FUNDAMENTALS OF

ENTREPRENEURSHIP

BUSINESS MODEL
CANVAS
 DEFINITION
Introduced by Osterwalder (2008) – is a method
of analyzing, designing, strategizing and testing
a business model based on 9 business areas
• Customer segments
• Firm value propositions
• Marketing channels
• Customer relationships
• Key partners
• Key activities
• Key resources
• Cost structure
• Revenue streams
 1. CUSTOMER SEGMENTS
• CS – refers to the target people and/or
organizations you are offering value
propositions
• They can be divided into groups of
individuals or organizations that have
similar demographics, psychographics,
behaviours, geographical characteristics
or combinations
2. FIRM VALUE PROPOSITIONS
 DEFINITION – is what distinguishes itself from its
competitors
 Value is provided through various elements such as
performance, brand, price, risk reduction, accessibility and
convenience
 Can be quantitative (eg. Price) or qualitative (eg. Customer
experience and outcome)
3. MARKETING CHANNELS
 A company can deliver its value to its customers through
different channels
 Decides – whether to sell it through directly (direct
marketing), intermediary
 Example of method are: direct selling, internet marketing
and catalogues
 Simple and straightforward
4. CUSTOMER RELATIONSHIPS
 CR – are the types of relationships a company established
with specific customer segments
 The loyal customer is the most profitable customer yet the
focus is often on attracting new customers
 There are few basic steps to increase sales volume and
build brand value at the same time:
 Pile on the benefits
 Make buying easy
 Follow up
5. KEY PARTNERS
 KP – are the network of suppliers and partners that make
the business model work
 Companies forge partnerships to optimize business model,
reduce risk, acquire resources
 4 types of partnerships are commonly distinguished:
 Strategic alliances between non-competitors
 Competitions: strategic partnerships between
competitors
 Joint ventures to develop new business
 Buyer-supplier relationships to assure reliable supplies
6. KEY ACTIVITIES
 KA – are activities that a company must do in order to
make its business model work
 Key activities are important in any business building block
 These activities will depend on the nature of the business
as seen below:
 Production: production activity dominates the business
models of manufacturing firm, related to design,
manufacture, delivery or quality control
 Problem solving: consultancies, hospitals, focus on
problem solving activities, requiring knowledge
management and staff training
7. KEY RESOURCES
 KR – are the most important assets needed to make a
business model work
 Can be physical, financial, intellectual or human
 Can be owned or leased by the company or acquired from
key partners. They can be categorized as the following:
 Physical
 Intellectual
 Human
 Financial
8. COST STRUCTURE
 The entrepreneur should strategize the best and
appropriate cost structure to suit the project concept
 The cost structured model will have to be aligned with the
other activities to match the total product and services
concept offered to customers
 Ex:
Air Asia model is a low cost model where customers are
charged for products and service items that they choose when
they purchase their ticket. Customer can choose to have food
in flight or select their seats, and will pay accordingly.
9. REVENUE STREAMS
 RS – will represent the cash a company generates from
each customers/product segment
 An entrepreneur will have to strategize and modify his
products and services to create attractive values for target
customers
 An entrepreneur may explore additional revenue streams
through export markets or online marketing for example
to generate additional revenue