The four core benefits of The Business Model Canvas
The Canvas transforms the abstract notion of a business 'model,' as proposed by Peter Drucker, into a tangible and visual tool that aids in considering various facets of a single business model.
Companies benefit from the Canvas by aligning their activities, allowing the comparison of potential trade-offs, and providing a holistic view of the overall business structure. There are four benefits to working in this way:
1. It establishes a shared language
Effectively conveying your business model and value propositions can mean the difference between securing vital resources and fading into obscurity.
Many of us have had our fair share of having to justify repeatedly or even shelf ideas because they weren’t coming across clearly.
The reason is simple. It is difficult to challenge assumptions and innovate successfully without a shared language. If only there were a way to translate seemingly complex ideas into easily understood innovative solutions. A tool like this could be used.
Creating and modifying business models can be a challenging task.
It lets you easily visualise and manipulate different business model components and create new strategic alternatives without anyone needing to brush up on business lingo.
Read: 5 tips on how to best present your ideas
2. It is simple, visual, and practical
Your team needs a concept everybody understands: one that facilitates description and discussion. But here’s the challenge.
The concept in question must strike a delicate balance. It needs to be simple and intuitive enough for everyone in the organisation to grasp—regardless of their role or expertise level—while not oversimplifying the complexities of how enterprises function.
It should be visual because visual tools help to bring clarity and alignment in understanding the relationship between the building blocks of your business model. The human brain processes visuals 60,000 times faster than text.
It should be practical to enable it to drive tangible, actionable insights that drive the company forward.
In such an environment, the business model becomes a living document—a tool for continuous adaptation and disruption
3. It allows you to discover opportunities
Missed opportunities often stem from hesitation, lack of information, or fear of failure. They are the roads not taken, the ideas not pursued, and the ventures not started.
The cost of missed opportunities can sometimes be substantial in financial gains, innovation, and competitive edge.
Ultimately, having the courage to recognise and seize market opportunities requires a blend of insight and the willingness to take calculated risks. But how do you ensure you’re not miscalculating the risks?
By listing your business into nine fundamental building blocks on the canvas, you can begin to visualise and understand their relationship to each other.
This approach lets you quickly identify insights and opportunities for improvement and innovation in various areas. It also ensures all aspects of the business are aligned and working towards the same goals.
Read: 14 practical ways to apply the Business Model Canvas
4. It allows you to iterate quickly
Imagine you are exploring a new city on foot and trying to get to a restaurant your friend recommended. According to your friend, you must try their lobster bisque. Unfortunately, on your way, you encountered a road closure. What would you do in such a situation?
Chances are, you’ll pivot. You’ll either:
- Find a different route to the restaurant.
- Have it delivered to your hotel. But lower your expectations on the quality of the food.
- Decide you’ll go there some other day, depending on your remaining time in the city.
- Give up on it entirely. It wasn’t worth the effort, based on the online reviews.
This scenario mirrors the process of iterating on a business model—with different tools.
In business, as in city exploration, we're iterating constantly and adjusting based on new information and circumstances to reach our desired outcomes.
Whether using sticky notes on a real-life Business Model Canvas or designing your business model on the Strategyzer Innovation Platform, you get to sketch out an initial business model and then keep iterating until you’ve tested enough ideas to find your product-market fit.
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