What is a business model canvas?

A business model canvas gives you the structure of a business plan in one page. This also describes the rationale of how a company creates, delivers and captures value

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An organisation serves one or several customer segments

Customers comprise the heart of any business model. Without (profitable) customers, no company can survive for long. In order to better satisfy customers, a company may group them into distinct segments with common needs, common behaviours, or other attributes.

A business model may define one or several large or small customer segments. An organisation must make a conscious decision about which segments to serve and which segments to ignore. Once this decision is made, a business model can be carefully designed around a strong understanding of specific customer needs.

Customer groups represent separate segments if:

• Their needs require and justify a distinct offer
• They are reached through different distribution channels
• They require different types of relationships
• They have substantially different profitabilities
• They are willing to pay for different aspects of the offer

• This is the reason why customers turn to one company over another. It solves a customer problem or satisfies a customer need. Each Value Proposition consists of a selected bundle of products and/or services that caters to the requirements of a specific Customer Segment.
• 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? Why would this customer buy my product/service?
• A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs. Values may be quantitative (e.g. price, speed of service) or qualitative (e.g. design, customer experience).