Business Model Canvas

The Business Model Canvas is a powerful tool that explains the rationale behind creating, delivering, and attracting value in an organization.

It provides a common language for describing and managing business models effectively, which can create new strategic alternatives. Having a common language makes it easier to challenge assumptions about a business model and innovate successfully and systematically.

The FLAME Foundation is committed to helping businesses succeed and reach their goals. One way we accomplish this is by providing a clear and concise explanation of the business model concept, which highlights the business model's innovative nature and fosters meaningful dialogue among various business entities. The business model serves as a blueprint, guiding organizations in implementing effective strategies within their structures, processes, and systems.

You can download the Business Model Canvas by clicking here.

Business Model Canvas Building Blocks

Key Partnerships (KP)

Key Activities (KA)

Key Resources (KR)

Value Propositions (VP)

Customer Relationships (CR)

Channels (CH)

Customer Segments (CS)

Cost Structure (CS)

Revenue Streams (RS)

Business Model Canvas

Key Partnerships

(KP)

Key Partnerships (KP) refer to the network of suppliers and partners that make the business model viable.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. Who are your Key Partners?
2. Who are your Key Suppliers?
3. What Key Resources are you receiving from your partners?
4. What Key Activities are performed by partners?

Types of Key Partnerships:
- Strategic alliances between non-competitive entities
- Coopetition: strategic partnerships between competitors
- Joint ventures to develop new businesses
- Buyer-supplier relationships that ensure a reliable supply

Key Activities

(KA)

Key Activities (KA) refer to the most important actions a company must undertake to make its business model work.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What Key Activities do your Value Propositions require?
2. What are the Key Activities required for your Distribution Channels to function effectively?
3. What are the Key Activities needed for your Customer Relationships?
4. What are the Key Activities required for your Revenue Streams?

Types of Key Activities:
- Production
- Problem solving
- Platform/network

Key Resources

(KR)

Key Resources (KR) are the most important assets for a business model's performance.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What Key Resources are needed to support your Value Propositions?
2. What Key Resources are required by your Distribution Channels?
3. What Key Resources are necessary for your customer relationships to flourish?
4. What are the Key Resources necessary for your Revenue Streams?

Types of Key Resources:
- Human
- Intellectual
- Financial
- Physical

Value Propositions

(VP)

Value Propositions (VP) are the products and services that create value for a specific Customer Segment.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What Value do you provide to customers?
2. What issues are you assisting your customers in resolving?
3. What customer needs are you addressing?
4. What is the range of products and services you provide each Customer Segment?

Here are some common elements that can help create value for customers:
- Novelty
- Performance
- Customization
- Design
- Brand
- Price
- Cost reduction
- Risk reduction
- Accessibility
- Convenience

Customer Relationships

(CR)

Customer Relationships (CR) refer to the types of relationships that a company establishes with specific Customer Segments.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What kind of Customer Relationships does each Customer Segment expect you to establish and maintain?
2. Which Customer Relationships have you established?
3. How costly are they?

Types of Customer Relationships:
- Personal assistance
- Dedicated personal assistance
- Self-service
- Automated services
- Communities

Channels

(CH)

Channels (CH) are the means through which a company delivers a Value Proposition to its Customer Segments.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What are the preferred communication Channels for your Customer Segments?
2. How are you currently targeting your Customer Segments?
3. What are the most effective and cost-efficient Channels to use?

Types of Channels:
- Personal channel
- Partner channel

Customer Segments

(CS)

Customer Segments (CS) represent the specific customer groups a company aims to reach with its products and services.

Asking questions and answering them is the key to business success. Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. Who is the target group for the value you are creating?
2. Who are your most important customers?

Types of Customer Segments:
- Mass market
- Niche market
- Segmented
- Diversified
- Multi-sided platforms

Cost Structure (CS)

Cost Structure (CS) refers to all the expenses incurred in business model operations.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What are the most significant expenses associated with your business model?
2. What Key Resources and Key Activities are the most expensive?
3. Is your business driven by cost or value?

Cost Structure can have the following characteristics:
- Fixed costs
- Variable costs
- Economies of scale
- Economies of scope

Revenue Streams (RS)

Revenue Streams (RS) represent the cash generated from each Customer Segment. The earnings are calculated by subtracting the costs from revenues.

Consider the following questions and answer them as thoughtfully and comprehensively as possible:
1. What value are your customers willing to pay?
2. What do your customers currently pay?
3. How are your customers currently making payments?
4. What is the contribution each Revenue Stream makes toward the overall revenues?

Types of Revenue Streams:
- Asset sale
- Usage fee
- Subscription fees
- Lending/Renting/Leasing
- Licensing
- Brokerage fees
- Advertising