Business Model Canvas —and How to Use it Properly
When Dr. Reza Nassirzadeh inspired me to conduct innovation workshops at the Industrial Management Institute of Iran, I instantly remembered the Business Model Canvas.
Alex Cowan provides detailed presentations on BMC. The workshop presentation here is based on that. The main objectives of such a workshop are as follows:
- Ability to substantially ideate, describe, evaluate and discuss a business model using the BMC
- Hands-on understanding of user personas and problem scenarios to articulate the Offer’s key drivers
- Hands-on understanding of how to use the AIDA(OR) framework to evaluate the effectiveness of Customer Relationships and Channels
- Understanding of business type and how to evaluate Key Activities, Resources, and Partnerships in this context
The business model canvas — as opposed to the traditional, intricate business plan — helps organizations conduct structured, tangible, and strategic conversations around new businesses or existing ones. Leading global companies like GE, P&G, and Nestlé use the canvas to manage strategy or create new growth engines, while start-ups use it in their search for the right business model. The canvas’s main objective is to help companies move beyond product-centric thinking and towards business model thinking.
BMC is a strategic management and lean startup template for developing new or documenting existing business models. It is a visual chart with elements describing a firm’s or product’s value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.
The nine “building blocks” of the business model design template that came to be called the Business Model Canvas were initially proposed in 2005 by Alexander Osterwalder based on his earlier work on business model ontology. Since the release of Osterwalder’s work around 2008, new canvases for specific niches have appeared.
The BMC can be printed out on a large surface so groups of people can jointly start sketching and discussing business model elements with post-it note notes or board markers. It is a hands-on tool that fosters understanding, discussion, creativity, and analysis. It is distributed under a Creative Commons license from Strategyzer AG and can be used without any restrictions for modeling businesses.
The Business Model Canvas is also available in web-based software format.