An Introduction for the Business Model Canvas
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Karim Jabber, External Lecturer, Copenhagen Business School
Alexander Osterwalder & Yves Pigneur are the brains behind the world-renowned “business model canvas” – instrumental in helping new businesses put strategy into practice.
Osterwalder and Pigneur define a business model as follows: A business model describes the rationale of how an organization creates, delivers and captures value.
A business model canvas is a visual representation that is simple, relevant and intuitively understandable. The business model canvas can be divided into nine building blocks that show the logic of how a company intends to make money. It covers the four main areas of business: customers, offer, infrastructure, and financial viability.
When you take a glance at the canvas it is quite intuitive to see how these four areas are connected.
In the center, you have the offer, the value proposition and to the right, the customer side, that is - market side or demand side. Offer or value is delivered to the customer segments through specific sales channels. For example, through a webshop, retail outlet, physical sales force, and so on.
To the left, you have the infrastructure side, that is - the back end or the supply side. Here, you can see how the business organizes itself to generate their offer. Which key resources it has at its disposal, which activity it undertakes, and which key partners it engages with.
And finally, the financial viability side, represented by the revenue streams and the cost structure. Unless there is a positive balance between the revenue side and the cost side, the business will not be viable.
Osterwalder and Pigneur define a business model as follows: A business model describes the rationale of how an organization creates, delivers and captures value.
A business model canvas is a visual representation that is simple, relevant and intuitively understandable. The business model canvas can be divided into nine building blocks that show the logic of how a company intends to make money. It covers the four main areas of business: customers, offer, infrastructure, and financial viability.
When you take a glance at the canvas it is quite intuitive to see how these four areas are connected.
In the center, you have the offer, the value proposition and to the right, the customer side, that is - market side or demand side. Offer or value is delivered to the customer segments through specific sales channels. For example, through a webshop, retail outlet, physical sales force, and so on.
To the left, you have the infrastructure side, that is - the back end or the supply side. Here, you can see how the business organizes itself to generate their offer. Which key resources it has at its disposal, which activity it undertakes, and which key partners it engages with.
And finally, the financial viability side, represented by the revenue streams and the cost structure. Unless there is a positive balance between the revenue side and the cost side, the business will not be viable.
This blog post is based on my learnings from the course on ‘social entrepreneurship’ offered by Copenhagen Business School through Coursera (2014).
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