Business Model Canvas is a strategic management tool used for making new business models and documenting the previous ones. Implementing it makes it easier to convey and explain a business idea or strategy, hence making communication easier within the framework.
The Business Model Canvas visualizes describes and asses the changing dynamics of Business Management. It even frames the modules that how an organization or company produces, manages and delivers value.
How founders should use the Business Model Canvas
Have a look at these quick steps used in the Business Model Canvas;
Let’s have a detailed look;
Consumer Sections
This section figures out different customers clients are targeting and this division can be based on their specific ideologies which can be gender, age, liking habits and interests. Market size also comes up as an important factor while formulating different consumer sections, this will help clients understand the basics and in-depth needs of their customers. And, one such tool is Persona Canvas which will be helpful in developing consumer relations and creating different personas for each of their customers.
Value Relations
It comes up as a fundamental concept for any business organization. It becomes important to understand the customer with whom the clients are dealing and the requirements they are pitching for. Then one may analyze all the factors and see if the product or service fits the same parameter or not.
Questions one may ask while adding value to their product/service;
- What is the error we are fixing?
- What are customers’ expectations from the product?
- What is the utmost source for this problem?
Revenue Flows
Revenue flows involve the money that is generated by the customer section, it encompasses the revenue flow in a business. Revenue flows can be determined when it will be proclaimed, and how much the targeted audience would pay, thus one can lead the process further and determine other processes in a business.
How to choose the appropriate Revenue Flows;
- Choose the most appropriate stream.
- Increase your value.
- Attract the most determined.
- Be flexible in your actions.
Channels
Channels are mediums through which an organization communicates. It also analyzes which pathway our company uses to reach our customers.
Questions to consider while determining the channels to reach your customers;
- Where our customers are?
- How do we convey our consumer section about our value prepositions?
- Are our customers on Social Media?
Examples of Channels
- Electronic Mail
- Social Media
- Search Engine Optimization (SEO)
- Search Engine Marketing (SEM)
- Blogs Targeting
- PR
- Content Marketing
- Online/ Offline Marketing
There are many more examples of channels that could be listed.
Customer Relations
After adding value to the product/Service and knowing the customers, it becomes important to develop an understanding with the customers and build healthy relations with them. It depends on the type of business one is dealing with if interacting with the customers in person or online.
Some examples are;
- Phone
- In-person meeting
- Online
- Events
- Third-Party Contractors
An in-depth analysis should be made of the demand of the customers and what they actually need, and then accordingly entire framework should function.
Prime Activities
The prime activities of the organization are the framework that the business takes to get the value relations for the consumers.
Questions to consider;
- Resources used?
- Technical development required for the key activities?
- Product Distribution?
Key Resources
The next approach should be the listing of resources that are required for the business model canvas to proceed.
Here are some basic resources listed to execute your business plans;
- Staff
- Office Space
- Computer Systems
- Internet Connection
- Electricity
- Mediums of travelling
Key Allies
Key allies are the business partners/suppliers/parties whom one would need to execute the business product or service. For e.g. If we are dealing with bakery items then we need regular suppliers to deliver the raw materials. They are responsible equally to get the value of our product as promised to the customers.
Cost Analysis
Cost structure analyses the cost involved while operating all managerial tasks in a business this includes- infrastructure, employees, other costs etc.
Where main costs lie;
- Key Allies
- Key Resources
- Channels
- Customer Relations
This in-depth analysis of all the fragments would be helpful for you to analyze the visualizing of the Business Model Canvas and how it works in an organization.
Real-time Case Studies
To get the points more clear let’s have an understanding of an organization’s Business Model Canvas and how the entire mechanism works.
Read the Business Model Canvas of Swiggy
Conclusion
We hope this program guide will be helpful for you to get an insight into a Business Model Canvas and how the entire mechanism works in the market domain. It is an efficient tool for Strategic Management which looks after the major business plans.
And, one can join Strategic Management Courses to get in pace with the new age trends and develop these skills to lead the businesses.