Tools

9 building blocks in Business Model Canvas

BMC – Business Model Canvas, is a successful tool that we use to describe, analyze and design business models.
The starting point for a good discussion, meeting or workshop about the business model for innovation should be a common understanding of what a business model really is. We need a concept that everyone understands, which facilitates description and discussion. The challenge is to make it simple, relevant and intuitive understandable, without simplifying the complexity of how companies work.
Here we present a concept that allows you to describe and think about the business model of your organization, your competitors, or any other company. This concept has been applied and tested around the world and is already used in most small and large organizations such as IBM, Ericsson, Deloitte, the public sector and much more.
Business Model Canvas can provide the basis for a common language that you can easily use to describe and develop business models to create new strategic options. Without such a common language, it is difficult to systematically challenge assumptions about a business model and renew successfully.
In the concept of Business Model Canvas, we assume that a business model can be described by nine basic building blocks that show the logic of how a company intends to make money. The nine building blocks cover the four main areas of an activity: customers, offer, infrastructure and financial support. The business model is a plan for a strategy to be implemented through organizational structures, processes, and systems.

The 9 building blocks in BMC answer a number of questions about the business model:
1. Customer segment
Whom do we create value for? Who are our most important customers?
2. Valuable Offer
What value do we deliver to our customers? What customer needs do we meet?
3. Channels
What channels do our customer segments want to achieve? How are our channels integrated?
4. Customer Relationships
What types of relationships does each customer segment expect from us to create with them? Who have we created?
5. Income streams
What value are our customers willing to pay for? What are they paying for today?
6. Key Resources
What are key resources required to deliver our value offerings? Our channels, customer relationships, revenue streams?
7. Key activities
What key activities are required to deliver our value offerings? Our channels, customer relationships, revenue streams?
8. Partners
Who are our most important partners? What key resources do we acquire from partners? What key activities are carried out by partners?
9. Cost structure
What costs are the most important costs that our business model requires? What key resources and key activities are most expensive?
Here is a short YouTube clip and how BMC is structured and what the different building blocks mean and are connected.

>> Learn more about Business Model Canvas

>> Learn the first capture in the book: Business Model Generation

>> Download your own Business Model Canvas here and start to work on it!

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