agents and brokers. Organizations have to take into account multiple factors when deciding between owning their channels, establishing partners to provide channels or employing an amalgam of both.

An organization which sells bulbs to lighthouses can have access to a multitude of channels such as a website where lighthouse attendants can view and purchase different kinds of bulbs, advertisements placed through Google Ads are also one of the channels. If the organization outsources after-sales services to another company, this company also represents another channel that links the company to the end-user.

A well-thought out Distribution strategy can become a source of competitive advantage for your organization, as is the case for giants such as Dell and Amazon . If your Distribution Channel is customer-centric as well, that is, it is tailored to convenience the end-user, it will be even more successful.  

How to select a distribution channel

When selecting a distribution channel , five elements need to be taken into consideration to ensure a good match for your business;

• The number of customer segments or the size of the market you are targeting.
• Investment required by the distribution channel – these will include an analysis of the different associated costs such as absolute value cost, cost per customer, fixed and variable costs and the profitability each channel option brings to the table.
• Whether the product is standard , in which case the same version will appeal across customer profiles and can be sold through an external channel or a non-standardized product which needs to be tailored to the customer needs and for which the company needs to have direct contact with the customer.
• Amount of control required over the distribution channel – the distribution channel can be characterized by open communication and free-flow of information or, if there is a possibility of competition from the distributor, then a much more closed relationship.
• It is also important to take into account how long a healthy relationship will take to be established with the distributor as well as the length of the relationship as well; factors which contribute to the flexibility of the channel.

Functions of channels

Listed below are some of the purposes of a typical channel;

• A medium through which an organization can educate its chosen customer segments about the products and services it provides.
• Providing customers with an opportunity to study and evaluate the organizations value proposition.
• Providing customers with the facility to buy their chosen products or services.
• Providing the customer with the Value Proposition.
• Providing the customer with after sales services.

CHANNEL PHASES

There are five phases through which a channel passes. A channel can be covering more than one of these phases at a time.

Phase 1: Awareness

How do we educate customers about the characteristics of the products and services we have? This is the marketing and advertising phase. It is how you let your customer know about your value proposition.

Phase 2: Evaluation

How can we aid customers in evaluating our Value Proposition? This is the promotion or ‘Try me before you buy me’ phase. The customer will evaluate, read about or use your product and form an opinion about it. A good company will educate customers with other competitors in the market and help them to evaluate their choices. In this way, you make your value proposition clearer to them and why you are a better option than your competitors.

Phase 3: Purchase

How can we help customers in buying their preferred product or service? This is the sales process and denoted the dollars exchanged for a particular goods and services.

Phase 4: Delivery

How do we deliver the promised value proposition to the customer?  This is the fulfillment stage and defines how the product will reach the customer.

Phase 5: After Sales

How can we provide After Sales customer care and support? This phase creates Advocates for your products and services amongst your target segment. This stage provides a person for the customer to call when they have a problem or question about the product. The higher the value of the product, the more likely it is that he/ she will require After Sales support.

CHANNEL TYPES

This is the bridge between the customer and the company. There are different channel types .

Own Channels

A direct channel will include your sales force that would go after your customer segment and bring them in. A website is another direct channel that can be under the company’s control.

You may also have your store, however the customer must choose to go to the store and then you can sell to him/ her, but this will be indirect selling.

By employing your own channel, you will have a direct relationship with the customer, and you will have higher profit margins. However, you will require more investment to create the infrastructure to deliver your product to the market, and the production to market loop will be slower. Additionally partners leverage long established relationships with retailers that you will not have access to.

Partner Channels

This is an indirect channel . In this case, the company will not sell to the customer directly but through an intermediary.

The company can do this by placing their products or making their services available at the partner store.

Wholesalers are also partner channels. Wineries create partnerships with wholesalers in different countries to sell their wine to the end customer.

With a partner channel, there will be a lower margin on the product but it would get to the market quicker, and there will be lesser investment required in infrastructure.

Heineken delivers their beer to wholesalers, bars and shops, supermarkets as well as retail chains such as Gall and Gall, a retail chain of liquor with its distribution channels. Alternatively, Heineken also delivers to its network of bars to which it delivers directly. Hence, Heineken uses different Distribution channels to reach its customers.

Apple has its network of stores as well as premium resellers. They also sell their products through mobile networks, retail chains, and websites. Hence, there are different distribution channels in use at the same time with varying profitability. Their stores are extremely well-developed as well as experiential for any consumer that walks in. This may impact the profitability of the store, but it also allows Apple to communicate an entire experience to its consumer, and through this experience, establish a direct relationship with the customer.

ADVANTAGES & DISADVANTAGES OF ALTERNATIVE CHANNELS OF DISTRIBUTION

Direct distribution.

This can be done through personal selling, the internet, telephone or mail.

Personal Selling

In the case of personal selling, there is a lot of conveniences afforded to the customer including personal demonstration, home delivery, and satisfaction guarantees. The cost of a direct selling channel, especially if it is based on personal selling is low and can be easily afforded by an individual starting a business. Personal selling is a wonderful way to establish a strong relationship with the customer and gain insight into big customers’ preferences. The Return on Investment in personal selling is also higher, and the company can exert control over the brand image and positioning of the company.

However, if the organization is bigger, personal selling costs can be prohibitive. This particular distribution channel is also limited in its reach and creates too much dependence on people who may leave the organization and take their clients with them.

The Internet

The internet, on the other hand, provides a low-cost channel to target a wide customer base. It also provides convenience to customers in the form of instant access, ease of use and personalization. It is also a wonderful source of information for the customers is available 24/7 and gives them the chance to establish two-way communication with the company by letting them provide feedback and share preferences.

Conversely, the internet is an impersonal tool that does not allow the customer and the company to establish human contact. There is also the possibility of annoying customers by sending them too much spam. It also limits how the customer can directly interact with the product and requires an infrastructural investment. There is also a lack of after-sales service opportunities.

The telephone is an inexpensive ad efficient way to establish direct contact with the customer. It is also a good way to establish a relationship, create leads and reach customers in remote areas. On the other hand, the telephone, due to being outsourced to third world countries and used as a medium for marketing may seem intrusive and annoying to customers.

Mail / Email

Mail is another direct medium that is inexpensive and can reach a large audience. It is also easily customizable to different customer segments and allows for easy alteration. It is a wonderful way to create a brand image, communicate innovations or new products and foster good will. Again there are challenges with this medium such as the possibility that customers consider it junk mail or choose to never peruse its contents. This medium in general has low ROI.

Indirect Distribution

Indirect distribution can be carried out through retailers, agents/ brokers/ reps and distributors.

Retailers come with many positives such as already established infrastructures of stores, webpages, and aggressive marketing strategies. Retailers have their established brands that can provide a bolster to the already existing brand. There is also personal service and after sales services provided by the retailer, as well as a being a source of market and consumer intelligence.

This channel, however, leads to lower margins and loss of control. There is a disconnect from the end customer, and the retailer may be stocking competing brands side by side. This is a complex channel that can be expensive for a new business.

Agents and Brokers

Agents, brokers or reps provide personal selling and have established relationships with customers. They have a broad network, lesser distribution costs and are a source of market intelligence. They also assume the role of promoting the product, as well as share the burden of overhead costs.

Conversely, this channel is more sensitive to pricing, difficult to control and train. They may represent competing brands and maintain loyalty to the highest selling brand. This channel also means the company has less control over its brand image and no opportunity to establish a direct relationship with the client.

Distributors

Finally, distributors have a focused customer base, assume inventory risk, have a wider reach and are technically trained. However, they carry competing brands, have a say in the final pricing of your product and your company does not have control over the final look of the product to the customer. They also have low customer intelligence and represent an additional investment.

Google is the largest technological company in the world. Its main product is its search engine that is the most used search engine in today’s day and age.

Google employs two channels to deliver its value propositions to its customer segments. It has created Global Sales and Support teams as well as a Multi-product Sales force.

• For its individual customers, Google has a DIY approach with a high level of automation to make the process convenient and to appeal to the average Googler.
• Google’s Global Sales and Support team consists of specialized teams across industries that establish relationships with advertisers and network members and aid them in gaining maximum value from their relationship with Google .

Google’s sales force sells Search, Display and Mobile advertising and is focused on fostering relationships with major advertisers and premium internet companies.

Comments are closed.

Related posts

Financing Your Business through Venture Capital

In this article, we will start with 1) an introduction to venture capital and 2) venture capital …

What is Customer Satisfaction Score (CSAT)?

No matter in which industry you are working, your biggest concern must be customer satisfaction. …

408,000 + job opportunities

Not yet a member? Sign Up

join cleverism

Find your dream job. Get on promotion fasstrack and increase tour lifetime salary.

Post your jobs & get access to millions of ambitious, well-educated talents that are going the extra mile.

First name*

Company name*

Company Website*

E-mail (work)*

Login or Register

Password reset instructions will be sent to your E-mail.

The Business Model Canvas: Better Than a Business Plan [+ Free Templates]

Some links included here may be affiliate links, meaning we may earn a small monetary bonus from referring you to them. In no way does this increase the price you pay.

Do you have a great idea for a business or a new product/service but don’t know how to get started?

The business model canvas is an easy-to-use tool that can help you understand your idea and make it more concrete. It’s also a great way to talk about your idea with others, so they can give feedback on what works and what doesn’t.

The Business Model Canvas will help you identify the key components of your venture and map out the relationships between them. You’ll be able to see all aspects of your venture in one diagram—from customer segments, value propositions, channels, revenue streams, costs structures to team roles and organizational structure.

While it’s often used by startups, larger businesses, and more “refined” companies, this honestly is a great tool, no matter how large or small your company is.

I’ve created a free toolkit that includes a business model canvas template and more helpful tools. You can grab it below:

In June I was accepted into a business coaching/learning program called “Power Up Your Business.” It’s sponsored by a local community college and essentially they teach you the framework for a powerful business, along with offering business coaching, working on tactical business plans, and more.

I had heard of this before, and even tried to use it for a “business” I was going to run about 4 years ago ( which clearly didn’t go anywhere).

When I previously used the canvas, I was really confused on everything and I kind of just put it to the side and never thought about it again. So when I heard the topic for the day I wasn’t wildly impressed. I was thinking it wasn’t worthwhile, and was just another “exercise” some trainers and professors make you do.

But this class was one of those times where you go from “yeah, I already know this” to “holy crap, I have a LOT of work to do.”

I felt energized and excited, and THAT NIGHT I went home and was thinking about this before bed. This led to an episode of entrepreneurial insomnia , and I woke up at 3am with my mind RACING about all kinds of ideas for my business.

I actually started a new note on my phone, wrote down everything that came to mind, and by the time I got done it was quite long!

I got out of bed around 5am and filled out an entirely new business canvas for a pivot I was going to be making in my business.

This exercise gave me so much clarity on how I’m going to be moving forward, so I had to share it with you.

What is the Business Model Canvas?

The Business Model Canvas was created by Alexander Osterwalder, and is a strategic management and entrepreneurial tool used to capture the essence of your new venture. It will help you determine if you are on the right path, saving valuable time, energy, and resources in the process. This tool helps entrepreneurs build businesses that can evolve over time with ease.

In short, the Business Model Canvas is a way to quickly put together a business plan without the need for writing a traditional 80-page business plan detailing every aspect of a business you have yet to create.

It’s a method that allows you to quickly iterate and make changes to the plan without having to start a new business plan.

A lot of you might be thinking:

“But Chenell, I just run a [blog, website, ecommerce store, freelancing business, etc] why would I need something like this?”

I’d say if you’re asking the question of whether or not you need to complete this exercise, that you probably need it more than you think.

Having a plan and strategy for going into business and knowing who your customers are and how you can help them is CRITICAL to success.

This tool is used as a template for lean startups and as a strategic management tool.

The 9 Blocks of the Business Model Canvas

If you’ve been following along, I put together a post about each of these throughout the last week or so.

If you look at the canvas as a whole,  the right half of the canvas is essentially the “front of the house” stuff, like what kind of customers you’re helping, how you keep them as customers, etc.

The left half of the canvas is like the “back of the house” where you’re focusing on the activities you are doing in the business, what resources you need, who your key partners are, etc.

Both sides meet in the middle at your value propositions,  which are essentially what kind of offering you have for your clients and customers.

There are nine blocks that make up a business model canvas.

1. Customer Segments

Who are your customers? Who are you creating value for?

This section is about figuring out who you are going to provide value for. In this block of the canvas, fill in characteristics of the people you are targeting.

I know you’ve heard all about determining your niche, and choosing your avatar for your business. This is building upon those exercises.

A customer segment is a group of people (or businesses if you’re a B2B company) that you are looking to sell your products and services to.  It’s essentially the common characteristics your target market has that will allow you to find and market to them more easily.

2. Customer Relationships

How do you get, keep and grow/upsell customers? How do you interact with your current and potential customers? What type of relationship do they expect from working with you?

Customer Acquisition

How are you getting new customers ? This could be anything from email marketing to search engine optimization (SEO) to going out and doing direct sales.

Think about the methods you are going to use to attract the right people to your business. Where are your customers currently hanging out? Are they on Facebook, or are they lingering in an industry-specific forum asking questions?

Customer Retention

Acquiring customers can be challenging, and it’s always easier to sell again to a current customer than to get a new one. How are you going to keep your customers around?

Are you going to mail out postcards for special occasions, have monthly check-in calls, or just surprise and delight them with free stuff? Maybe you’re promoting your customers on social media, whatever it is, take note of it.

Grab the Business Model Canvas Toolkit to more easily follow along. This includes a PDF template of the canvas, along with a step-by-step guide to completing your own canvas:

3. Channels

How do you deliver your product or service? Is it B2B, B2C? How are you reaching your customers and prospects?

There are a few phases of channels to keep in mind:

• Awareness  – these channels could be search engines, social media, etc.
• Evaluation  – Your website, review sites, and again social and search
• Purchase  – Merchant accounts, invoicing platforms, your website
• Delivering Value Proposition – postage or mail, email providers, systems you use to deliver the product or service. Are you going to be delivering value with an online course , consulting and coaching, or do you have a “done for you” kind of offering?
• Post-Purchase Support – your email newsletter, chat platforms, content marketing, and customer service reps.

4. Value Proposition & the Value Proposition Canvas

“A value proposition is a promise of value to be delivered, communicated, and acknowledged . It is also a belief from the customer about how value (benefit) will be delivered, experienced and acquired.” – Wikipedia

What value do you deliver to the customer? Which problem(s) are we helping to solve for the customer?

This is one of the more important exercises to do because if you don’t know what you’re providing and to who, you’re going to fall down a lot more than you need to.

It’s so important, that half of the business model canvas is actually called the value proposition canvas (I know, ALL of the canvases!).

Pause here, and go figure out your value proposition.

5. Key Activities

What do you need to do well to make money? What kind of activities do you need to do to provide that value to the customer?

How exactly are you going to provide value and what kinds of activities need to happen in order for your customer to get what they expected?

As we determined in the value proposition phase, there are certain things customers are going to expect from your business. The key activities block of the canvas helps us figure out what those are and what we should be paying attention to that might not necessarily drive value.

6. Key Resources

What key resources do you need to deliver that value proposition?

Key Resources are the important things your business needs to build out the value proposition you promise customers.  Without these resources, you wouldn’t be able to deliver value, and you wouldn’t have a business to build a business model canvas for.

There are four types of key resources: financial, intellectual, human and physical. These can be things like machinery, systems and processes, patents, salespeople, credit cards, and business loans.

7. Key Partners

This piece of the canvas can get a little confusing once you read through all the types of partnerships there are. But if you take a really granular look, these strategic partnerships can be as simple as a virtual assistant (VA) you’re going to hire, or someone you are going to get into an affiliate relationship with.

Having a partner can be as easy as referring customers to each other.  Or it can be as complicated as two businesses creating a third company together because they found a need in the market and can each contribute a piece of that new pie.

Partnerships are one of the essential building blocks of the business model canvas, and for any business. It’s almost impossible to have a business that provides value for its customer and doesn’t require some kind of partner.

Essentially, we are answering these questions: who is going to help you deliver on that value proposition? A business can’t be all things to all people, so what kind of partnerships do you need to deliver the best service?

8. Cost Structure

This piece is where we should be looking at your fixed costs and variable expenses. But also looking at whether you’re going to be a cost-driven or value-driven business. In short, this means  are you going to be focused on providing the lowest cost solution, or will you be focused on providing value and not worry so much about low costs.

There are a few types of cost structures, including cost-driven, value-driven, fixed costs, variable costs, etc.

What the major cost drivers for the business? Include key resources and key activities in this. What type of cost structure are you going to be using?

9. Revenue Streams

How is the business earning revenue from customers and delivering the value proposition?

There are a few main types of revenue streams (these are not exclusive):

• Subscription fees  – i.e. Netflix
• Fees for usage – i.e. cell phone companies
• Selling assets  – i.e. Amazon
• Lending/renting/leasing  – i.e. Airbnb, Zipcar, Turo
• Licensing  – photography and music
• Brokerage   fees  – i.e. real estate brokers
• Advertising  – i.e. Google Adsense or partnerships

When to Use the Business Model Canvas

The Canvas can be viewed as a one-page business plan, that can be easily updated. I think it’s extremely helpful for these business situations:

When you’re launching a new product or service.

Sure, it may seem as easy as saying, I’m going to start selling bread at my pastry shop. But then you dig deeper by filling out the canvas and realize you’re going to need new ovens, new employees (or at the very least  extensive training for current employees), new marketing strategies, a different managerial schedule (baking usually happens in the wee hours of the morning), and on, and on.

When you’re starting a new business (or blog!)

Many of us have literally “fallen into” entrepreneurship because we had a skill people wanted to pay us for, and we just started selling it without thinking strategically. It’s time to take a step back and get that clarity you’re missing. This will take a few hours out of your day, but it will add so much relief to your life, trust me!

When you need clarity on your current business (this was me!) and don’t have a serious business plan in place.

Similar to the one above, I fell into offering marketing services because the people around me needed help. I knew nothing about running a business, and have just been guessing my way through most of it. Not anymore!

When you want to compare a few different ideas for a new business, service, or product to sell.

This one is so critical! We always have a million ideas running around in our heads, why not narrow it down to the 2 or 3 we are most excited about and really dive deep into those ideas? Do we have a strong business model? Do people actually need what we are offering? Can we actually make a living from this?

Leave a Comment Cancel reply

Join 3,000+ freelancers & solopreneurs.

Each week I send out the best tips and hacks to help you grow your business and get paid to do the work you love.

As an Amazon Associate, I earn from qualifying purchases.

©2024 Hustle to Startup. All Rights Reserved.

Mobile Menu

• Skip to primary navigation
• Skip to main content
• Skip to primary sidebar
• Skip to footer

HDD & More from Me

The 20 Minute Business Plan: Business Model Canvas Made Easy

Table of Contents

What’s the Business Model Canvas?

How do you get started, why use the business model canvas, when should you use the business model canvas, how do you use the canvas to facilitate alignment and focus, step 1 (of 10): customer segments, step 2 (of 10): value propositions, step 3 (of 10): channels, step 4 (of 10): customer relationships, step 5 (of 10): revenue streams, step 6 (of 10): key activities, step 7 (of 10): key resources, step 8 (of 10): key partnerships, step 9 (of 10): cost structure, step 10 (of 10): applications, analysis & next steps, example a: enable quiz (startup), example b: hvac in a hurry (enterprise), using the google doc’s/powerpoint template.

If you’re already familiar, you can skip to the next section, ‘ How do I get started ?’.

The Business Model Canvas (BMC) gives you the structure of a business plan without the overhead and the improvisation of a ‘back of the napkin’ sketch without  the fuzziness (and coffee rings).

Together these elements provide a pretty coherent view of a business’ key drivers–

• Customer Segments : Who are the customers? What do they think? See? Feel? Do?
• Value Propositions : What’s compelling about the proposition? Why do customers buy, use?
• Channels : How are these propositions promoted, sold and delivered? Why? Is it working?
• Customer Relationships : How do you interact with the customer through their ‘journey’?
• Revenue Streams : How does the business earn revenue from the value propositions?
• Key Activities : What uniquely strategic things does the business do to deliver its proposition?
• Key Resources : What unique strategic assets must the business have to compete?
• Key Partnerships : What can the company not do so it can focus on its Key Activities?
• Cost Structure : What are the business’ major cost drivers? How are they linked to revenue?

The Canvas is popular with entrepreneurs and intrapreneurs for business model innovation. Fundamentally, it delivers three things:

• Focus : Stripping away the 40+ pages of ‘stuff’ in a traditional business plan, I’ve seen users of the BMC improve their clarify and focus on what’s driving the business (and what’s non-core and getting in the way).
• Flexibility : It’s easier to facilitate alignment by tweaking the model and trying things (from a planning perspective) with something that’s sitting on a single page.
• Transparency: Your team will have a much easier time understanding your business model and be much more likely to buy in to your vision when it’s laid out on a single page.

The first time you engage with the canvas, I recommend printing it out or projecting it on a whiteboard and going to town (see below for a PDF). However, if you’re ready to put together something a little more formal (for distribution, presentation, etc.) here’s a Google App’s template you can copy or download as MSFT PowerPoint:

*Omnigraffle a popular diagramming program for the Mac. It has a fairly easy to use layering environment which you may find handy as you want to tinker with and produce different views of the canvas. You can try Omnigraffle for free (the basic paid version is $99).

The short answer is this: because it’s simple yet focused and that means more of your audience is likely to pay attention to it. Also, it’s highly amenable to change on the margins.

This matters a lot- more than most people think. A company that wants to innovate has to be ready to be wrong . A good VC in early stage investments succeeds with a prevalence of something like a 1/10. If you think you’re doing a lot better than that with substantial new innovation investments (a startup or a new line of business inside an enterprise) you’re probably throwing good money after bad.

Transparency, simplicity, and focus are great facilitators of the ‘creative destruction’ a good innovation program needs, and the Canvas does a nice job of delivering that across lines of business. For a large corporation with multiple lines of business at various levels of maturity, I actually prefer the Corporate Innovation Canvas as a starting point. However, from there, the Business Model Canvas does an excellent job of bringing clarity to the questions of how, for example, a given line of business creates focus and then implements it in an innovation-friendly way with, for example, ‘objectives and key results’ OKR’s . It’s a central element in the ‘innovation stack’ where an enterprise is able to go from priority innovation areas (with the Corporate Innovation Canvas) to testable business model designs (with the Business Model Canvas) to product charters (with an agile team charter ) to individual learning pathways to cultivate the talent they need to execute.

Even more important than the top down cascading of objectives with testable results and KPI’s is the improvement in the feedback in outcomes that helps the overall innovation program learn and adapt quickly. With layer appropriate innovation metrics, it’s much easier for the achievements of individuals to cohere (or not) to the job of teams and in turn from there to lines of business back up to corporate objectives. This helps both help the company’s talent understand where they might benefit from more practice and learning as well as what constitutes success in their individual roles and collaborations.

Anytime you want to have a focused discussion about what matters to a given line of business, the Business Model Canvas is a good place to start. The Canvas has received a lot of attention as a tool for startup entrepreneurship. While this may be one of the ‘sexier’ and more ostensibly simple applications of the Canvas, I actually think it’s one of the least compelling. For a startup, the only thing that matters is product/market fit, which the Canvas represents as a set of relationships between Customer Segments and Value Propositions. The Canvas doesn’t do a bad job of describing this, but it’s kind of overkill- the whole left side of the Canvas which describes the delivery infrastructure is mostly irrelevant for startups that are still finding product market fit, since all that’s provisional about where (and whether) they arrive at product/market fit.

Where the Canvas really shines is describing an existing line of business to answer questions like: a) What does product/market fit mean for this business? b) Where have we focused our company building and is it still relevant to ‘a’? c) What are our key revenue, cost, and profit drivers, and how do we improve those?

Now we’re taking! Whether you’re an ‘intrapreneur’ exploring a new extension to the business or a ‘digital transformation’/IT consultant trying to facilitate a discussion about what ‘strategic IT’ means and how you’ll know if you achieve it, the Canvas is a quick and productive place to anchor such a discussion.

First and foremost, I’d try it out for yourself. Fill out the elements the business you’re working on and then ask yourself ‘Does this make sense?’ ‘What are the most important linkages and components of the model?’

From there, you may just want to use the Canvas you sketch to facilitate alignment on some other topic. However, if you’re working with a team on a new venture or with a client on a new project, you may then want to take it from the top and facilitate a workshop where you facilitate a fresh take on the Canvas, levering your experience thinking through it once. The link below will take you to a related curriculum item that has workshop slides, prep. items, and agenda.

LINK TO WORKSHOP PAGE

Otherwise, the next sections (10 steps) offer a tutorial on how to think through a business model design with the Canvas. The closing sections offer notes on how to use the Google Doc’s/PowerPoint and Omnigraffle templates.

Output : a list of Personas, organized by Customer Segment if you have more than one segment. I recommend trying to prioritize them- Who would you pitch first if you could only pitch one? Who next? And so forth…

Notes : If you’re spending a lot of time on this first item, that’s OK (and it’s probably good). The Canvas is a tool, not a strategy and not all the nine blocks are equal. The pairing of Customer Segments and Value Propositions is really the ‘independent variable’ that should be driving everything else in your business model. When I use the Canvas in my Venture Design classes, we usually spend all of the first session (plus time for field research) on Customer Segments and Value Propositions.

For example, at Leonid, an enterprise software company I founded, we thought our largest customers worked with us because of the cost savings we offered and our knowledge about best practices. It turned out that was mostly wrong- reducing their time and risk to get new services to market was the most important. It’s not that the other things weren’t important, but they weren’t the top Value Proposition. That made a difference on how we sold the product and how we focused on operationalizing it for customers.

This mapping says ‘We have 3 personas. Persona 1 cares about VP 1 & 2. Persona 2 cares about VP 2; Persona 3 cares about VP3. (One segment only so segments not noted)’.

Output : a prioritized list of Value Propositions and linkages from each Personas to the VP’s relevant to them.

Notes: Again, this pairing is the key driver for most business models and if you want more on how to describe and discovery what to put in this part of the canvas, I recommend this: Tutorial- Personas .

Maybe you feel like you’re in good shape on understanding the customer’s world but you don’t have any validation on whether the Value Propositions are clicking because this is a new venture? If you’re not sure, that’s OK and good for you for acknowledging the uncertainty! It’s the responsible thing to do. The key is to write down those assumptions, prioritize them, and figure out the quickest and cheapest way to prove or disprove them. That’s what Lean/Startup is about and there are resources here to help you with that, if you’d like- Tutorial: Lean Startup .

Channels includes entities you use to communicate your proposition to your segments, as well as entities through which you sell product and later service customers (see AIDAOR journey below). For example, if you sell bulbs for light houses and there’s a website all light house attendants purchase equipment, that site is a sales Channel. If you use Google AdWords, that’s a Channel, too (for getting attention). If you use a third party company to service the bulbs when they break, that’s also a Channel.

Output : a list of important Channels, linked to Personas or Segments if they differ substantially. Make notes on what steps are relevant for each- promotion, sales, service, etc. See Note this section for more structure on this.

Notes: Channels and the next item, Customer Relationships, define your interface with the Customer. It’s important to think all the way through the customer ‘journey’ in specific terms. For most businesses, the way they get a customer’s attention is different than the way they onboard them or support them over the long term. For this, I recommend the AIDA.OR framework (attention-interest-desire-action-onboarding-retention) and storyboarding your way through it. Here’s a post explaining all that- Storyboarding AIDA(OR) . If you don’t want to do the storyboards, I recommend at least making notes about your customer journey through the AIDA(OR) steps.

Another consideration is whether your channels will give you enough visibility into the user, including, for example, a way to follow up with users. Not sure? Document your assumptions Lean Startup style and figure out how you’ll quickly prove or disprove them.

Output : a description of Customer Relationships, with notes if they differ across Customers (between Segments or among Personas within a Segment) or across the customer journey.

Notes: If you’re a startup, be sure to document and review critical assumptions here. Also, the focal items are in a kind of specific order- you should validate your Segments and their relationship to the Propositions above all else. If this means you provide personal support in the early days (a ‘concierge test’ in Lean Startup terms) to do discovery and validation of Segments and Propositions, that’s OK. You can subsequently test the Customer Relationship models. (Here’s a post on using consulting as a concierge vehicle in B2B if you want more detail: Consulting as B2B Concierge Vehicle ).

Notes : If you have a startup or are re-engineering the business, this is a time to look at where you’re driving revenue and whether it aligns with the rest of your focal points. Are you charging on value? Perceived value? They say everyone loves their banker; hates their lawyer. Why is that? Is there an actionable analog in your business?

For a product-driven business, this probably includes ongoing learning about users and new techniques to build better product. If you’re focused on doing a bunch of things for a particular set of customers (ex: comprehensive IT for law offices), this probably includes maintaining superior expertise on the segment(s) and creating or acquiring products and services that are a good fit, whatever that entails. For an infrastructure business (ex: electric utility), it probably includes keeping the infrastructure working reliably and making it more efficient.

Outputs : a list of Key Activities linked to your business’ Value Propositions.

Notes : One question this analysis should raise for you is whether or not certain Activities and Resources are actually core, actually focal to your business, something you’ll want to think through .

Outputs : a list of Key Resources linked to your business’ Key Activities.

Notes : Product-driven businesses have a differentiated product of some sort. Rovio, the company that makes the popular app Angry Birds, is such a company. Key Resources in product-driven businesses are typically key talent in critical areas of expertise and accumulated intellectual property related to their offering.

Scope-driven businesses create some synergy around a particular Customer Segment. For example, if you started a business that would take care of all the IT needs for law firms, that would be a scope-driven business. These businesses typically have key knowledge about their segment, a repeatable set of processes, and sometimes infrastructure, like service centers.

Infrastructure-driven businesses achieve economies of scale in a specific, highly repeatable area. Telecommunications is traditionally an infrastructure business. Retailers focused on retail, like Walgreens or Costco, are primarily infrastructure-driven businesses. The Key Resources for this type of business are, you guessed it, various types of physical or virtual infrastructure.

Let’s take a single product category: diapers. The Honest Company or another innovating around compostable or otherwise more environmentally friendly diapers would be a product-driven take on the category. Procter & Gamble which has a cradle-to-grave strategy for providing consumer products is a scope-based take; so are various baby-focused retailers. Kimberly-Clark (wood pulp) or DuPont (chemicals and polymers) are both infrastructure-based takes: diapers is just another way to sell something they produce at scale with relatively little differentiation.

If there are major cost components that don’t map to a Key Activity, I’d take a closer look at those costs.

Output : a list of Cost Structure elements with notes on their relationship to Key Activities.

Congratulations- you have a working canvas! The section below offers a few analytical ideas and suggestions for next steps.

Core Applications The most core and obvious applications of the Canvas are to ask: – Does it make sense? – Could it be better? – Does the rest of my team understand and agree? Have additional ideas? – (rinse and repeat at least quarterly)

Competitiveness The canvas does a good job of helping you figure out your business, which is a good place to start. You also want to look at the competitive environment and think about if and how you have/maintain a long term competitive advantage.

For this, I like Michael Porter’s Five Forces framework ( Wikipedia Page ; see also Chapter 2 of ‘ Starting a Tech Business ‘). Try walking through the Five Forces for your company and then bounce back to your canvas. How does it all hang together?

Next Steps Every business is a work in progress (sorry, I try to avoid saying things like that but it seemed to fit here). As you go through the canvas, you may encounter areas that give you trouble. The table below summarizes a few of the most common that I see in my work as a mentor and coach:

Want to make innovation an everyday thing?

What is Enable Quiz?

Enable Quiz is a (fictional) startup that’s building a lightweight quizzing application for companies that hire a lot of technical talent (engineers). Their take is:

For hiring managers who need to evaluate technical talent, Enable Quiz is a talent assessment system that allows for quick and easy assessment of topical understanding in key engineering topics. Unlike formal certifications or ad hoc questions, our product allows for lightweight but consistent assessments of technical talent.

Why and how would Enable Quiz use the Business Model Canvas?

They have a small team, but arriving at a clear, shared understanding of what they’re after is still important. That said, it’s important that the way they talk about this is both highly visible and amenable to change. Given that, the Canvas is a good fit.

The Business Model Canvas at Enable Quiz

This page shows Enable Quiz’s current working view of product/market fit:

What is HVAC in a Hurry?

HVAC in a Hurry is a mid-sized enterprise that services commercial HVAC (heating, ventilation, and air conditioning) systems. Their take on the business is:

For facilities managers & business owners who need their heating & cooling systems managed and repaired, HVAC in a Hurry is a full service provider that allows for easy and responsible management of a business’ HVAC systems. Unlike smaller firms, our commitment to best practices and training allows customers to worry less and realize superior total cost of ownership for their HVAC systems.

Why and how would HVAC in a Hurry use the Business Model Canvas?

HVAC in a Hurry has a working version of product/market fit. However, their industry is competitive and successful firms increasingly use technology to improve customer experience (CX) and reduce cost (overhead) in their operations. HVAC in a Hurry has a small ‘digital transformation’ team that’s working on digital applications to improve the company’s performance. This team decided to use the Canvas to ‘manage upwards’ in order to facilitate better discussions about where they should focus, how that aligns with the business as a whole, and what success definition makes sense for them.

The Business Model Canvas at HVAC in a Hurry

Here’s their current view of product/market fit:

If you’re not familiar with it, Google Doc’s is a web-based office suite, similar to MS Office. If you have a gmail account, you can access it (no guarantees- that was the case last time I checked).

First, you’ll want to link to the template file: BUSINESS MODEL CANVAS TEMPLATE IN GOOGLE DOC’S .

Once you’re accessed the file, you can make make it your own by going to the File menu and either ‘Make a copy…’, creating a copy in your own Google App’s domain or you can use the ‘Download as…’ option to download it as PowerPoint (and a few other formats).

What’s your experience with the Canvas? How have you used it? What worked? What didn’t? Please consider posting a comment!

Copyright © 2022 Alex Cowan · All rights reserved.

The Alabama Cooperative Extension System operates as the primary outreach organization that ensures all people have access to information that improves their quality of life and economic well-being.

• 0 bookmarks 0

Urban Extension

• March 10, 2022
• Posted by: Jon Jacobson
• in Urban Extension
•     Print

Do you have a business idea, but don’t know how to get started? The Business Model Canvas (BMC) can help you organize your thoughts and get a clear picture of where to begin. Let’s explore various segments of the BMC.

Value Proposition

The value proposition is the heart of what your business provides to customers. A strong value proposition explains the value you provide to your customers, how your business is different from competitors, and how your business solves a customer’s problem. You want your value proposition to be targeted, clear, and unique.

The Right Side of the Canvas

The right side of the canvas includes customer segments, customer relationships, and channels that impact your revenue streams (business sales).

• Customer segments: Who are your most important customers? Why will they buy from you and how does your value proposition support those reasons?
• Customer relationships: How will you create and maintain strong relationships with your customers? What keeps your customers coming back?
• Channels: How can you most effectively connect with your customers? What sales channels work best for your customer segments?

The Left Side of the Canvas

This includes key activities, resources, and partners necessary to the success of your business. These sections will impact your cost structure.

• Key activities: What do you do daily that supports your business’s value proposition? Which activities are vital to business success through customer acquisitions and retention?
• Key resources: What resources (human, financial, intellectual, and technological) does your business require to support its value proposition? What is your business’s most important resource?
• Key partners: Who do you work with to create your business’s value? What do they provide? Could your business function without them, if necessary?

Revenue Streams

• What would your customers pay for the value you put into your product or service?
• What are your primary sources of sales or revenue?
• How can you add additional revenue streams to your business?
• What are the most important costs to operating your business?
• Which key resources & activities are most expensive to your business? Are they necessary to success?
• How can you cut costs?

Business Resources

The BMC template can be used as a continuous, living document that changes and adjusts as your business idea grows. You can access a blank Business Model Canvas from Alabama Extension to complete at your leisure.

Alabama Extension offers the Business Model Canvas for Beginners class that can help individuals work through the different sections and ask questions about their business. We also offer a complete business building block series that teaches these concepts in greater detail and allows you to further explore the viability of your business idea.

In addition, one-on-one coaching and resources are available from the community resource development team as follows:

• H aley Burns , CRD Specialist, Statewide Phone: 256-372-4966 / Cell: 256-836-0917
• Jon Jacobson , Urban Regional Extension Agent , Jefferson & Tuscaloosa counties Phone: 205-325-5342 / Cell: 256-714-9142
• Juani Christian , Urban Regional Extension Agent, Marshall & DeKalb Counties Phone: 256-582-2009 / Cell: 256-572-0241
• business and community
• business idea
• Business Model Canvas
• business tools
• entrepreneurship

This website uses cookies to collect information to improve your browsing experience. Please review our  Privacy Statement  for more information.

Teaching Entrepreneurship

Experiences teach skills..

Teaching the Business Model Canvas: Part 1 – Intro

October 4, 2021 doan winkel comments 3 comments.

When we ran a workshop with Dr. Alex Osterwalder about how he teaches his Business Model Canvas, attendees were so excited about what he was sharing, 98% of them voted to change our schedule on the fly and extend his session from 60 to 90 minutes.

The exercises he was sharing were too engaging to let him stop.

In this article, the first in a 3-part series, we’ll structure Osterwalder’s exercises into easy-to-implement lesson plans you can use with your students.

Exercise #1: Business Model Matching

To introduce students to the 9 components of the BMC, Dr. Osterwalder starts by giving students a set of business model hypotheses and asking them to place each one in the appropriate box of the BMC.

Prepping Before Class

To make the most efficient use of class time, assign students to watch these videos before class:

• Getting from Business Idea to Business Model
• Visualizing Your Business Model
• 9 Steps to Creating a Successful Business Model

Then you’ll want to print out the worksheets linked in the lesson plan below. Digital worksheets are also in the lesson plan if you’re teaching remotely.

Step 1: Fill the Boxes

Alex uses Airbnb in his first exercise because:

• Students are familiar with Airbnb
• As a two-sided marketplace, Airbnb is a great example of how one business model may need to fulfill the needs of multiple customer segments to be successful

Starting with the “Airbnb BMC: Travelers” worksheet, ask students to write each of the provided business model hypotheses in their appropriate boxes:

Copies of this worksheet are available in the lesson plan below.

We recommend each student complete this individually. While students will work in pairs for the next step, to help increase engagement and discussion, we like using Think. Pair. Share. with this type of exercise, which starts by having students work on their own.

Step 2: Pair

Next, ask students to pair up (if necessary, create breakout rooms for virtual students), and compare their answers. If there’s anything they disagree on, ask them to try to discuss and come to a consensus.

Note: this is an important part of the Think. Pair. Share. process. Talking with a peer helps them organize their thoughts better and practice vocalizing them. If your students are reluctant to speak in class, pairing students up like this before asking for a class-wide discussion can help inspire more interaction.

Step 3: Share

Reconvene the class. Go one by one through the boxes and ask a pair to share what they wrote for a particular box. Go through each of the boxes in this order:

• Customer Segments
• Value Proposition
• Customer Relationship
• Revenue Streams
• Cost Structure
• Key Activities
• Key Resources
• Key Partners

Ask a new pair to report out what they wrote for each box and then ask the rest of the class if they had anything else different for that box. If student pairs disagree on what should be in a particular box, use that as an opportunity to increase discussion and, before you reveal the correct answer, have your students vote on which answer they think will be right.

Slides with the correct answers, like the one above, are available in the lesson plan below.

Step 4: Repeat with Airbnb Hosts

Now ask students to fill out the AirBnB BMC: Hosts worksheet using the same Think-Pair-Share technique. 

Take time to explain that many businesses don’t have just one business model as a part of their success. Instead, many businesses, like Airbnb, are a multi-sided market. In this business model, the needs of two parties must be met.

You can highlight the popularity of this business model by pointing out that Uber, Doordash, Amazon all have this multi-sided market where the business has to keep multiple customers happy.

Summary & Next Steps

Alex prefers simple matching exercises like these as a quick way to introduce the BMC. For more details on how to use it, including worksheets and slides, check out the free lesson plan below.

Next up, Alex provides students with BMCs that are partially filled out and asks students to fill in the rest – which we’ll detail in the next article in this series! We’ll share two more steps in the process Dr. Osterwalder uses to teach the business model canvas:

• How to use fill in the blank exercises to help students create their own canvases
• How to use prioritization exercises to teach how to use the BMC to test business model assumptions

Want More from Dr. Osterwalder?

Find more about Alex’s work at Strategyzer.com .

Watch Alex Teach

If you’d like to see Alex teach the Business Model Canvas himself, just enter your email below to watch his full workshop on Teaching the BMC:

Get the Teaching the Business Model Canvas Lesson Plan

We’ve created a detailed lesson plan for the “Teaching the Business Model Canvas: Part 1” exercise to walk you and your students through the process step-by-step.

Read Part 2 In This Series of Teaching the Business Model Canvas

Check out the second post in this series, focused on using a fill-in-the-blank exercise to help students develop their own hypotheses.

What’s Next?

In upcoming posts, we will share two more steps in the process Dr. Osterwalder uses to teach the business model canvas.

Subscribe here to be the first to get these in your inbox.

Join 15,000+ instructors. Get new exercises via email!

Enter Your Teaching Email:

Missed Our Recent Articles?

Whether you are new to our community of entrepreneurship educators, or you’ve been contributing for years, we wanted to give you a list of the posts our community finds most valuable:

• Improving Your (Inherited) Course. Inheriting an entrepreneurship course presents many challenges. Re-design the course and provide engaging experiences with this curriculum.
• How to Improve Student Outcomes & Evaluations. Journaling can transform your students’ experience in your classroom. And can be a great way to get quality feedback on whether you’re an effective educator
• “The best class I’ve taken!”   We all want a Dead Poets Society moment in our entrepreneurship class. One professor using the Experiential Entrepreneurship Curriculum got hers!
• Teaching Customer Interviewing.  This card and the online game is a powerful way to teach students the importance of customer interviewing, and the right questions to ask.

Want 30+ more engaging exercises?

3 thoughts on “ teaching the business model canvas: part 1 – intro ”.

Hi I would like to teach entrepreneurship to youth from grade 6-12. I am an entrepreneur myself and want to teach learners as an after school activity. I am looking for guidance on how to accomplish this in South Africa, a country where the overall unemployment is 60%. Please can you assist me. I thank you in advance.

Canvas: Es una buen técnica para simplificar al emprendedor en su proceso de aprendizaje a convertirse en un empresario de éxito

• Pingback: Classroom Tools Archives – Teaching Entrepreneurship – AI in Higher Education – Automated Curation Project

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Get a copy of the  lesson plan on Google Docs:

Or you can just view it here .

Item added to your cart

Business model canvas for a mobile app (examples).

Get a watermark-free, fully customizable business model canvas in our business plan for a mobile app

In the dynamic realm of mobile app development, having a clear and effective strategy is crucial for success.

Here's your detailed roadmap to mastering the Business Model Canvas framework, designed with mobile app entrepreneurs in mind.

This piece deconstructs the methodology into manageable chunks, enabling you to pinpoint your app's unique value proposition, target user demographics, essential operations, and much more.

And, if you're looking for a ready-to-use Business Model Canvas that's fully customizable, be sure to explore our business plan template crafted for mobile app ventures .

What is a Business Model Canvas? Should you make one for your mobile app development project?

A Business Model Canvas is a strategic tool designed to help you map out the key components of your mobile app business. It's a visual framework that lays out how you plan to create, deliver, and capture value with your app.

Think of it as a blueprint that captures your app's unique value proposition, the infrastructure required to operate, the customers you aim to serve, and the financial aspects of your business.

In the context of a mobile app, the Business Model Canvas helps you to articulate how your app solves a problem or fulfills a need for your users, how it stands out in the crowded app marketplace, and how it will be monetarily sustainable.

Why do people create a Business Model Canvas for their mobile app? It's simple. This tool enables you to get a holistic view of your business strategy on a single page. It's about understanding your customer segments, the channels through which you'll reach them, your revenue streams, and more.

For a mobile app, this might include detailing your app's core features, your user acquisition strategies, your monetization model, and your cost structure, among other elements.

The benefits are clear-cut.

Firstly, it promotes strategic thinking and helps you prioritize the key actions needed to launch and grow your app. It can uncover potential obstacles or opportunities early on, allowing you to pivot or refine your approach before you invest too much time or money.

For example, you might discover that your app's proposed features are too broad, and a more niche focus would better serve a specific target audience. This insight could be invaluable.

Should you create one if you're starting a new mobile app project? Definitely.

It's an essential part of the planning process that can steer your decisions and strategies. It enables you to clearly communicate your vision to potential investors, partners, or team members. A well-thought-out Business Model Canvas, similar to what you can create using our tailored business plan template for mobile apps , can transform a mere idea into a well-planned business venture.

Is it useful for you? Without a doubt, especially if you're aiming to establish a clear strategy for your mobile app. It compels you to systematically work through your business model and assess the viability of your app concept.

Moreover, it's a dynamic document that you can modify as your app evolves or as the market landscape shifts.

How to create a Business Model Canvas for your mobile app development project?

Creating a Business Model Canvas for your mobile app should be straightforward.

You can simply modify the one we have already crafted and filled in our business plan template tailored for mobile apps .

Need more details? Let's dive into each section of the canvas, and we'll guide you on how to complete it with ideas and insights, using a clear and concise approach.

Value Proposition

Let's start with the Value Proposition.

This is the core of your mobile app. What problem does your app solve? Is it the convenience, the unique features, or perhaps the user experience?

Consider what will make users download your app instead of others. It could be a novel way of connecting people, a game-changing productivity tool, or an app that simplifies a complex task.

Customer Segments

Moving on to Customer Segments.

Who will use your app? Are you targeting busy professionals, students, fitness enthusiasts, or a niche market?

Understanding your target users will influence your app's design, functionality, and marketing approach.

Now, let's look at Channels.

How will you reach your users? This might include app stores, social media marketing, influencer partnerships, and content marketing.

Think about optimizing your app store presence with SEO, using targeted ads to reach potential users, and leveraging reviews and ratings to gain visibility.

Customer Relationships

Customer Relationships focus on how you engage with your users and foster loyalty.

Consider in-app support, user communities, and regular updates based on user feedback to keep your users engaged.

How can you use push notifications or email marketing to keep your app top-of-mind? Think about ways to personalize the user experience to create a stronger connection.

Revenue Streams

In the Revenue Streams section, you'll define how your app will generate income.

This could be through in-app purchases, subscription models, ads, or premium features. Think about what monetization strategy aligns with your user experience and business goals.

Key Activities

On the flip side, we have Key Activities.

These are the critical actions required to make your app successful. This includes app development, maintaining and updating the app, marketing, and customer support.

Identify the activities that are essential to delivering your value proposition and consider how to perform them effectively.

Key Resources

Key Resources are the assets vital to your app's success.

This includes your development team, technology stack, intellectual property, and user data. Reflect on what you need to build and maintain your app and how you can secure these resources.

Key Partnerships

Key Partnerships might involve collaborations with other tech companies, platforms for user acquisition, or strategic alliances with content creators.

For example, partnering with smartphone manufacturers could pre-install your app, or working with influencers can help you reach a broader audience.

Cost Structure

Finally, Cost Structure.

Developing and running an app involves various costs, from development and hosting to marketing and legal fees. Understanding these will help you manage your finances effectively.

It's crucial to identify which costs are fixed, like salaries, and which are variable, like server costs, to manage your budget effectively.

What should be included in each section of the Business Model Canvas for a mobile app?

Unsure about how to approach the Business Model Canvas for your mobile app? You can start by customizing the template we've included in our business plan template .

Let's break down what you might include in each section of the Business Model Canvas for a mobile app.

Remember, these are just examples to get you started. Your mobile app's Business Model Canvas will be unique to your app's features, target audience, and strategic goals. Good luck with your planning!

Examples of Business Model Canvas for a mobile app

Below are examples of business model canvases for three different types of mobile apps: a Fitness Tracking App, a Language Learning App, and a Mobile Gaming App.

Fitness Tracking App Business Model Canvas

Language Learning App Business Model Canvas

Mobile Gaming App Business Model Canvas

You can also read our articles about: - how to build a marketing strategy for your mobile app development project - how to segment the customers of your mobile app development project - how to make a competition study for your mobile app development project - how to develop a mobile app (guide)

• Choosing a selection results in a full page refresh.
• Opens in a new window.

• Programe de finanțare
• 0772 075 694
• [email protected]

Planul de afaceri model Canvas – Business Model Canvas

Modelul Canvas a fost propus de catre elvetianul Alexander Osterwalder care transpune un plan de afaceri pe o singura pagina, panza (canvas) sub forma unui grafic care prezinta clienti, modalitatile de relationare cu potentialii clienti, infrastructura firmei si modalitatile de finantare. Modelul Canvas este asemenea unui management strategic, managerul ia anumite decizii pentru intreprinderea pe care o conduce implicand resurse atat din mediul intern cat si din cel extern.

Planul de afaceri model Canvas are urmatoarea structura:

Customer Segments (Piata) – In aceasta prima parte a panului de afaceri model Canvas se vor trece informatii referitoare la nisa de piata, segmentul de clienti vizati precum si informatii despre cei mai importanti clienti ai firmei.

Value Propositions (Valoarea propusa) – Sunt prezentate principalele pachete de produse/servicii oferite pentru fiecare segment de client, ce probleme ale clientilor le rezolva produsele si serviciile oferite, de asemenea sunt prezentate si o serie de valori pe care firma nu poate sa le ofere clientilor in momentul de fata.

Channels (Canalele) – In acest capitol al planului de afaceri sunt prezentate principalele canale prin care produsele/serviciile ajung la clienti, care sunt cele mai functionale, care este cel mai eficient raport calitate pret, cum pot fi clientii sensibilizati.

Customer Relationships (Relatiile cu clientii) – Sunt prezentate relatiile pe care le are societatea cu diversele sale segmente de piata, cum sunt intretinute aceste relatii si ce costuri implica. Cateva exemple de relatii cu clientii pot fi: asistenta tehnica dedicata, socializare prin intermediul retelelor de specialitate, prezenta web.

Revenue Streams (Surse de venituri) – In acest capitol sunt previzionate sumele pe care clientii ar fi dispusi sa le ofere pentru un anumit serviciu/produs si de asemenea si modalitatile cum vor fi oferite: abonamet, inchiriere, leasing.

Key Resources (Resurse) – Contine principalele resurse de care avem nevoie pentru a desfasura activitatea, cum ar fi: canalele de distributie, relatiile cu clientii. In aceasta parte se mai pot prezenta si anumite resurse ce pot oferi avantaj competitional: brevete, baza de date, drepturi de autor.

Key Activities (Principalele activitati) – Pasul acesta prezinta activitatile pe care trebuie sa le desfasoare firma pentru a oferi un plus de valoare clientilor sai. Aici se pot include canalele de distributie, relatiile cu clientii, flexibilitatea fata de client.

Key Partners (Principalii parteneri) – Continutul acestei parti este axata predominant pe cine sunt principalii nostri parteneri, care sunt furnizorii importanti si ce noi resurse se pot obtine de la acestia.

Cost Structure (Costurile) – In acest ultim capitol al planului de afaceri model Canvas sunt prezentate principalele costuri pe care le genereaza afacerea propusa, care dintre resursele cheie prezentate anterior sunt cele mai scumpe, precum si o prezentare a cash-flow.

Modelul Canvas este din ce in ce mai folosit la nivel international deoarece are o structura simplificata, este relativ usor de relizat si poate fi urmarit de catre managerul firmei pe tot parcursul desfasurarii activitatii, astfel putand fi modificat sau actualizat la diferitele schimbari care apar in firma sau pe piata.

Contact WhatsApp

Dacă aveți nevoie de ajutor nu ezitați să ne contactați!