TOOL: BUSINESS

MODEL CANVAS
 Business Model Canvas
”A business model describes the rationale of how a company captures, creates and delivers value to its customers.”
(Inclusive Business Accelerator, 2016)

It is comprised of three areas – marketing, operations and finance- as well as ten different elements - value proposition,
customers, channels, customer relations, key activities, key resources, key partners, impact, cost and finance.

KEY PARTNERS KEY ACTIVITIES VALUE CUSTOMER CUSTOMERS

PROPOSITION RELATIONS

KEY RESOURCES IMPACT CHANNELS Marketing

Operations

COST REVENUE

Finance

Source: (Osterwalder & Pigneur, 2010)

 BoP roles
BoP groups can take the role of customers, partners or human resources. Regardless of their
role and inclusive business should understand the value they offer to them.

KEY PARTNERS KEY ACTIVITIES VALUE CUSTOMER CUSTOMERS

”To our suppliers (BoP groups), we call PROPOSITION RELATIONS
them clients, because in order for us (…)
BoP Group BoP Group
to be their preferred buyer we (…) need
to be offering them value that they are
KEY IMPACT CHANNELS
not going to get from the competitor (…) RESOURCES
That way of doing business is valuable
BoP Group
for those (smallholders) as well as for us
(…) that alignment of interests is
interesting.” David Rosenberg, ECOM COST REVENUE

Agroindustrial Corp. LTD

Source: Source: (Lundy, Becx, Zamierowski, & Amrein, 2012; Seas of Change, 2014)
 Marketing

Value Proposition: Describes the bundle of products and

services that gives value to your target groups. More
specifically, the characteristics that makes your target group
chose your product, service or company over another. To
identify the value proposition it is important to first identify
a problem or need from you target group, which you could
fulfil or satisfy in exchange for something of value to your
company, generally revenue.

Customers: Describes whom your business is generating

value for. They benefit from your products and services, and
usually exchange them for money. Without them your
business would not survive therefore it is important to
invest time in understanding their needs and perspectives.
There can be one or more customer groups in a business
model, each one should be clearly identified in the business
model.

Source: (Osterwalder & Pigneur, 2010; Lundy, Becx, Zamierowski, & Amrein, 2012;
Inclusive Business Accelerator IBA, 2016; Online Business Dictionary, n.d.)
Photo by Mihai Surdu on Unsplash
 Marketing

Channels: Channels refer to how the product or service

reaches and interfaces with its customers.

Customer relations: Describes the type of relationship the

business establishes with each customer group in order to
attract their attention, make them trust, enable them to
experience the product or service, close the deal and retain
the customer. Relationships can range from personal to
automated. When deciding the type of relationship it is
important to take into account its value for the customer and
the costs for your business.

Source: (Osterwalder & Pigneur, 2010; Lundy, Becx, Zamierowski, & Amrein, 2012;
Inclusive Business Accelerator IBA, 2016; Online Business Dictionary, n.d.)
Photo by Alice Young on Unsplash
 Case Study:
Marketing
Let’s return to our case study to exemplify these learned
marketing- related concepts.

Customer and value proposition

HBPS produces hand crocheted and hand knitted children’s
toys and clothes, providing high-consistency, high-quality
and hygienic products made with certified materials,
including organic cotton. HBPS sells products to renowned
wholesalers and retailers in USA, Australia, UK, and other
parts of Europe.

Customer relationship and channels

At the start, Samantha contacted distributers and retailers
directly to offer samples of their products, which was an
effective marketing technique. For Samantha it was
relatively easy to connect to new customers since she is
from the UK herself and understands the business world.
After placing the first orders, customers started returning.
HBPS responded in consistent manner. Some customers
were asked to submit their design ideas for toys and
clothes. Customers could also place orders through their
website (channel).

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

Photo by Imani on Unsplash
 Case Study:
Marketing
BoP and value proposition
For the founders, the underlying objective to start the
business was to create employment opportunities for
rural poor women as a sustainable solution to poverty
alleviation (key incentive).

HBPS provides fairly paid, of good quality, flexible and

local employment to rural women. A great value to the
women, since in rural Bangladesh there is a lack of
sources of income, mainly for women. Although women
are often seen as a financial burden, they are expected to
take care of the family and support in work activities
when needed, such as in agriculture. Young women are
compelled to marry young or often leave their rural
homes in search for jobs in the city, having to pay high
costs for living under degradable conditions while being
exposed to a dangerous environment. Women that stay
in rural areas, have time to spear and are eager to work,
but hardly find local employment opportunities that
adapts to their life-style and needs.

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

Photo by Kelvyn Ornettte Sol Marte on Unsplash
 Operations

Key activities: Consist of the essential activities needed to

create and sustain the value proposition, deliver it to
customer groups, maintain customer relationships and
generate income.

Key resources: Consists of the physical, intellectual,

financial or human resources needed to create and sustain
the value proposition, deliver it to customer groups,
maintain customer relationships and generate income.

Key partners: Direct partners are with whom the company

operates its core business model, contributing with
resources not available in the business, that spread risks,
help raise awareness and market the products or services.
Indirect partners, on the other hand, are those who support
or facilitate the development of the business model.

Source: (Osterwalder & Pigneur, 2010; Lundy, Becx, Zamierowski, & Amrein, 2012;
Inclusive Business Accelerator IBA, 2016; Online Business Dictionary, n.d.)
Photo by Oscar Aguilar on Unsplash
 Case Study:
Operations
Activities
After careful design and sampling of new models in
the head quarters, well trained artisans receive the
knowledge and materials to start their production in
the rural centres. After production, items are
transported back to the head quarters using the public
transport system. All products under-go a four-stage,
centralized quality control system, where products in
need for corrections are returned to the rural centres.
Meanwhile, products that are problem free proceed to
washing, drying, labelling and packaging; then
dispatched by international courier. Artisans produce
their own low-technology tools and equipment. The
head quarter oversees administration activities. The
above mention activities are core to the business
operations, although there are also other additional or
growth-related activities carried out when there are
financial resources: recruitment, skill development
trainings, marketing, research and development, and
workers’ welfare facilities.

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

Photo by julian mora on Unsplash
 Case Study:
Operations
Key resources
HBPS model is based on a low-cost, labour intensive,
electricity-saving, low- technology production process
that leverages the natural ability of the women to work
on hand-crafts. To operate, HBPS relies on human
resources; high-quality raw materials; tools and
equipment; building facilities; as well as, knowledge in
design, administration, business and production.

Partners
HBPS partners up with good suppliers of high-quality
materials. The company has needed support from
external companies and organisations to get their
business model up and running. It receives donations
from MNC’s under their from CSR programmes, local or
international development agencies and NGO’s. Those
donations cover the costs of setting up the rural
production centres and training the BoP groups.

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

Photo by Fancycrave on Unsplash
 Operations

Impacts
All business activities generate impacts to the
environment, people and economy connected to them.
Impacts can be measured in terms of costs and benefits
to the company, it’s stakeholders and the environment
which are not necessarily clearly reflected in the market
place. Negative externalities occur when a company’s
activities incur losses to other parties or the
environment without there being any compensation for
the losing parties. It is important to identify the costs
and benefits – social, environmental and economic –
through a cost-benefit analysis . Another method of
measuring impacts is through an impact assessment, For
inclusive businesses it is important to have a special
consideration for BoP groups as well as other
marginalised and disempowered groups, such as women.

Photo by Fancycrave on Unsplash

 Case Study: Operations

Economic impact
HBPS has supported families to get out of poverty, by allowing women to start working young and continue
working even after motherhood. When earning money, women invest most of their income in their homes and
families, mainly to provide better housing, education, food and healthcare. Their incomes are spent in local
communities therefore spreading the economic benefits.

Social impact
Rural jobs enhance, rather than disrupt, the social and economic fabric of communities. They keep families intact,
for example. They also improve social cohesion. For example, many women do not know each other before they
start to work together, even if they live close by. When women start interrelate through productive work they
increase their sense of connectedness within their community. Women workers also increase their personal
empowerment and self-esteem. Many women, for example, take more control over who and when to marry, as
well as, when and how many children to have.

Environmental impact
HBPS claims that its activities are environmentally friendly and do not contribute to environmental degradation.

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

Photo by Isabela Kronemberger on Unsplash
 Finance

Costs: Are the main fixed and variable costs

incurred by key resources, key activities and
partnerships.

Revenue: ”A framework for generating

revenues. It identifies which revenue source to
pursue and how to price the value delivered”.
(Inclusive Business Accelerator, 2016).

Source: (Osterwalder & Pigneur, 2010; Lundy, Becx, Zamierowski, & Amrein, 2012;
Inclusive Business Accelerator IBA, 2016; Online Business Dictionary, n.d.)
Photo by Pau Casals on Unsplash
 Case Study: Finance

Costs
HBPS’ main costs are salaries, high-quality raw materials and
building rents from rural centres and Dhaka’s head quarters.
Being conscious that main part of the costs go to salaries, HBPS
designed a strategy to reduce costs while maximising benefits
without compromising quality or productivity. It consists in
allocating as many tasks as possible to the BoP groups in rural
Bangladesh, while allocating higher-skilled tasks to people that
can do them more productively from Dhaka or the UK. Knitting
tools which are often imported to Bangladesh at high prices,
instead of bearing those high costs HBPS decided produce their
own tools and equipment.

Revenues
Most of HBPS revenues comes from product sales. To manage
financial risks, HBPS takes 50% of the ordered value up-front for
buying raw materials, workers’ payments etc. The rest is paid
within 60 days from the date of delivery of the products. Other
sources of income come as donations from partner companies or
organisations.
HBPS generates an average profit of 42% excluding costs for
additional activities, which are covered with the profit money.

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

Photo by Imani on Unsplash
 Case Study: Business Model Canvas

KEY PARTNERS KEY ACTIVITIES VALUE PROPOSITION CUSTOMER RELATIONS CUSTOMERS

-Suppliers of quality materials
- Community leaders
- MNCs with CSR models
- Local or international
development agencies & NGOs
- Marketing & selling
- Production of products & tools
- Administration
- Quality-control
- Recruitment & training
- Packaging & shipping
- Workers welfare facilities
- To customers: Hand crocheted - Samples to new customers -International wholesalers and
and hand knitted children’s toys - Reliable low-volume orders retailers
and clothes, High-consistency, - Customers innovate designs
high-quality and certified
materials.
- To rural women (BoP): fairly
paid, of good quality, flexible
and local employment

KEY RESOURCES IMPACT CHANNELS

- Human resources (incl. BoP - Economic impact - Direct contact
groups) Income increases for families - Website orders
High-quality raw materials and community
-Tools & equipment
-Building facilities - Social impacts
-Knowledge in design, Needs met. Family and
administration, business & community cohesion and
production. enhancement. Increase in
empowerment & self-esteem

COST REVENUE
- Salaries - Product revenues & donations
- High-quality raw materials - 50% of the ordered value up-front
- Buildings rent - 42% profit in average
 Exercise: Business Model Canvas
Answer these key questions to create a business model. Use any case study, real life example or business idea that is
available and inspires you.
KEY PARTNERS KEY ACTIVITIES
• What is the network of • What key activities do
suppliers and others our value propositions,
that makes the business distribution, marketing
work? and revenue streams
• What is our goal in require?
working with them?
KEY RESOURCES
• What key resources do
our value propositions,
distribution, marketing
and revenue streams
require?
COST
• What are the most important costs?
• Which are the most expensive ones?
Source: (Osterwalder & Pigneur, 2010; Inclusive Business Accelerator IBA, 2016)
VALUE PROPOSITION CUSTOMER RELATIONS CUSTOMERS
• Which customer needs
or problems are we • How and with what • For whom are we
solving? message are we reaching to creating value?
• What bundles of our customer segment to • Who are our most
products and services convince them of the value important customers?
are we offering to each we offer?
customer group? • How do we convey it
• What value do we throughout each channel?
deliver to each customer
group?
IMPACT CHANNELS
• What are the impacts, • Through which channels
costs ans benefits we are do our customer segment
causing to the people, want to be reached?
environment and • What type of relationship
economy connected to does our customer
our business? segment expect us to
establish and maintain
with them?
REVENUE
• What is our customer segment really willing to paying for?
• How would they prefer to pay?
APPENDIX
 Inclusive Business Sweden

Inclusive Business Sweden (IBS) is a centre whose mission is to

enable business to meet global development needs. We engage and
support organisations in developing sustainable, innovative and
inclusive business models with the so-called “base of the pyramid”
(BoP) – the 4.5 billion people who live on less than $8 a day. Since
2013, we have been working towards our goals by delivering
collaborative programmes and direct business services, both locally
and globally.

IBS serves as a platform for the acceleration of inclusive business

initiatives globally. We deliver this through three lines of business –
ecosystem management, business services and collaborations for
development. We delivered programmes for and with our clients
and partners including ICEX, Sida, the Asian Development Bank, the
European Union, Unilever, IKEA, Vinnova, Nordic Innovation,
Research Institutes of Sweden, Startup Foundation and the
Stockholm Environmental Institute – just to name a few.
 Exercise: Inclusive Business
Principles
• What is HBPS’S BoP target group?
ANSWER: Poor women that lack of skills and education living in
rural Bangladesh

• What are HBPS’ insights in creating market linkages with their

employees and customers?
ANSWER: To their employees (rural women) they offered fairly
paid, of good quality, flexible and local employment. To their
customers they offered consistency and quality over volume of
handmade products.

• What is a good example of fair and transparent governance?

ANSWER: HBPS has a fair and transparent method for calculating
product prices and fair remuneration to the BoP (rural women),
creating an opportunity for them to negotiate.

• What type of services does HBPS’ offer to their BoP groups?

ANSWER: HBPS offers skills training on crotchet, knitting, and
embroidery free of charge.

• Which stakeholder(s) are involved in HBPS’ inclusive innovation

process?
ANSWER: HBPS’s customers only, since the innovative designs
concern mainly their customers.

Source: (Habibur Rahman, n.d.; McKague, Morshed, & Rahman, 2013)

 Acronyms

BoP: Base of the Pyramid

CSR: Corporate social responsibility
IB: Inclusive Business
IBP: Inclusive Business Principles
MNC: Multi-national corporations
NGO: Non-governmental organisations
NPO: Non-profit organisation
SME: Local or regional small and medium enterprises
 References

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Retrieved from http://www.theimpactprogramme.org.uk/results-measurement-in-the-dfid-impact-fund/
Habibur Rahman. (n.d.). Hathay Bunano Proshikshan Society (HBPS) : A Social Business Enterprise for the Rural Poor Women. Retrieved from
http://growinginclusivemarkets.com/media/cases/Bangladesh_HBPS_2011.pdf
Inclusive Business Accelerator IBA. (2016). Introduction to Inclusive Business.
International Finance Corporation. (2010). Global Consumption Database.
Izumi, O. (2015). New Partnership between Development and Business: Inclusive Business as the After 2015 Agenda. National Graduate Institute for Policy Studies.
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https://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/Inclusive+Business