Name: Parigya Singh.

Subject: Entrepreneurship.
Semester: 4th.

Topic: Business Model Canvas

Definition:
The business model canvas is a strategic management template, which is used to develop new
business models and document the ones in use. It was created by Alexander Osterwalder, in
2005.
It is great tool to understand a business model in a straightforward, structured way. It is by
using this canvas, a business may get insights on the customers being served, what value
propositions are offered through what channels, and ways through which the business is
making money.
The business model canvas is a shared language for describing, visualizing, assessing, and
changing business models. It tries to define the rationale of how an organization can create,
deliver, and capture value.

Elements:
The following nine ‘building blocks’ of the business model design templated were the
foundation of the business model canvas,
 1. Customer Segments: The segment of customers which provides the maximum
revenue, or the target audience, is listed in this section, the top three are preferred.
2. Value Proposition: The offerings by the business are placed here, the jobs that are
being done for the customer is defined in this section.
3. Revenue Streams: Sources of revenue are elaborated upon, in this section, if there
are any free offerings, they are enlisted here as well.
4. Channels: The mode of communication with the customers, and the method of
delivery of value proposition is the highlight of this section.
5. Customer Relationships: This section focusses upon different ways of maintaining
relationship with the customer and ways of acquiring new customers.
6. Key Activities: This section details the day to day activities of the business.
7. Key Resources: The people, knowledge, means and money needed to run the
business are enlisted in this section.
8. Key Partners: Except for the suppliers, who all are the other indispensable partners
of the business, are highlights of this section.
9. Cost Structure: This section defines the cost associated with the allocation of
resources and operating different activities of the business.

Application:
The business model canvas can be printed out on large surface so that groups of people can
jointly start sketching and discussing business model elements with post it notes or board
markers. It is a hands on tool that fosters understanding, discussion, creativity, and analysis.

Example:
To further understand it better, the following example of the world’s largest search engine,
‘Google’, would help in creating better visualization of this canvas,
Key Takeaways:
 A large chunk of Google’s revenue comes from advertiser customer segment, ads of
whom either appear on search results or web pages.
 It helps Google in subsidizing a free offering to the other two customer segments:
search users and content owners.
Based on the nature of activity there can be multiple interpretations of this canvas, which
depends on the perception of different individuals.