Business Model Canvas

What the Business Model Canvas delivers

The Business Model Canvas shows a business model on a single page. Nine blocks describe how a business creates value, how it brings that value to the customer and how it earns from it. The benefit lies in completeness: anyone filling all nine blocks notices which one they had not considered. That gap is the real return of the method.

The nine blocks

Customer segments: who the customers are and which groups behave differently. Value proposition: which problem the offer solves and why the customer should buy it here. Channels: through which routes the customer learns of the offer and buys. Customer relationship: how the customer is won, kept and developed. Revenue streams: what the customer pays for and in which form.

Key resources: what is absolutely needed, such as ERP, stock or the brand. Key activities: what the business has to do itself. Key partners: who supplies, who operates, who refers. Cost structure: which costs are fixed and which rise with revenue.

How it is used in online retail

• For new undertakings: before building a new channel or assortment, the canvas shows which blocks change and which stay untouched.
• For stocktaking: a completed canvas shows whether the channels match the customer segments or whether a group is addressed through a channel that does not fit it.
• For distinction: two canvases side by side show whether an undertaking is a new business model or an extension of the existing one.
• For communication: a single page can be discussed in one meeting. A slide deck cannot.

Where the method stays too coarse

The first point is missing depth. The canvas shows that a cost structure block exists, not how high the costs are. A decision needs figures the canvas does not deliver. It is therefore a frame and not a calculation.

The second point is missing weighting. All blocks appear equally important, although in practice a few decide the outcome. The third point is the missing time dimension: the model describes a state, not the development towards it. The fourth point is the danger of completeness: anyone filling all blocks finely has invested a lot of time and decided nothing.

In practice that means using the canvas as groundwork and then moving to the numbers. A filled canvas without a subsequent calculation is diligence without a result. Anyone needing the figures finds them under contribution margin.

Frequent questions

• How long does it take? A first draft in about an hour.
• Who should take part? Several areas, otherwise blocks will be missing.
• Does it replace a business plan? No, it is the first page of it.