Business Model Canva

I’ve seen every business model, but one of the most mainstream models explains how the Business Model Canvas works. Several companies in Indonesia also implement this model. But what is the Business Model Canva?

The Business Model Canvas (BMC) is a strategic tool that helps businesses visualize and develop their business model. It was introduced by Alexander Osterwalder and consists of nine building blocks that describe how a company creates, delivers, and captures value.

The 9 Building Blocks of BMC

1. Customer Segments — Who are your target customers? Define different customer groups based on needs, behaviors, or demographics.
2. Value Proposition — What unique value do you offer to your customers? This is the reason they choose your product/service over competitors.
3. Channels — How do you reach your customers? This includes distribution channels, sales platforms, and communication methods.
4. Customer Relationships — How do you interact with customers? Examples: self-service, personal assistance, automated service, etc.
5. Revenue Streams — How does your business make money? This includes direct sales, subscriptions, licensing, etc.
6. Key Resources — What essential assets (physical, intellectual, human, or financial) are needed to operate your business?
7. Key Activities — What are the core tasks your business must perform to deliver its value proposition?
8. Key Partnerships — Who are your strategic partners or suppliers that help your business succeed?
9. Cost Structure — What are the major costs associated with your business model? Includes fixed and variable costs.

Why Use BMC?

✅ Provides a clear, visual representation of a business model
✅ Helps identify gaps and opportunities for innovation
✅ Makes business strategy discussions more effective
✅ Useful for startups, entrepreneurs, and established businesses

Example “Gojek — Super App for On-Demand Services”

Gojek started as a ride-hailing service and expanded into a super app offering transportation, food delivery, and financial services.

Gojek Indonesia

Business Model Canvas for Gojek:

• Customer Segments: Urban commuters, food lovers, small businesses, and digital payment users.
• Value Proposition: Convenience, affordability, and a wide range of services in one app.
• Channels: Mobile app, website, social media.
• Customer Relationships: 24/7 customer support, loyalty programs, promo discounts.
• Revenue Streams: Ride commissions, food delivery fees, payment processing fees (GoPay).
• Key Activities: App development, driver and merchant onboarding, and customer engagement.
• Key Resources: Technology platform, driver and merchant network, brand reputation.
• Key Partnerships: Restaurants (GoFood), banks (GoPay), retail partners.
• Cost Structure: Driver incentives, marketing, platform maintenance.

Example of business Model Canva

Here are the main cons to consider:

1. Oversimplification

• BMC provides a high-level overview, but it doesn’t capture details like operational complexities, risks, or market dynamics.
• It lacks depth in areas such as competitive analysis and customer psychology.

2. Static Representation

• Business models are constantly evolving, but BMC doesn’t show how they change over time.
• It’s not dynamic enough for businesses in fast-changing industries (e.g., tech startups, and e-commerce).

3. No Direct Focus on Execution

• BMC helps in planning, but it doesn’t guide execution.
• There’s no step-by-step approach for implementing the ideas.

4. Weak Financial Analysis

• BMC includes Revenue Streams and Cost Structure, but it lacks financial forecasting, profit margins, or cash flow analysis.
• It’s not enough for businesses that need detailed financial projections.

5. Limited Competitive Insights

• BMC focuses internally, but it doesn’t provide a thorough competitor analysis.
• It doesn’t address industry threats, market trends, or substitute products directly.

6. Not Suitable for All Business Models

• It works well for startups and digital businesses but may not be detailed enough for traditional or highly regulated industries (e.g., pharmaceuticals, banking).
• Nonprofit organizations might struggle to adopt BMC since their goals are impact-driven rather than profit-driven.

How to Overcome These Limitations?

✔ Combine BMC with other tools — Use SWOT Analysis, PESTEL, and Porter’s Five Forces to fill the gaps.
✔ Regularly update the canvas — Adapt the BMC as your business grows and faces new challenges.
✔ Integrate financial planning — Use separate financial models alongside BMC for detailed budgeting.
✔ Consider external factors — Include competitor research and industry trends in your strategy.

References:

Business Model Canvas Template

Business Model Canvas: Explained with Examples | Creately

Business Model Canvas (BMC): Definition, Elements and Examples