What is the Business Model Canvas?

The business model canvas is a strategic management and lean startup template for developing new or documenting existing business models. It can also be defined as a visual chart with elements describing a firms or products value proposition, infrastructure customers, and finances. It enables firms to align their activities by illustrating potential trade-offs.

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What Goes into the Business Model Canvas

The Business Model Canvas (BMC) was first proposed by Alexander Osterwalder in 2008 (see the Harvard Business Review link for greater detail). Since that time, new canvases for specific niches have appeared. It includes the following factors:

• Infrastructure 
  • Key Activities, 
  • Key Resources, 
  • Partner Network
• Offering - Value Propositions
• Customer segments
• Channels - Method of delivering value proposition
• Customer Relationships
• Finances 
  • Cost Structure, 
    • Cost-Driven
    • Value Driven
  • Revenue Streams

Business structures can be classified as either cost-driven or value-driven. Features of these cost structures include: 

fixed costs (unchanged costs), variable costs, economies of scale, economies of scope and revenue streams. Revenue streams can be generated through; selling of asset, usage fee, subscription fee, lending and leasing of properties, licensing, brokerage fees and advertising.

Related Topics

• What is Strategy?
• What is Business Strategy?
• What is Management Strategy (Strategic Management)?
• Types of Business Strategy?
• Competitive Advantage
  • First Mover Advantage Definition
• Organizational Dynamics
  • Synergy - Definition
• Business Model Overview
  • Business Model Canvas - Explained
  • Razor Blade Business Model
  • Click and Mortar Model
• How Management Develops a Strategic Plan
  • Mintzberg's 5 Ps of Strategy