MODULE 3: BUSINESS MODEL CANVAS (BMC)

Learning Objectives

By the end of this module, participants are expected to;

1) Understand the term Business Model Canvas

2) Know the important of Business Model Canvas

3) Learn the key sections of Business Model Canvas

4) Develop a Business Model canvas for their business

DEFINING THE BMC

A business model canvas is a visual representation of a business model, highlighting all key
strategic factors. In other words, it is a snapshot of general, holistic and complete
overview of the company’s workings, customers, revenue streams and more.

IMPORTANCE OF A BUSINESS MODEL CANVAS

The Business Model Canvas holds significant importance for businesses due to several
reasons:

• Clarity and Simplicity: The BMC chart provides an overview of the business in a
much simpler format where one is able to understand all the key components of
the business model at first glance.

• Strategic Planning: By mapping out their current operations and reviewing their
model of business based on prevailing market trends, businesses are able to
revisit the canvas and make strategic business plans to adjust, adapt and improve
their operations.

• Communication Tool: A well-developed BMC serves as a much simpler

communication tool to team members, potential investors, partners, and other
stakeholders about the overall model and its objectives.
 • Identifying Opportunities and Risks: A BMC adopts a systematic approach of
analysing all key components of the business model and through proper
examination of all key components, you are able to identify potential
opportunities to utilize as well as risk and challenges that need to be avoided or
mitigated.

• Iterative Improvement: This document encourages Iteration due to its Flexibility

since it is not a static document. Based on feedback received, market changes,
competition analysis and other new insights, the business model can easily be
revised by revisiting the sections of the BMC

COMPONENTS OF BUSINESS MODEL CANVAS (BMC)

The BMC consists of 9 interlinked sections that collectively provide a business with a
comprehensive overview of the model. Below is the BMC template with an explanation of
all the sections that need to be completed;
BUSINESS MODEL CANVAS TEMPLATE

Key Partnerships (8) Key Activities (6) Value Propositions (2) Customer Relationships Customer Segments (1)
(4)

Key Resources (7) Channels (3)

Cost Structure (9) Revenue Streams (5)

 1. Customer Segments: Identifies the different groups of customers or market
segments that the business aims to serve.

2. Value Proposition: Describes the products or services offered by the business and
the value they deliver to customers.

3. Channels: Specifies the channels or pathways through which the business reaches
and interacts with its customers.

4. Customer Relationships: Defines the types of relationships the business

establishes and maintains with its customers to enhance satisfaction and loyalty.

5. Revenue Streams: Outlines the sources of revenue generated by the business

from each customer segment.

6. Key Resources: Lists the essential assets, capabilities, and resources required to
deliver the value proposition and operate the business.

7. Key Activities: Describes the core activities and operations necessary to execute
the business model effectively.

8. Key Partnerships: Identifies external partners, suppliers, or alliances that

contribute to the business's value creation and delivery.

9. Cost Structure: Breaks down the costs and expenses incurred by the business to
operate and sustain its activities.

Summary of the Business Model Canvas

When completing the BMC, you need to critically analyse your business and ask yourself
questions that will help in thoroughly reviewing all important components of the BMC.
Below is a BMC template with guiding questions when attempting to complete the
sections.
MODULE ACTIVITY

Developing the Business Model Canvas

At the end of this module, all participants are required to develop business model canvas
for their business on their own.
Key Partnerships Key Activities (7) Value Propositions (2) Customer Relationships (4) Customer Segments (1)
(8) What Key Activities What values do we deliver to the What type of relationship customers
do our Value customer? do expect? Costly?
For whom are we creating value?
Who are our Key Propositions require? Which one of customer’s problems are How does it integrate
Who are our most important
Partners? Our Distribution we helping to solve? with rest of the BMC?
customers?
Who are our key Channels? Customer Which customer
suppliers? Relationships? needs are we
Which Key Resources are acquiring Revenue Streams? satisfying?
from partners?
Which Key Activities do partners
perform? Key Resources (6) Value proposition Channels (3)
may come from
What key Through which channels do our
- newness (fresh harvest),
Resources do our - cost reduction (special price) customers want
Customer groups represent different
- performance (easy cook), segments, if:
Value Propositions to be reached
Four types of possible partnerships: - customization (organic, cleaned), - their needs require and justify a
- Strategic Alliances- between non- require? - - convenience/usability (special and cost-
distinct offer,
competitors packaged),
The Distribution Channels? Customer efficient? - they are reached through different
-Coopetition – between competitors - price (supermarkets, special distribution channels,
-Joint ventures to develop new Relationships? provision stores, mobile banks), and Are we integrating them with
- they require different types of
businesses - risk reduction (service guarantees)
Revenue Streams? customer routines? relationships,
-Buyer supplier relationships to
-they have different profit earning
assure reliable supplies
potentials, and
-they are willing to pay for unique
offers.

Cost Structure (9) Revenue Streams (5)

For what value are the customers willing to pay?
For what do they pay? How do they currently pay?

What are our most important costs inherent in our business model? What is the payment preference?

Which Key Resources are most expensive? How much does each Revenue Stream contribute to overall revenues?

Which Key Activities are most expensive?