Business Model Canvas

Business Model Canvas
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Business Model Canvas
The genesis of the Business Model Canvas (BMC) is attributed to Alexander Osterwalder. He proposed BMC in his book titled Business Model Ontology which describes a number of prescriptions that make the building blocks for the activities. BMC enables both existing and new business organizations to concentrate on strategic and operational management as well as marketing plan (Osterwalder & Pigneur, 2010). The BMC is basically a strategic management and entrepreneurial tool.
The unique features of the BMC approach are as follows: first, a manager can use this tool in describing, designing, challenging, inventing, and pivoting the business model of his business organization (Osterwalder & Pigneur, 2010). Secondly, the BMC comprises 9 sections or building blocks, these are: Value Propositions – how the business intends to satisfy the needs of clientele or solve the problems of customers. Customer Segments – the customer groups served by the company; Channels – the means through which value propositions are delivered (Osterwalder & Pigneur, 2010). Revenue Streams – brought about by value propositions that are being delivered to the customer segments. Customer Relationships – the company’s continuation of customer segments; Key Resources – the assets which are necessary in offering and delivering the building blocks. Key Activities – the activities which are required for the business to deliver the building blocks; Cost Structure – this provides a description of the critical costs for operating the business model; and Key Partnerships – this underlines the external organizations which supply the key resources as well as key activities.
The business model can be compared to lean canvas approach. This comparison is illustrated in the table below:
Element Lean CanvasBusiness Model Canvas1FocusFocuses solely on entrepreneursFocuses on investors, consultants, customers, advisors, and entrepreneurs2ApproachStarts with the problem, the proposed solution to the identified problem, the different channels that can be used to achieve...