Business Model Canvas – Definition

Cite this article as:"Business Model Canvas – Definition," in The Business Professor, updated March 7, 2019, last accessed November 26, 2020, https://thebusinessprofessor.com/lesson/business-model-canvas-definition/.

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Business Model Canvas Definition

Thd business model canvas is a strategic management and lean startup template for developing new or documenting existing business models. It can also be defined as a visual chart with elements describing a firm’s or product’s value proposition, infrastructure customers and finances. It enables firms to align their activities by illustrating potential trade-offs.

A Little More on the Business Model Canvas

The Business Model Canvas (BMC) was proposed by Alexander Osterwalder but after the release of his work in 2008, new canvases for specific niches have appeared. An enterprise can describe its business model using the Osterwalder’s business model design template by using the following factors; infrastructure, key activities and resources, partner network, offering, value propositions, customer segment that is identification by a company on which customer it serves, quantitative price and efficiency, and etc.

On the finances part we look at the cost structure that describes the most important monetary consequences while operating under different business models. Business structures can be classified as either cost-driven or value-driven. Features of these cost structures include; fixed costs (unchanged costs), variable costs, economies of scale, economies of scope and revenue streams. Revenue streams can be generated through; selling of asset, usage fee, subscription fee, lending and leasing of properties, licensing, brokerage fees and advertising

The BMC can be applied in the discussion of business model elements and sketching by printing it out on a large surface hence a hands-on tool that fosters understanding, discussion, creativity and analysis.

Reference for Business Model Canvas

Academic Research on Business Model Canvas

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