College of Education

School of Continuing and Distance Education 2016/2017 – 2017/2018

Business Model Canvas

Lecturers: Dr. Samuel C.K. Buame & Mr. Shelter S.K. Teyi Contact Information: skbuame@ug.edu.gh

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Session Overview

• This session will discuss how entrepreneurs can create a blueprint for their businesses using nine (9) key components.

• The 9 components to be discussed are: value proposition, customer segments, customer relationships, channels, revenue streams, key activities, key partners, key resources and cost structure.

Slide 2

Goals and Objectives

• At the end of the session, the student will:

1. Know the various components of the business model canvas.

2. Design a business model

3. Create a company

Slide 3

Session Outline

The main topic to be covered in the session is

The Business Model Canvas

Slide 4

Reading List

• Go to resources and download the Business Model Generation preview (pages 15 of 72 to 46 of 72 are absolutely important).

• Also go to resources and download and the business model canvas poster.

Slide 5

BUSINESS MODEL CANVAS

Topic 1

Slide 6

A business model - Definitions

• A business model describes the rationale of how an organization creates, delivers, and captures value.

• A business model describes all the parts of the company necessary to execute on its mission profitably.

Slide 7

Components of a Business Model

• The business model canvas has 9 building blocks

1. Customer Segments

2. Value Proposition

3. Channels

4. Customer Relationships

5. Revenue Streams

6. Key Resources

7. Key Activities

8. Key Partners

9. Cost Structure

Slide 8

Components of a Business Model (cont’d)

• The first 5 building blocks represent the front while the last 4 represent the back- end of the canvas.

• While the front of the canvas focus on the customer, the back-end deals with all the things that are done “back stage” to ensure that the customer is satisfied/delighted.

1. Customer Segments

2. Value Proposition

3. Channels

4. Customer Relationships

5. Revenue Streams

Slide 9

images by JAM

CANVAS OVERLAY – As developed by Alexander Osterwalder

& Yves Pigneur

OFFER

CHANNELS

CUSTOMER

RELATIONSHIPS

CUSTOMER

SEGMENTS

REVENUE STREAMS COST STRUCTURE

KEY

ACTIVITIES

KEY

PARTNERS

KEY

RESOURCES

1. Customer Segments

• Which customers are you serving?

• How will you do your segmentation – targeting -

positioning?

Slide 11

2. Value Proposition

• What are you offering to your customers?

• What is that getting done for them?

• Do they care about your solution?

• What value do we deliver to the customer?

• Which one of our customer’s problems are we helping to solve?

• Which customer needs are we satisfying?

• What bundles of products and services are we offering to each Customer Segment?

Slide 12

2. Value Proposition

• Problem Statement: What is the problem?

• Technology / Market Insight: Why is the problem so

hard to solve?

• Market Size: How big is this problem?

• Competition: What do customers do today?

• Product: How do you do it?

Slide 13

3. Channels

• How do you want to sell your product?

• Through which interaction points?

• Through which Channels do your customer segments want to be reached?

• How are we reaching them now?

• How are our Channels integrated?

• Which ones work best?

• Which ones are most cost-efficient?

• How are we integrating them with customer routines?

Slide 14

4. Customer Relationships

• How do you Get, Keep and Grow customers?

– Customer acquisition

– Customer retention

– Boosting sales (upselling)

• How will customers hear about your product?

• What relationships are you establishing with

each segment?

Slide 15

5. REVENUE STREAMS

• The strategy the company uses to generate cash from each customer segment –

• What are customers really willing to pay for?

how?

• Are you generating one-off or repetitive

revenues?

Slide 16

6. KEY RESOURCES

• Which resources underpin your business

model?

– Physical

– Intellectual

– Human

– Financial

• Which assets are essential?

Slide 17

7. Key Activities

• The Key Activities Building Block describes the most important things a company MUST DO to make its business model work

Slide 18

8. KEY PARTNERS

• Which partners and suppliers leverage your

model?

• Who do you need to rely on?

• Four different types of partnerships:

• Strategic alliances between non-competitors

• Coopetition: strategic partnerships between competitors

• Joint ventures to develop new businesses

• Buyer-supplier relationships to assure reliable supplies

Slide 19

9. Cost Structure

• The Cost Structure describes all costs incurred to operate a business model.

– Cost-driven

– Value-driven

– Fixed costs

– Variable costs

– Economies of scale

– Economies of scope

Slide 20