Business Model Canvas

Why should you use the Business Model Canvas?

In this day and age where environments are becoming increasingly complex and fast-changing, companies need to change the way they manage innovation. The very nature of competition is rapidly changing, and to maintain a competitive market position, a business needs to have the ability to frequently develop valuable new products, services or experiences for their customers. This can be achieved by bringing some structure into the innovation process - The Business Model Canvas is a great tool for doing this as it creates a snap-shot of the commercial logic around a specific idea at any one time. By quickly creating a visual picture of the business, a shared understanding can be generated and everyone can see how all the different factors fit together.

By using the Business Model Canvas, a common language is created which makes internal communication easier and more focused. In turn this helps to stimulate innovation thinking and thus improves the quality of internal discussions. The Business Model Canvas can change the way people see, think about and function with innovation by using a set of nine elements to map the key factors and show how they interact and relate to each other – all in the same picture. This one page plan enables an idea to be brought to life in a very short period of time. The beauty of the Business Model Canvas is that you want to make it as simple as possible – you are not thinking about the end solution here, you are holistically thinking about the problem you are trying to solve. All it takes is four simple steps:

Step 1: Brainstorm all the key Business Model factors (I find it easiest to use post-it notes here). Write down all the good and bad aspects, the resources used, the USP etc.

Step 2: Put post-it notes into the nine Business Model Canvas sections to create a highly visual map. These sections are key partners, activities and resources, the cost structure, the value propositions, the revenue streams, the channels and customer relationships and segments.

Step 3: Discuss what does/doesn’t make sense, and add further key factors to the canvas.

Step 4: Now consider the key components that link these factors together, for instance brand build, relationships and emotions, and the supply chain and production.

The case study of Nespresso is a great example to show the value the Business Model Canvas tool can deliver as it helped transform the company from being the pioneer and trendsetter for portioned coffee into a worldwide reference. 

By creating a Business Model Canvas of their key factors, Nespresso were able to create a unique Business Model which enabled them to guarantee the quality of their coffee at every stage of their sourcing, production and distribution.  As a result, Nespresso are able to maintain a direct relationship with their consumers, and now holds a global market share of over 21% in the segment of espresso & filter portioned coffee machines.

Download your own copy of the Business Model Canvas today and improve the way you manage your innovation - http://www.businessmodelgeneration.com/