Business Model Canvas

Business Model Canvas

BMC is the short form of the term “Business Model Canvas”. BMC is increasingly used when it comes to analyzing and visualizing business models.

This method has been used since 2004 by Alexander Osterwalder and his colleagues to design business models in an innovative and collaborative way.

Especially with startups this is often used – in comparison to a business plan – simple form of a business model. The BMC makes it easy to update frequently changing business models. Different variants of business models can be created very quickly and compared with each other in the team.

Economists Alexander Osterwalder and Yves Pigneur from the University of Lausanne have developed a tool to help entrepreneurs answer these questions. The “Business Model Canvas” allows a quick visualization of the business model and thus gives an overview of strengths and weaknesses. The authors divide a business model into the following nine core components.

1) The customer segment

First, ask yourself which customers you want to address. Is your product targeting the mass market or are you looking at a specific market niche? The better you define your target groups, the easier you can respond to their specific needs.

2) The value offer

What added value do your products and services offer your customers? Are they convincing, for example, by their special performance, their design or their price? How do you make your customers’ daily work easier?

3) The distribution channels

Be aware of which sales channels you want to reach your customers on. In principle, the authors distinguish between their own channels such as (online) direct sales and partner channels such as wholesalers.

4) your customer relations

Customers differ not only in their demands on the product, but also in their expectations of the customer service. As a rule, bank customers generally expect personal assistance from a client advisor. On the other hand, those who primarily sell their offers online will be better served by an automated customer service. Another possibility is the development of customer communities in which interested parties can inform each other on equal terms. There are many examples of such product communities: from the iPhone to the Thermomix.

5) The sources of income

Which payment model best suits your product and the needs of your customers? Do they prefer the classical payment method or perhaps rather a subscription or leasing model?