“A business model describes the

rationale of how an

organization creates,

delivers, and captures

value”

BUSINESS MODEL A S D E F I N E D B Y O S T E R W A L D E R A N D P I G N E U R

“A business model…show[s] the

logic of how a company

intends to make money.”

BUSINESS MODEL A S D E F I N E D B Y O S T E R W A L D E R A N D P I G N E U R

There are nine essential and

interrelated parts within any business

covering “customers, offer,

infrastructure and financial

viability”

THE 9 BUILDING BLOCKS

1 CUSTOMER SEGMENTS

• Group of people a company

targets and chooses to serve

• Distinctly segmented based on

common needs/attributes

• Heart – “For whom are we

creating value?”

• Mass? Niche? Segmented? Diversified?

Multi-sided markets?

2 VALUE PROPOSITIONS

• Products and services that

create value for the specified

Customer Segment

• Either solve a customer

problem or satisfie a customer

need – “What value do we

deliver to the customer?

• Newness? Performance? Customization?

Convenience/ Usability? Brand? Price?

THE 9 BUILDING BLOCKS

3 CUSTOMER SEGMENTS

• Customer Touch Points utilized to deliver a Value Proposition

• Finding the right mix/match between Channel Types and

Phases is crucial – “Through which Channels do our Customer Segments want to be reached?”

• Partner/Own/Indirect/Direct with Awareness/Evaluation/ Purchase/Delivery/After Sales

4 CUSTOMER RELATIONSHIPS

• Types of relationships established with a specific Customer Segment

• Motivated by Customer Acquisition/ Customer Retention/ Boosting Sales –

“What type of relationship does each of our Customer Segments expect us to establish and maintain with them?”

• Personal Assistance? Self-service? Automated services? Co-creation?

THE 9 BUILDING BLOCKS

5 REVENUE STREAMS

• Cash Earnings generated

from each Customer Segment

• Transaction vs. Recurring

Revenues , Fixed vs. Dynamic

Pricing - “How much does

each Revenue Stream

contribute to overall

revenues?”

• Asset Sale? Usage Fee? Subscription

Fee? Lending/Renting/Leasing?

Licensing? Brokerage Fees? Advertising?

6 KEY RESOURCES

• Most important assets

required to make the business

model work

• Allow the company to create

and offer a Value Proposition,

reach markets, maintain

Customer relationships, and

earn revenues – “What Key

Resources do our Value

Propositions require?”

• Physical? Intellectual? Human?

Financial?

THE 9 BUILDING BLOCKS

7 KEY ACTIVITIES

• Most important activities

required to make the business

model work

• Routine/critical tasks that

engage customers and turn a

profit – “What Key Activities

do our Value Proposition

require?”

• Production? Problem solving?

Platform/Network?

8 KEY PARTNERSHIPS

• Most important network

of suppliers / partners

required to make the business

model work

• Motivated by optimization and

economy of scale/ Reduction

of risk/ Acquisition of

particular resources – “Who

are our Key Partners? Who

are our key suppliers?”

• Strategic Alliance? Coopetition? Joint

Venture? Buyer-Supplier?

THE 9 BUILDING BLOCKS

9 COST STRUCTURE

• All/Most important costs

incurred to operate a business

model

• Cost-driven vs. Value-driven

Cost Structures – “What are

the most important costs

inherent in our business

model?”

• Fixed costs? Variable costs? Economies

of Scale? Economies of Scope?

A flexible template for

capturing, analyzing, and

creating a shared language

between the 9 building blocks of a

business model

THE BUSINESS MODEL CANVAS

THE BUSINESS MODEL CANVAS

http://www.businessmodelgeneration.com/toolbox

BUSINESS MODEL GENERATION W

all P

oste

r Plot the Canvas on a Poster & put on the wall

Mobilize Ske

tch

& P

ost Understand

and sketch out business model using drawings & moveable post-its

Understand

De

sig

n &

Exe

cu

te

Find the pattern*/s that best suit your business then design your own

Design & Implement

Re

vie

w &

Re

bu

ild

Regularly re-assess viability & future promise with a SWOT within each of the 9 and rebuild design as necessary

Manage

* “ U N B U N D L E D ” B U S I N E S S M O D E L / T H E L O N G T A I L / M U L T I - S I D E D

P L A T F O R M / “ F R E E ” B U S I N E S S M O D E L / “ O P E N ” B U S I N E S S M O D E L

H T T P : / / W W W . B U S I N E S S M O D E L G E N E R A T I O N . C O M /

BE STRATEGIC.