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Canvas Model

A business model describes the logic of how an organisation creates, delivers and assumes value. According to the author, a business model consists of nine elements: See example

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Customers: The group of people at whom the product/service is targeted. They are the basis of the business and perfect familiarity with them is therefore necessary.

Value proposition: This involves the pain statement resolved for customers and the response given in the form of products and/or services. It explains the product/service offered to customers.

Distribution channels: These focus the way in which the value proposition is delivered to customers (to each segment). It involves determination of how to communicate, reach and deliver the value proposition to customers.

Customer relations: This is one of the most critical aspects in the success of a business model and one of the most complex to make tangible. Different types of relations can be established with specific customer segments.

Sources of income: They represent the way the company generates revenue from each customer. Income can be attained either directly or indirectly and in single or recurrent payments.

Key resources: These describe the most important resources required for the business to operate as well as their type, amount and intensity.

Key activities: Definition of the value proposition requires the development of a series of key internal activities (production, marketing processes, etc.)

Key partnerships: These refer to the partnerships necessary for confident implementation of the business model. They complement capabilities and optimise the value proposition: co-creation is currently essential in business.

Cost structure: This refers to all the costs incurred in running the business model. It involves knowledge and optimisation of costs with a view to designing a sustainable, efficient and scalable business model.

In 2010, Alex Osterwalder designed the Business Model Canvas, a format that displays the business model using these nine fields on a single sheet. This yields a document that provides a direct overview (a 'helicopter view') of the business idea and clearly shows the interconnections among different elements.