The Business Model Canvas: How to Create a Sustainable Business Model

A solid business model is essential for the success of any company. However, many entrepreneurs struggle to clearly define their value proposition, customers, and revenue streams.

The Business Model Canvas (BMC), created by Alexander Osterwalder, is a visual tool that helps structure businesses clearly and efficiently.

What is the Business Model Canvas?

The Business Model Canvas is a strategic framework composed of nine key building blocks that describe how a company creates, delivers, and captures value.

Instead of a lengthy and bureaucratic business plan, this tool allows for a quick visualization of all critical business aspects, facilitating adjustments and improvements.

The 9 Building Blocks of the Business Model Canvas

• Value Proposition
  What differentiates your company from the competition? What problem does it solve or need does it fulfill for customers?
  Example: Uber provides fast and affordable transportation without the need to own a car.

• Customer Segments
  Who are your ideal customers? Are there different customer groups that require distinct approaches?
  Example: Netflix has different segments, such as individual consumers and companies that offer the platform as an employee benefit.

• Distribution Channels
  How does the company deliver its value proposition to customers? What are the most effective channels (physical store, online, direct distribution, etc.)?
  Example: Apple sells its products through its own stores, retailers, and online.

• Customer Relationships
  How does the company maintain and strengthen its relationship with customers? Is customer service personalized, automated, or community-driven?
  Example: Amazon uses a personalized recommendation system to retain customers.

• Revenue Streams
  How does the company generate revenue from its value proposition? Subscription model, direct sales, advertising, commissions?
  Example: Spotify has a free, ad-supported model and a paid premium version.

• Key Resources
  What essential assets are needed to operate the business model? Technology, patents, brand, strategic partnerships, human capital?
  Example: Coca-Cola's brand and secret recipe are its primary resources.

• Key Activities
  What are the essential operations to deliver the value proposition? Production, marketing, customer service, distribution?
  Example: Zara focuses on fast production and distribution of new collections.

• Key Partnerships
  Who does the company need to collaborate with to succeed? Suppliers, distributors, strategic alliances?
  Example: McDonald's relies on agricultural producers and ingredient suppliers to maintain its products.

• Cost Structure
  What are the main operational costs? Is the model focused on cost reduction or high-value offerings?
  Example: Ryanair focuses on reducing operational costs to offer low-cost flights.

How to Apply the Business Model Canvas to Your Company?

1. Draw the Canvas
   Use a board or large sheet and divide it into the 9 blocks.

2. Fill in Each Block
   Answer the key questions for each segment.

3. Validate Assumptions
   Test ideas before investing time and money.

4. Adjust as Needed
   The business model should not be static but evolve with the market.

Practical Example: Applying the Canvas to an Online Store

A sustainable clothing online store could fill in the Canvas as follows:

• Value Proposition: Eco-friendly and ethical clothing at affordable prices.
• Customer Segments: Young consumers conscious of sustainability.
• Channels: Own website, social media, and marketplaces.
• Customer Relationships: Personalized support via chat and email.
• Revenue Streams: Direct sales on the website and sustainable fashion subscriptions.
• Key Resources: Brand, sustainable suppliers, e-commerce technology.
• Key Activities: Stock management, digital marketing, and logistics.
• Key Partnerships: Organic fabric suppliers and influencers.
• Cost Structure: Production, storage, shipping, and digital advertising.

Conclusion

The Business Model Canvas is a powerful tool for defining, validating, and adjusting business models quickly. With a clear visual framework, companies can identify opportunities, test assumptions, and adapt rapidly to market changes.

If you want to structure or improve your business, start with the Canvas and turn your ideas into a well-defined and sustainable model.