Question

According to Alex Osterwalder, a business model describes the rationale of how an organization creates, delivers, and captures values. Assuming you are going to start a business offering newspapers targeting commuters who travel using Light Rail Transport (LRT), express buses and trains in Manila. Create your business model using the Business Model Canvas per attached.

Answer 1

The business model canvas is a great tool to help you understand a business model in a straightforward, structured way. Using this canvas will lead to insights about the customers you serve, what value propositions are offered through what channels, and how your company makes money. You can also use the business model canvas to understand your own business model or that of a competitor! The Business Model Canvas was created by Alexander Osterwalder, of Strategyzer.

The business model canvas is a shared language for describing, visualizing, assessing and changing business models. It describes the rationale of how an organization creates, delivers and captures value.

1. Customer segments
List the top three segments. Look for the segments that provide the most revenue.

2. Value proposition
what are your products and services? What is the job you get done for your customer?

3. Revenue streams
List your top three revenue streams. If you do things for free, add them here too.

4. Channels
How do you communicate with your customer? How do you deliver the value proposition?

5. Customer relationships
How does this show up and how do you maintain the relationship?

6. Key activities
What do you do every day to run your business model?

7. Key resources
The people, knowledge, means, and money you need to run your business.

8. Key partners
List the partners that you can’t do business without (not suppliers).

9. Cost structure
List your top costs by looking at activities and resources.

The Personal Business Model Canvas can discover and summarize visually their own networks, skills, activities, resources, and value propositions on a great one page canvas. The main advantage of this tool, and of the overall Business Model You approach, is that it encourages people to develop a dynamic view of their career strategy and vision.

Instead of writing a typical descriptive resume, the canvas helps to understand how other people perceive their value. Moreover it can help people trying to give a new orientation to their career to identify opportunities.

When the Personal Business Model Canvas is used for the first time. The building blocks and their associated questions typically help people to (re)discover interesting facts they typically overlook about themselves. Later on, it can be used to expand on certain areas of interest or business ideas the individual may have.

Just for the original Business Model Canvas, people must realize that the canvas evolves in time through iterations. Your own business model is dynamic and changes according to your decisions and development strategy. It is also affected by your values, activities, assets, partners, etc.

Following steps involved:-

(1) Before you start

You can learn a lot from your competition. Choose some competitors and map their business models. Armed with this information you’ll have deep insight into what customers want and what they are willing to pay for. You’ll have a clearer picture of just how customers’ needs are met across the entire industry, not just in your company. And, you’ll uncover vital information about how other businesses, maybe even very successful businesses, have created their own spaces in the market.

⊗  Get the right team of 3-5 people together

⊗  Grab a large chunk of wall space

⊗  Print or draw the canvas on a big sheet of paper
⊗  Have plenty of sticky notes and markers ready
⊗  Allow yourself 45-60 minutes of undisturbed time

(2) High level

Start by mapping out the business on a high level: only the most important, vital aspects of the business model.

(3) Connect the building blocks

Link up the building blocks: every value proposition needs a customer segment and a revenue stream! When everything is on the board, take a step back. Have a short break.

(4) Current state

Don’t mix ideas for a future state with what is going on right now, and don’t mix different departments.

(5) Review

Take a step back check if every customer segment is linked to a value proposition and a revenue stream. Make sure everything on the left side of the canvas is needed to support the right side of the canvas.