Business Canvas Model
Business Canvas Model is one of the instruments of strategical management for entrepreneurs. Alexander Osterwalder and Yves Pigneur are the authors of this instrument.
Their book "Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers" is the most popular instrument for studying construction business models. The book offers the original concept of business analysis, creation and improvement of business models used by the largest companies in the world and, of course, Web Business Effect.
Using the Business Canvas Model at the initial stages of the project is very convenient, because it provides answers to the main questions that faces the company's employees while working on the project:
What are ways of monetization?
How is to attract and retain clients?
Is the financial model sustainable?
Does everyone understand goals and strategy?
How is to minimize the risk of losing investment?
Thanks to the development of business models, our company also analyzes the "weaknesses" and new "growth points" of existing projects and start-ups.
Business Canvas Model consists of such elements:
- clients;
- key activity;
- product;
- cash flows;
- channels;
- relations;
- actives;
- partners;
- costs.
Every of these elements is a part of the block. 9 blocks can be united into 4 groups; each of one's will describe its part of business model of an organization or a project.
Main groups and blocks in the frames of business model:
Infrastructure describes how and with the help of which elements a company creates value of its product or service. In fact, the basis of manufacturing processes of the company defines in this block that consists of 3 fields:
- Processes are the most important processes in the chain of creating value for clients of the company (users etc).
- Resources are the key resources that are needed to create value for a product. Resources can be human, financial, intellectual, means of production, etc;
- Partners are key partners, relationship with whom can influence on the process of creating value for company’s clients. The main supplier, a strategic alliance, a joint venture can be in the list of partners.
The supply describes the product or service that company offers on the market. It consists only of one field:
- Value proposition is a set of products and services that highlight the company on the market and create value for customers.
Clients describe main segments of the market or clients. The activity of the company first of all focused on it. In this group can be included main processes and methods of co-operation with clients. It consists of two fields:
- Clients. First of all, the company must understand who will use offered products or service, what are their needs and what are specialties of aimed market.
- Sales channels are a way to deliver a product or service to a customer. They must provide satisfaction with speed, efficiency and cost.
Relationships describe how the relationship with customers will be built and how the company will find new customers, retaining existing ones and develop relationships with them. Different forms of building relationships with clients may include:
- Personal service is personal interaction between the company employee and the client, usually in sales offices, by phone, in an online chat, etc.
- Exclusive personal service is the same as the first item, but with highlighting for each client personal servicing manager.
- Self-service. Clients independently serve themselves with the tools offered by the company.
- Automated service is almost the same as self-service, but the company's systems can determine the needs of the client and offer the most interesting offers.
- Collaborative work. Customers are directly involved in the design process of a company's product or service.
Finance describes the features of organization of financial flows of the company, both incoming (pricing) and outgoing (cost structure). It consists of two fields:
- Cost structure describes the main financial models and investment objects of the company that need to be taken to create a product or service.
- Sources of income are a way to get funding from each of the market segments in which the company works.
The easiest way to fill out a Business Canvas Model is to stick stickers to the following table (this is how the project is analyzed in our company):
Business model on the example of a football club
Below is an example of how WBE conducted a research, analysis of customer information and created a football club business model.
Technical task from the client looked like this.
Create a website for a football club that would be informational and would have the following goals:
- provide existing fans with information about club activities, team players, tournaments, etc .;
- sell the attributes of the club;
- expand already existing audience;
- increase attendance of matches;
- bring pleasure from staying on it (due to gameplay).
Client interviews were conducted and all key business details were identified. After that, the company's employees switched to the research phase. The main purpose of the research phase was to identify the following details:
- pros and cons in the work of other football clubs;
- advantages and disadvantages of sites of football clubs-competitors.
These details will be used in the future for a comprehensive analysis of the project and the identification of "pain points" (weaknesses) and "growth points" (definition of directions for further development).
Business model development
In the interview, the client told in detail about: the key partners of the football club, key activity, key resources, value proposition, customer relations, customer contact channels, main target audience, main revenue and expenditure channels.
After structuring and analyzing all the information received, this is the business model:
Summing up all of the above, we can say that the development of the Business Model Canvas is an obligatory point in the development of any digital product. After all, as a result, the client receives an integrated approach to solving business problems and achieving "business goals".
The company of WBE will gladly assist you in developing quality business model for your service and product!