BUSINESS MODEL CANVAS
The Business Model Canvas is a strategic management template for developing new or documenting existing business models. It is a visual chart with elements describing a firm's value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.
The Business Model Canvas was initially proposed by Alexander Osterwalder based on his earlier work on Business Model Ontology.
A Business Model Canvas is formal descriptions of the business become the building blocks for its activities. An infrastructure element include key activities, key resources and key partners. Key activities is the most important activities in executing a company's value proposition. Key resources is the resources that are necessary to create value for the customer. They are considered an asset to a company, which are needed in order to sustain and support the business. These resources could be human, financial, physical and intellectual. The key partners is in order to optimize operations and reduce risks of a business model, organization usually cultivate buyer-supplier relationships so they can focus on their core activity. Complementary business alliances also can be considered through joint ventures, strategic alliances between competitors or non-competitors.
Another element is value proposition which is the collection of products and services a business offers to meet the needs of its customers. According to Osterwalder (2004), a company's value proposition is what distinguishes itself from its competitors. The value proposition provides value through various elements such as newness, performance, customization, design, brand/status, price, cost reduction, risk reduction, accessibility, and convenience/usability. The value proposition may be quantitative and qualitative.
Besides that, a customer element include customer segments, channels and customer relationship. Customer segments is to build an effective business model, a company must identify which customers it tries to serve. Various set of customers can be segmented based on the different needs and attributes to ensure appropriate implementation of corporate strategy meets the characteristics of selected group of clients. Channels show that a company can deliver its value proposition to its targeted customers through different channels. Effective channels will distribute a company’s value proposition in ways that are fast, efficient and cost effective. An organization can reach its clients either through its own channels (store front), partner channels (major distributors), or a combination of both. Besides that, a customer relationship is needed to ensure the survival and success of any businesses, so the companies must identify the type of relationship they want to create with their customer segments.
The last element of business model canvas is finance. It contains cost structure and revenue streams. Cost structure describes the most important monetary consequences while operating under different business models. Revenue streams is the way a company makes income from each customer segment.
Example of Business Model for Services (Financial Times)
Example of Business Model for Product (Kerepek)
Or else, to know more about this business model, you can click link at the below...
No comments:
Post a Comment