50MINUTES - The Business Model Canvas: Let your business thrive with this simple model

All companies dream of holding the keys to success, and the simpler they are, the better! Although this framework does not really take into account the purely competitive aspect, it is still very interesting, practical and accessible to all.

The matrix consists of nine interrelated blocks that illustrate all the activities of a company:

• key activities
• key partnerships
• key resources
• customer segments
• channels
• customer relationships
• value proposition
• cost structure
• revenue streams.

Clearly differentiated and identified, the boxes are carefully and precisely arranged on the canvas. This layout creates synergies between them, resulting in a unique strategy for every company that tries the exercise.

• Key activities. The key activities are essential to the company, since a customer value proposition is created through them, which indirectly generates income. These activities vary, depending on the type of business model. For example, in an insurance company, a key activity is protecting client assets and compensating them in case of loss; a hospital will be responsible for the health of patients. According to Osterwalder, the activities can be classified in three different categories:
  • Those directly related to the manufacturing of a product;
  • Those seeking to develop solutions (services) to meet customer needs;
  • Those that take place, in whole or in part, on the internet (online shopping sites or banks).
• Key partnerships. The saying two heads are better than one is universal and has particular resonance in the professional world, within our companies. Having and maintaining good relationships with carefully selected, competitive and reliable partners strengthens the position occupied by the organisation within its market by reinforcing the business model. The nature of the partnership depends on the companys aims:
  • Subcontracting to foster economies of scale or refocus activities;
  • Mergers to reduce the risk and uncertainty linked to the competitive environment;
  • Acquisition of certain resources and activities which allows some activities to be outsources to other companies. An example of this would be an insurance company that uses an external assessment office to pay claims.

  There are various key partner profiles. Whether the partner is a company or an individual, the important thing is that they provide support, advice, etc., which will facilitate the development of a company: banks, investors, associates, suppliers or even customers, but also competitors.

• Key resources. These are the companys assets, which it relies on and which enable it to maintain its economic activity or successfully carry out its value chain. There is therefore a degree of interdependence between the health of the company both financial and human, intellectual (patents, etc.) or material and the resources available for (re)launching a value proposition. Following this logic, small and medium size businesses will make the most of the relatively small size of their teams (human resources) to focus on regular personal contact with clients. Conversely, an IT company may prefer to focus on material resources such as processors, coolers or warehouses in order to enhance its value proposition.
• Customer segments. The majority of companies owe their prosperity to their customers, who are the driving force behind many economic activities. It is therefore important to know them well, to identify their expectations and to propose an offer that best meets their needs. From these, the organisation establishes customer segments with the same or similar needs and chooses which groups to target in particular.