Business model canvas

The business model canvas is a strategic management template that is used for developing new business models and documenting existing ones. It offers a visual chart with elements describing a firm's or product's value proposition, infrastructure, customers, and finances, assisting businesses to align their activities by illustrating potential trade-offs.

The nine "building blocks" of the business model design template that came to be called the business model canvas were initially proposed in 2005 by Alexander Osterwalder, based on his PhD work supervised by Yves Pigneur on business model ontology. Since the release of Osterwalder's work around 2008, the authors have developed related tools such as the Value Proposition Canvas and the Culture Map, and new canvases for specific niches have also appeared.

Formal descriptions of a business become the building blocks for its activities. Many different business conceptualizations exist; Osterwalder's 2004 thesis and co-authored 2010 book propose a single reference model based on the similarities of a wide range of business model conceptualizations. With his business model design template, an enterprise can easily describe its business model.

Osterwalder's canvas has nine boxes: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. Descriptions below are based largely on the 2010 book Business Model Generation.

The business model canvas can be printed out on a large surface so that groups of people can jointly start sketching and discussing business model elements with post-it notes or board markers. It is a hands-on tool that aims to foster understanding, discussion, creativity, and analysis. It is distributed under a Creative Commons license from Strategyzer AG and can be used without any restrictions for modeling businesses. It is also available in web-based software format.

The business model canvas has been used and adapted to suit specific business scenarios and applications, such as Ash Maurya's Lean Canvas for startup companies.

The business model canvas has been characterized as static because it does not capture changes in strategy or the evolution of the model nor much detail about the interaction between the components and how this makes the model work. Some limits of the template are its focus on organizations and its consequent conceptual isolation from its environment, whether this is related to the industry structure or to stakeholders such as society and natural environment.