BMC - Business Model Canvas Notes

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Business Model Canvas (BMC)


Business Model Canvas is a graphic representation of a number of variables that show the values of an organization.

The Business Model Canvas is a business tool used to visualise all the building blocks when you want to start a business, including customers, route to market, value proposition and finance.

It explains who your customer base is and how you deliver value to them and the related details of financing.

Steps Follow:
  1. Customer Segments
  2. Value Proposition
  3. Channels
  4. Customer Relationships
  5. Revenue Streams
  6. Key Resources
  7. Key Activities
  8. Key Partners
  9. Cost Structure

Business Model Canvas Graphic Representation

1) Customer Segments 

The groups of people or organizations you aim to reach or serve.

  • For whom are we creating value?
  • Who are our most important customers, clients, or users?

2) Value Propositions

Value Propositions are the products and services that create value for a specific Customer Segment. They do so by solving a customer problem or satisfying a customer need.

  • What value do we deliver to the customer?
  • Which job are we helping the customer get done?
  • Which one of our customer's problems are we helping to solve?
  • What bundles of products and services are we offering to each Customer Segment?
  • Which customer needs are we satisfying?

3) Channels

How a company communicates with and reaches its customer segments. Channels are typically direct or indirect and has five phases: awareness, evaluation, purchase, delivery, and after sales.

  • Through which Channels do our Customer Segments want to be reached?
  • How are our Channels integrated? Which ones work best?
  • How are we reaching them now?
  • How are we integrating them with customer routines?
  • Which ones are most cost-efficient?

4) Customer Relationships

Customer relationships may be driven by one or more of three motivations: 1. Customer acquisition, 2. Customer retention and 3. Increased sales.

  • What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
  • Which ones have we established?
  • How are they integrated with the rest of our business model?
  • How costly are they?

5) Revenue Streams

Revenue is the amount of money that is brought into a company through its various business activities (e.g. sales of products and services).

  • What problem are you solving?
  • Why is the problem important?
  • Is there a true need? Or will you need to differentiate yourself?
  • What is your solution?

6) Key Resources

Key Resources describes the most important assets required to make a business model work.

  • What Key Resources do our Value Propositions require?
  • Customer Relationships?
  • Our Distribution Channels?
  • Revenue Streams?

Categories of Key Resources:

  • Physical – Buildings, vehicles, machines, raw goods, etc.
  • Financial – Cash, credit, stock, etc.
  • Human – Creativity, experience, etc.
  • Intellectual – Brand, proprietary knowledge, patents, partnerships, etc.

7) Key Activities

Business activities include operations, marketing, production, problem-solving, and administration

  • What Key Activities do our Value Propositions require?
  • Customer Relationships?
  • Our Distribution Channels?
  • Revenue streams?

8) Key Partner

These can be the relationships that your company has with your suppliers, your manufacturers, business partners, etc.

  • Who are our Key Partners?
  • Who are our key suppliers?
  • Which Key Activities do partners perform for us?
  • Which Key Resources are we acquiring from partners?

9) Cost Structure

Cost Structure defines all the costs and expenses that your company.

  • What are the most important costs inherent in our business model?
  • Which Key Activities are most expensive
  • Which Key Resources are most expensive?

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