Fundamentals of Entrepreneurial Acculturation

(UW00302)

UNIT 4:
BUSINESS MODEL CANVAS
Objectives
Introduce students to the various tools
available in the Business Model Canvas to
facilitate development of effective
business strategies

Develop skills in using a Business Model

Canvas to work on business opportunities
which can then be used to develop a viable
business model
Learning outcomes
Develop generic analytical skills
(identifying, analysing and capturing of
opportunities).

Apply the tools (i.e. SWOT and Business

Model Canvas) in analysing and
developing new business models and
strategies.
List of topics
• Business Model Canvas Components
Introduction
The BMC, introduced by Osterwalder (2008) • . is a method of analysing,
Osterwalder designing, strategizing and testing a business model based on nine
business areas

The strategies are put up on a board so that the entire model can
be seen at once. This will allow the entrepreneur to understand
1 view each of the strategies and relate it easily to the other strategies on
display.

The BMC is a canvas or a chart which includes at least 9 areas or

9 elements in a business model.
Introduction (cont.)
• .
1) Value propositions
2) Customer segments
3) Marketing channels
4) Customer relationships
5) Key partners
6) Key activities
7) Key resources
8) Cost structure
9) Revenue streams
 Unit 4
Business Model Canvas

The 9 areas of
BMC
Area 1:
Firm’s Value Propositions
According to Osterwalder (2008), a company’s value proposition is
what distinguishes itself from its competitors.

Value is provided through various elements

such as newness, performance,
customization, reliability in ‘getting the job
done’, design, brand, price, cost reduction,
risk reduction, accessibility, and
convenience.
Area 1:
Firm’s Value Propositions (cont.)
The following are examples of value proposition concepts and techniques:
USP
Unique Selling Proposition
Focus on what makes product better
than the competition
FAB
Feature-Advantage-Benefit
a process that helps an entrepreneur figure
out what each of the product’s features
means to customers
enables the entrepreneur address their
concerns, desires, wants, and needs.
produce a new products based on the
preferences.
 Solve Speed up
Innovation
problem the process
Area 1:
Firm’s Value
Propositions (cont.) Adding
More
Cost
efficient/eff
value reduction
Summary of value propositions (products / ective
services)

To be
different Unique /
convenience
from other feature
competitors
Area 2:
Marketing SEGMENTATION
Definition:
the target people and/or organizations
you are offering value proposition.

This segmentation will judge your Demographic Psychographic

products / services can brings benefit or
adding value for them

Behaviour

Social
economic Geographical
Area 3:
Marketing channels
Definition :
How you delivery the products or services to the end users or customers.
Procedures delivery the products/services.
Direct Selling
Physical store /
kiosk/ booth

Online Selling

Social media
Marketing Channel

Question
i) Which channels work best?
Delivery services
ii) How much do they cost?
Area 4:
Customer relationships
Definition :
Customer relationships are the types of relationships a company establishes
with specific customer segments. It build connection with the customers.
•What relationship that the target customer expects you to establish?
•How can you integrate that into your business in terms of cost and format?

Offering these items to customers Objective

Coupon Free sample Increase sales

Personal Customer
Loyalty card
assistant retention
Discount Warranty Increase loyal
customers
Area 5:
Key partners
Definition :
Key partners are the network of suppliers and partners that make the
business model work.

Companies forge partnerships to optimize :

1.Business models
2.Reduce risk
3.Acquire resources

• What key resources does your value proposition require?

• Who is your Suppliers , consultant and key partner ?
Area 6:
Key activities
Definition :
Key activities are activities that a company must do in order to make its business
model work.

Key activities are important in any business building block. These activities will
depend on the nature of the business.

Cooking, receive order , cleaning ,

Restaurant
marketing , preparing ingredients.

Web design , marketing , coding

Website company
website.

Packaging , branding , marketing , R &

Beauty product
D , designing.
Area 7:
Key resources
Definition :
Key resources are the most important assets needed to make a
business model work. Every business model requires them, and it is
only through them that companies generate value propositions and
revenues.

What resources are important the most in distribution channels,

customer relationships, revenue stream?

Capital Human talent Distribution

Business partner Patent / Recipe Networking

Area 8:
Cost structure 2 3
Definition : Machinery /
The entrepreneur should strategize Rental / Utilities Equipment
the best and appropriate cost
structure to suit the project
concept.
1

i. What are the most cost in your Salary / wages

business?
ii. Which key resources/ activities
are most expensive? 5 4

Marketing / Cost per unit :

operation cost Product/services
Area 9:
Revenue streams
Definition :
Revenue streams represent the cash a company generates from each
customer/product segment. An entrepreneur will have to strategize
and modify his products and services to create attractive values for
target customers.

• For what value are your customers willing to pay?

• What and how do they recently pay? Cash / COD / credit card
• How much does every revenue stream contribute to the overall
revenues?
Payment : Revenue streams from :
1.cash 1.Selling McD products
2.debit card 2.Catering
3.credit card 3.Event organiser
Summary
The Business Model Canvas has been accepted and used widely for
developing business strategies, both by start-up businesses as well as
established large corporations.

The Business Model Canvas methodology will enable students to learn

how to work out an effective business strategy in a systematic, orderly
and comprehensive manner.
 Summary
https://strategyzer.com/
Thank you
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