Nowadays running a business is challenging due to rapidly changing trends such as technology and customer behavior. Therefore, business owners must have effective plans to run operations continuously and stably. There are numerous ways to plan a business. I will introduce the Business Model Canvas or business model, a popular technique. It is widely used by everyone from beginners to entrepreneurs of large companies. But what a business model canvas is? How to create a business model canvas? Let’s find out together on this blog!
What is a Business Model Canvas?
Business Model Canvas or business model is a strategic tool. It is used to analyze and explain the business's operating model to those within the organization to provide a deeper understanding. In addition, this business strategy canvas was invented by Alexander Osterwalder and Yves Pigneur and is now a popular tool for startups, major corporations, and entrepreneurs.
The Business Model Canvas is a tactical instrument that entrepreneurs and companies can use to analyze and clarify their company's operating model to individuals inside the company to foster a deeper understanding.
How to create a business model canvas?
After knowing what the Business Model Canvas is, in this chapter, I would like to take you through each of the elements that make up the Business Model Canvas.
1. Key Partners
Key partners in business model canvas are cooperating with third parties. Building relationships with partners is a crucial component in conducting business because it allows procuring various resources easier including technological resources, distribution channels, and funds. This reduces risk and increases the opportunity to access the market and attract new customers. For example, an online shopping business should have a transportation partner who offers a modern and secure payment system to help the business run smoothly.
2. Key Activities
Key Activities or the main activities of business operations are delivering products and services to consumers, which focuses on creating value and providing a memorable experience to consumers. Details of Key Activities relate to the production, design, and delivery methods of products, as well as thinking through and looking for novel approaches. To solve problems for consumers, you can employ innovation and technology. For instance, a restaurant where consumers have to wait in line for many hours can apply online reservation technology to deal with that problem.
3. Key Resources
Key Resources is essential assets that will drive business to the goal. Resources can be physical resources, intellectual property, or human resources. For example, coffee shop should have a high quality of coffee beans as a key resource.
4. Value Proposition
Value Proposition or the highlight of products and services in the business model canvas means analyzing the strengths of the business's products and services. Businesses can look back at their own products and services to identify the strengths they have. Is it capable of resolving customer issues? Most importantly, they need to examine even more how their business stands out from competitors to pick up specific business strengths that can be developed in the future.
5. Customer Relationship
Customer relationships in the business model canvas refers to a variety of relationships, such as providing assistance with the details of products, after-sale services, or when a customer registers to become a subscriber. Other moments that businesses can link together within the community of customers are a page on Facebook, self-service automation via other platforms like LINE, etc. These instances are some approaches to have an engagement with customers.
6. Customer Segments
Running a business, you may find it difficult to connect with your target market if you don't know the people you serve well enough. Because of that, grouping clients based on behavior, gender, age, profession, and income will improve the effectiveness of your business communications.
7. Channels
Channels are the process of selecting the most effective means to present your products or services in order to reach your target audience and accomplish your goal. These approaches include the way you deliver brand value to customers, the way you sell products and services both online and offline to facilitate customers, and many more. Furthermore, every channel offers a different advantage. For instance, an SEO website, a digital channel, can draw customers or even business partners from searching for keywords related to your products or services. Choosing the right channels is critical for business success.
8. Revenue Streams
Revenue Streams in the business model canvas serve as a channel that can make money for the business via selling a range of products or services, including monthly subscription income, revenue from signal rentals, and revenue from advertising. To professionally plan and manage those revenues, the business owner needs to go back and examine the primary sources of the company's income.
9. Cost Structure
Another fundamental element in the business model canvas analysis is Cost Structure. It is a tool that will display all of the costs and the company's expenses in great detail. The components of the cost structure include:
Fixed Costs: These are expenses that do not change according to production volume or service provision, such as office space rental, building rental, equipment rental, etc.
Variable Costs: These are expenses that can change based on the amount of production or service provided, such as materials, labor costs, production costs in process, etc.
Other Expenses: These are expenses that are charged in addition to fixed costs and variable costs, such as advertising and marketing costs and additional service fees like outsourcing, etc.
Analyzing cost structures enables business owners to understand the relative importance of each element and how costs are impacted by it. This information can be used in company planning to enhance workflow and boost productivity.
Examples for Business Model Canvas
By this point, you may have an understanding of what is business model canvas and how to create a business model canvas. Next, for you to see a vast image of the Business Model Canvas I will guide you through the three business model canvas with examples.
Business Model Canvas ตัวอย่างจาก Amazon
Business Model Canvas ตัวอย่างจาก Netflix
Business Model Canvas ตัวอย่างจาก Starbucks
Business Model Canvas is an important tool that has a visual representation of a business model. It helps small and big companies all over the globe to plan more efficiently and brings about quick improvements. According to the three examples for business model canvas analysis above, you will see that they provide companies with in-depth and holistic details of the relationships between various business elements. As a result, Business Model Canvas allows businesses to clearly define key factors that affect business success.
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