Business Model CanvasThe Business Model Canvas is used to describe the following 9 elements of a business modelStrategicCoffeeSC_2e6883f0-0e40-11eb-a2ea-493f2983ea00Everything you need to know about Business Strategy Development and ExecutionChris FoxAuthor - Owner, StratNavApp -- I first came across the Business Model Canvas in the book "Business Model Generation" by Alexander Osterwalder and Yves Pigneur.It is a simple template for describing the various key elements that make up a business model - that is, how a firm extracts value from the markets in which it competes.Alexander OsterwalderBusiness Model Generation, Co-AuthorYves PigneurBusiness Model Generation, Co-AuthorFirms extract value from the markets in which they compete_2e68858a-0e40-11eb-a2ea-493f2983ea00To describe the elements of a business model_2e688698-0e40-11eb-a2ea-493f2983ea00PartnersIdentify key partners_2e68879c-0e40-11eb-a2ea-493f2983ea001KP = Key Partners -- Which key partners does the firm rely on, and for what? They could be normal supply, outsource or distribution relationships, but could also include strategic alliances between non-competitors or competitors, and joint ventures. Relationships may be exclusive and tightly contracted or more open market. It is also important to be clear what the firm gains from the partnership that it could not get alone, and therefore how partners are selected and managed.InputsDocument the inputs supplied by partners_2e6888a0-0e40-11eb-a2ea-493f2983ea001.1ProcessesDocument the processes conducted by partners_2e6889a4-0e40-11eb-a2ea-493f2983ea001.2ActivitiesDocument the key activities companies must perform in order to deliver their value propositions_2e688aa8-0e40-11eb-a2ea-493f2983ea002KA = Key Activities -- What key activities must the company perform in order to deliver its value propositions through its channels to its customers? These could include all the activities in the value chain, from product development to manufacturing to sales and marketing and post-sales support, as well as supporting processes such as hiring and developing staff, knowledge management and problem solving, and developing systems. See also How to use Porter's Value Chain Analysis.ProductsAddress product development requirements_2e688bb6-0e40-11eb-a2ea-493f2983ea002.1ManufacturingAddress manufacturing requirements_2e688cb0-0e40-11eb-a2ea-493f2983ea002.2Marketing & SalesAddress sales and marketing requirements_2e688dbe-0e40-11eb-a2ea-493f2983ea002.3SupportAddress post-sales support requirements_2e688ec2-0e40-11eb-a2ea-493f2983ea002.4Hiring & Staff DevelopmentAddress hiring and developing staff requirements_2e688fda-0e40-11eb-a2ea-493f2983ea002.5Knowledge ManagementAddress knowledge management requirements_2e6890e8-0e40-11eb-a2ea-493f2983ea002.6ProblemsAddress problem solving requirements_2e6891f6-0e40-11eb-a2ea-493f2983ea002.7SystemsAddress systems development requirements_2e6892fa-0e40-11eb-a2ea-493f2983ea002.8ResourcesIdentify the resources organisations need to deliver their value propositions_2e689412-0e40-11eb-a2ea-493f2983ea003KR = Key Resources -- What key resources does the organisation need to deliver its value propositions? Key resources can include people and skills, physical assets, intellectual property, patents and copyrights, as well as data, brands and financial resources.People & SkillsIdentify people and skills requirements_2e689520-0e40-11eb-a2ea-493f2983ea003.1Physical AssetsIdentify physical asset requirements_2e68962e-0e40-11eb-a2ea-493f2983ea003.2Intellectual PropertyIdentify intellectual property requirements_2e689746-0e40-11eb-a2ea-493f2983ea003.3Patent & CopyrightsIdentify patent and copyright requirements_2e68985e-0e40-11eb-a2ea-493f2983ea003.4DataIdentify data requirements_2e68996c-0e40-11eb-a2ea-493f2983ea003.5BrandingIdentify branding requirements_2e689a8e-0e40-11eb-a2ea-493f2983ea003.6FinancingIdentify financial resource requirements_2e689bb0-0e40-11eb-a2ea-493f2983ea003.7Value PropositionDocument the values companies offer their customers_2e689eb2-0e40-11eb-a2ea-493f2983ea004VP = Value Proposition -- What value does the company offer its customers? Value propositions describe which of the customers' problems are solved using the bundle of products and services a company offers, or which of the customers' needs are satisfied. A competitive value proposition is typically something which is new in the market, or which performs better, is more flexible/customisable, is better designed or is cheaper than what is already available in the market.ProblemsDescribe which of the customers' problems are solved_2e68a06a-0e40-11eb-a2ea-493f2983ea004.1NeedsDescribe which of the customers' needs are satisfied_2e68a18c-0e40-11eb-a2ea-493f2983ea004.2Customer RelationshipsDocument the kinds of relationships companies will have with their customers_2e68a2ae-0e40-11eb-a2ea-493f2983ea005CompaniesCustomersCR = Customer Relationships -- What kinds of relationships will the company have with its customers?LevelDocument the level of service to be provided_2e68a3d0-0e40-11eb-a2ea-493f2983ea005.1Customer relationships can offer high levels of personal service, or expect customers to self-serve.DurationDocument the intended duration of relationships_2e68a4f2-0e40-11eb-a2ea-493f2983ea005.2Business can be transactional where the customer relationship is limited to the purchase process, or relational, where the customer enters into a longer term relationship with the business.ScopeDocument the intended span of relationships_2e68a61e-0e40-11eb-a2ea-493f2983ea005.3Customer relationships can span the pre-sales, sales and post-sales activities, like servicing, cross-sales and up-selling.ChannelsDocument the channels through which companies deliver products or services_2e68a754-0e40-11eb-a2ea-493f2983ea006CH = Channels -- Through which channels will the company deliver its products or services to its customer? This should cover the entire customer process including initial awareness, pre-sales, sales and post-sales experiences. This should include channel mix, multi- and mono-channel strategies as well as channel access and ownership.AwarenessDocument channels for raising initial awareness_2e68a948-0e40-11eb-a2ea-493f2983ea006.1Pre-SalesDocument pre-sales channels_2e68aa7e-0e40-11eb-a2ea-493f2983ea006.2SalesDocument sales channels_2e68abbe-0e40-11eb-a2ea-493f2983ea006.3Post-SalesDocument channels for post-sales experiences_2e68acf4-0e40-11eb-a2ea-493f2983ea006.4Customer SegmentsDocument the customer segments to be and not to be served_2e68ae20-0e40-11eb-a2ea-493f2983ea007CS = Customer Segments -- What customer segments will the business serve, and equally importantly, which segments will it not actively pursue?Customer segments are distinct customer categories which can be described in terms of what they need from the product or service and how they will use it, how many of them there are, where they can be found and through which channels they can be reached, what kinds of relationships you will have with them, what price they are willing to pay, and, taking all of the above into account, how profitable they are likely to be. See also What is segmentation and how does it work?NeedsDescribe customer categories in terms of what they need from the product or service_2e68af56-0e40-11eb-a2ea-493f2983ea007.1UsagesDescribe customer categories in terms of how they will use the products or services _2e68b096-0e40-11eb-a2ea-493f2983ea007.2PopulationDetermine how many customers there are_2e68b1d6-0e40-11eb-a2ea-493f2983ea007.3LocationsDetermine where the customers can be found_2e68b320-0e40-11eb-a2ea-493f2983ea007.4ChannelsDetermine through which channels the customers can be reached_2e68b456-0e40-11eb-a2ea-493f2983ea007.5RelationshipsDetermine what kinds of relationships will be established with them_2e68b58c-0e40-11eb-a2ea-493f2983ea007.6PricingDetermine what price customers are willing to pay_2e68b6d6-0e40-11eb-a2ea-493f2983ea007.7ProfitabilityEvaluate how profitable the customers are likely to be_2e68b816-0e40-11eb-a2ea-493f2983ea007.8Cost StructureDocument the cost structures_2e68b956-0e40-11eb-a2ea-493f2983ea008C$ = Cost Structure -- What is the cost structure of the business? Costs may be fixed or variable, one-off or recurring, sunk or capitalised, deferred (as liabilities) or contingent (as reserves). Businesses with higher variable costs (relative to fixed costs) typically require less upfront investment and scale more easily, whilst businesses with higher fixed costs typically benefit more from scale. A low-cost business model will require a different cost structure to a high value-add business model.Fixed CostsDetermine fixed costs_2e68baaa-0e40-11eb-a2ea-493f2983ea008.1Variable CostsDetermine variable costs_2e68bbea-0e40-11eb-a2ea-493f2983ea008.2RecurrenceDetermine whether costs will only be incurred once or whether they will recur_2e68bd2a-0e40-11eb-a2ea-493f2983ea008.3TimingDetermine whether costs will be sunk or capitalised_2e68be92-0e40-11eb-a2ea-493f2983ea008.4Deferrals & ContingenciesDetermine whether costs will be deferred (as liabilities) or contingent (as reserves)_2e68bfd2-0e40-11eb-a2ea-493f2983ea008.5Revenue StructureDetermine how much are customers willing to pay_2e68c112-0e40-11eb-a2ea-493f2983ea009R$ = Revenue Structure -- How much are customers really willing to pay? Revenues can be in the form of a one-off purchase price, or recurring subscriptions, usage or rental income. Pricing can be fixed, variable, or differential. Discounting can be used to encourage specific buyer behaviours.TimingDetermine the timing of payments_2e68c2d4-0e40-11eb-a2ea-493f2983ea009.1One-TimeConsider one-off purchase pricing_2e68c428-0e40-11eb-a2ea-493f2983ea009.1.1SubscriptionsConsider recurring subscription pricing_2e68c57c-0e40-11eb-a2ea-493f2983ea009.1.2Usage & RentalsConsider usage or rental pricing_2e68c6e4-0e40-11eb-a2ea-493f2983ea009.1.3FlexibilityDetermine the flexibility of pricing_2e68c838-0e40-11eb-a2ea-493f2983ea009.2FixationConsider fixed pricing_2e68c98c-0e40-11eb-a2ea-493f2983ea009.2.1VariabilityConsider variable pricing_2e68cb12-0e40-11eb-a2ea-493f2983ea009.2.2DifferentialsConsider differential pricing_2e68cc70-0e40-11eb-a2ea-493f2983ea009.2.3DiscountingConsider discounting to encourage specific buyer behaviours_2e68cdc4-0e40-11eb-a2ea-493f2983ea009.32020-10-14https://strategiccoffee.chriscfox.com/2015/05/how-to-use-business-model-canvas.htmlOwenAmburOwen.Ambur@verizon.net