Business model canvas

The business model canvas is a one-page framework for describing how an organisation creates, delivers and captures value. Its nine connected building blocks make the operating logic of a venture visible, giving teams a common language with which to examine an existing model, compare alternatives and design a new one.

When to use it

Use the canvas when a group needs to understand how a business works as a whole rather than discuss products, customers, operations and economics in isolation. It is particularly useful for:

• designing a new venture or proposition;
• diagnosing weaknesses or inconsistencies in a current model;
• turning strategic options into concrete operating alternatives;
• comparing competitors on a like-for-like basis; and
• recording hypotheses that can be tested before major investment.

The visual format helps participants see how changing one element—for example, the customer segment—affects channels, capabilities, partners, revenue and cost elsewhere in the system.

Origins

Alexander Osterwalder developed the framework through his doctoral research at the University of Lausanne. His two thousand and four thesis, The Business Model Ontology, synthesised earlier business-model research into a structured description of how firms operate. Osterwalder and Yves Pigneur then refined the framework collaboratively with practitioners and presented the now-familiar nine-block canvas in Business Model Generation (2010). Its design-science roots explain its emphasis on a shared visual language that can be applied, tested and revised.

What it is

The canvas places the value proposition at the centre. Customer-facing choices sit on one side, the infrastructure needed to deliver them on the other, and the financial consequences run along the base. The model is valuable because the nine blocks are not independent boxes: together they must tell a coherent story about who receives value, how it reaches them and why the economics can work.