What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who
your customer base is and how you deliver value to them and the related details of financing. And the
business model canvas lets you define these different components on a single page.

The Business Model Canvas is a strategic management tool that lets you visualize and assess your
business idea or concept. It’s a one-page document containing nine boxes that represent different
fundamental elements of a business.

The business model canvas beats the tradi onal business plan that spans across several pages, by
offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not
under your control) while the le side of the canvas focuses on the business (internal factors that are
mostly under your control). In the middle, you get the value proposi ons that represent the
exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and
introduced in their book ‘Business Model Genera on’ as a visual framework for planning, developing
and tes ng the business model(s) of an organiza on.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers
several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and
structured approach to designing, analyzing, op mizing, and communica ng your business model.

 The business model canvas provides a comprehensive overview of a business model’s

essen al aspects. The BMC provides a quick outline of the business model and is devoid of
unnecessary details compared to the tradi onal business plan.

 The comprehensive overview also ensures that the team considers all required components
of their business model and can iden fy gaps or areas for improvement.

 The BMC allows the team to have a holis c and shared understanding of the business model
while enabling them to align and collaborate effec vely.

 The visual nature of the business model canvas makes it easier to refer to and understand by
anyone. The business model canvas combines all vital business model elements in a single,
easy-to-understand canvas.

 The BMC can be considered a strategic analysis tool as it enables you to examine a business
model’s strengths, weaknesses, opportuni es, and challenges.

 It’s easier to edit and can be easily shared with employees and stakeholders.

 The BMC is a flexible and adaptable tool that can be updated and revised as the business
evolves. Keep your business agile and responsive to market changes and customer needs.

 The business model canvas can be used by large corpora ons and startups with just a few
employees.
  The business model canvas effec vely facilitates discussions among team members,
investors, partners, customers, and other stakeholders. It clarifies how different aspects of
the business are related and ensures a shared understanding of the business model.

 You can use a BMC template to facilitate discussions and guide

brainstorming brainstorming sessions to generate insights and ideas to refine the business
model and make strategic decisions.

 The BMC is ac on-oriented, encouraging businesses to iden fy ac vi es and ini a ves to

improve their business model to drive business growth.

 A business model canvas provides a structured approach for businesses to explore

possibili es and experiment with new ideas. This encourages crea vity and innova on,
which in turn encourages team members to think outside the box.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your
company together to collaborate. It is be er to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, s cky notes, and markers, using
an online pla orm like Creately will ensure that your work can be accessed from anywhere,
any me. Create a workspace in Creately and provide edi ng/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and
visualize in the business model canvas. Narrow down the business or idea you want to analyze
with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sec ons to represent the nine
building blocks of the business model canvas.

Step 4: Iden fy the key building blocks Label each sec on as customer segment, value proposi on,
channels, customer rela onships, revenue streams, key resources, key ac vi es, and cost
structure.

Step 5: Fill in the canvas Work with your team to fill in each sec on of the canvas with relevant
informa on. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the
rela onships to iden fy strengths, weaknesses, opportuni es, and challenges. Discuss
improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your
business model with stakeholders. You can also use the model to make informed and strategic
decisions and guide your business.

Use Strategyzer Business Model Canvas to visualize and design company’s business model in a
simple, structured format.

Defini on of the McKinsey 7S Model

McKinsey 7S model is a tool that analyzes company’s organiza onal design by looking at 7 key
internal elements: strategy, structure, systems, shared values, style, staff and skills, in order to
iden fy if they are effec vely aligned and allow the organiza on to achieve its objec ves.

What is the McKinsey 7S Model

McKinsey 7S model was developed in the 1980s by McKinsey consultants Tom Peters, Robert
Waterman and Julien Philips with help from Richard Pascale and Anthony G. Athos. Since its
introduc on, the model has been widely used by academics and prac oners and remains one of
the most popular strategic planning tools.

It sought to present an emphasis on human resources (So S), rather than the tradi onal mass
produc on tangibles of capital, infrastructure and equipment, as a key to higher organiza onal
performance.

The goal of the model was to show how 7 elements of the company: Structure, Strategy, Skills,
Staff, Style, Systems, and Shared values, can be aligned together to achieve effec veness in a
company.

The key point of the model is that all the seven areas are interconnected and a change in one area
requires change in the rest of a firm for it to func on effec vely.

Below you can find the McKinsey model, which represents the connec ons between seven areas
and divides them into ‘So Ss’ and ‘Hard Ss’. The shape of the model emphasizes the
interconnectedness of the elements.

The model can be applied to many situa ons and is a valuable tool when organiza onal design is
at ques on. The most common uses of the framework are:

 To facilitate organiza onal change.

 To help implement a new strategy.

 To iden fy how each area may change in the future.

 To facilitate the merger of organiza ons.

7S factors

In the McKinsey model, the seven areas of organiza on are divided into the ‘so ’ and ‘hard’ areas.
Strategy, structure and systems are hard elements that are much easier to iden fy and manage
when compared to so elements.

On the other hand, so areas, although harder to manage, are the founda on of the organiza on
and are more likely to create a sustained compe ve advantage.

Hard S So S

Strategy Style

Structure Staff
 Hard S So S

Systems Skills

Shared Values

Strategy

Strategy is a plan developed by a firm to achieve sustained compe ve advantage and successfully
compete in the market. What does a well-aligned strategy mean in the 7S McKinsey model?

In general, a sound strategy is one that’s clearly ar culated, long-term, helps to achieve a
compe ve advantage, and reinforced by a strong vision, mission, and values.

But it’s hard to tell if such a strategy is well-aligned with other elements when analyzed alone. So
the key in the 7S model is not to look at your company to find the great strategy, structure,
systems and etc. but to look if it’s aligned with other elements.

For example, a short-term strategy is usually a poor choice for a company, but if it’s aligned with
the other 6 elements, then it may provide strong results.

Structure

Structure represents the way business divisions and units are organized and includes the
informa on on who is accountable to whom. In other words, structure is the organiza onal chart
of the firm. It is also one of the most visible and easy-to-change elements of the framework.

Systems

Systems are the processes and procedures of the company, which reveal the business’ daily
ac vi es and how decisions are made. Systems are the area of the firm that determines how
business is done and it should be the main focus for managers during organiza onal change.

Skills

Skills are the abili es that a firm’s employees perform very well. They also include capabili es and
competencies. During organiza onal change, the ques on o en arises of what skills the company
will really need to reinforce its new strategy or new structure.

Staff

Staff element is concerned with what type and how many employees an organiza on will need
and how they will be recruited, trained, mo vated and rewarded.

Style

Style represents the way the company is managed by top-level managers, how they interact, what
ac ons do they take and their symbolic value. In other words, it is the management style of the
company’s leaders.