The Osterwalder Business Model Canvas is a visual representation of a company’s key business components, and is used by entrepreneurs and business owners to help them understand and organize their strategies. This innovative tool provides a comprehensive view of a company’s value proposition, customer segments, channels, customer relationships, revenue streams, key activities, key resources, key partners, and cost structure.
Visualizing a company’s business activities can have several managerial benefits as visualization helps to present complex information in an easy-to-understand format, allowing stakeholders to quickly grasp the key aspects of the business. Furthermore, visuals can effectively communicate data and insights, making it easier to present findings and get buy-in from key decision-makers, since they can more easily identify trends, patterns, and opportunities, leading to more informed and effective decision-making.
Additionally, visualization can engage stakeholders by making the information more accessible, memorable, and actionable. And as a bonus, visuals can provide a quick and clear overview of business activities, allowing organizations to monitor progress and track performance against key metrics.
There are many different tools available to managers for visualizing the activities of their business. In this article I’d like to introduce one that is especially useful for bringing together data in diversified companies.
The Osterwalder Business Model Canvas
The Osterwalder business model canvas, also known as the “business model canvas,” is a tool used to visualize and plan a company’s business model. It was developed by Alexander Osterwalder and Yves Pigneur and is based on their book “Business Model Generation.”
The business model canvas is a visual representation of a company’s business model, showing how the different elements of the model fit together and interact. The canvas consists of nine building blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structure.
By using the business model canvas, companies can quickly and easily experiment with different business model options and evaluate the potential strengths and weaknesses of each. This can help them identify opportunities for growth and innovation and make more informed decisions about the direction of their business.
The Nine Building Blocks of the Osterwalder Business Model Canvas
The Osterwalder business model canvas consists of nine building blocks, which are:
- Customer segments: This is the group or groups of people that the company’s products or services are aimed at.
- Value propositions: This is the unique value or benefit that the company offers to its customers.
- Channels: This is the way that the company reaches its customers and delivers its products or services.
- Customer relationships: This is the type of relationship that the company has with its customers, such as personal assistance or self-service.
- Revenue streams: This is the way that the company generates revenue, such as through sales or subscriptions.
- Key resources: This is the key assets that the company needs to operate, such as physical assets, intellectual property, or human resources.
- Key activities: This is the key activities that the company needs to perform in order to operate and deliver its products or services.
- Key partners: This is the key partners that the company works with, such as suppliers or distributors.
- Cost structure: This is the way that the company incurs costs, such as through production or marketing.
By using the business model canvas, companies can quickly and easily experiment with different business model options and evaluate the potential strengths and weaknesses of each. This can help them identify opportunities for growth and innovation and make more informed decisions about the direction of their business.
Information to Include in Each Building Block
The Osterwalder business model canvas is usually arranged as shown in above graphic. It is often useful to ask the following questions to decide which information to include in each block:
- Key Partners:
- Who are our key partners?
- Who are our key suppliers?
- Which key resources are we acquiring from our partners?
- Which key activities do our partners perform?
- Key Activities:
- What key activities do our value propositions require?
- How are our distribution channels organized?
- How are our customer relations organized?
- How are our revenue streams organized?
- Key Resources:
- What key resources do our value propositions require?
- What are our distribution channels?
- What are our customer relationship resources?
- What are our revenue streams?
- Value Propositions:
- What value do we deliver to the customer?
- Which one of our customers’ problems are we helping to solve?
- What bundles of products and services are we offering to each segment?
- Which customer needs are we satisfying?
- What is the minimum viable product?
- Customer Relationships:
- How do we get, keep, and grow customers?
- Which customer relationships have we established?
- How are they integrated with the rest of our business model?
- How costly are they?
- Channels:
- Through which channels do our customer segments want to be reached?
- How do other companies reach them now?
- Which ones work best?
- Which ones are most cost-efficient?
- How are we integrating them with customer routines?
- Customer Segments:
- For whom are we creating value?
- Who are our most important customers?
- What are the customer archetypes?
- Cost Structure:
- What are the most important cost factors inherent to our business model?
- Which key resources are most expensive?
- Which key activities are most expensive?
- Revenue Streams:
- For what value are our customers really willing to pay?
- For what do they currently pay?
- What is the revenue model?
- What are the pricing tactics?
Examples of How to Use the Osterwalder Business Model Canvas
The Osterwalder business model canvas is a flexible and versatile tool that can be used by companies in a variety of industries and contexts. Here are some examples of how the business model canvas can be used:
A new start-up: A new company that is just starting out can use the business model canvas to experiment with different business model options and identify the model that is most likely to be successful. For example, the start-up might consider offering a B2C model, where it sells directly to consumers, or a B2B model, where it sells to other businesses.
A mature company: An established company that has been in business for many years can use the business model canvas to explore new opportunities for growth and innovation. For example, the company might consider using a subscription model, where customers pay a regular fee to access the company’s products or services, or a multi-sided platform model, where the company creates a platform that brings together different groups of customers.
A company in a rapidly-changing industry: A company that operates in an industry that is undergoing rapid change, such as the technology industry, can use the business model canvas to adapt to the changing market and stay ahead of the competition. For example, the company might consider using a licensing model, where it sells the rights to use its intellectual property to other businesses, or a franchise model, where it sells the rights to use its brand and business model to other businesses.
Overall, the business model canvas is a valuable tool for companies of all sizes and in all industries, as it can help them to better understand their business model and identify opportunities for growth and innovation.
Conclusion
The Osterwalder business model canvas is a tool used to visualize and plan a company’s business model. It consists of nine building blocks: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structure. The business model canvas can be used by companies in a variety of industries and contexts to experiment with different business model options and identify opportunities for growth and innovation.
You may leave a comment and let me know if I missed any important points, as well as share your thoughts and opinions on the subject.