Business Model Canvas · Business Analysis Notes

What it is#

The canvas was created by Alexander Osterwalder and Yves Pigneur, and the BABOK® Guide includes it as a technique. In business analysis it serves as a blueprint for carrying out a strategy and a way to link initiatives to that strategy. The nine blocks, as presented in the training materials:

Customer Segments: the groups of people or organizations you create value for (business or consumer; which segment matters most).
Value Propositions: the customer needs you meet and why customers choose you (price, brand, service, reduced risk).
Customer Relationships: how you win and keep customers (personal assistance, self-service, automated service).
Channels: how customers learn about you, evaluate, buy, receive and get after-sales support.
Key Resources: the physical, financial, intellectual and human assets the model depends on.
Key Activities: the most important things you do. The training materials distinguish activities that add value, activities that do not, and activities that are required but add no value (regulatory reporting, for example).
Cost Structure: which resources and activities cost the most.
Revenue Streams: how money comes in: one-off payments or recurring ones such as subscriptions, transaction fees, sales or rental.
Key Partnerships: who you rely on and why: to optimize, reduce risk, gain resources, or outsource non-core work.

The right side of the canvas (segments, propositions, relationships, channels, revenue) is about customers and value; the left side (resources, activities, partners, costs) is about how the value is produced.

Osterwalder and Pigneur also describe recurring combinations of blocks, which they call business model patterns; see Five Business Model Patterns.

When to use it#

When analyzing the current state, to understand how the business makes money and where a problem sits.
When defining a future state, to show what changes in the business model.
When defining a change strategy, to check that an initiative supports the value proposition rather than just adding features.
When onboarding to a new domain and you need a fast overview.

When not to use it, or what to add: the canvas is widely used and simple, but the training materials, discussing the BABOK Guide technique, note its limits: it does not consider social or environmental impacts, does not give a complete view of strategy, and does not include strategic goals as part of the model. Combine it with SWOT Analysis or the frameworks in Strategic Analysis Tools for the strategic context, and with the Balanced Scorecard for goals and measures.

How to do it#

Set the scope. One canvas per business, business unit or product. If segments have very different value propositions, draw separate canvases.
Start with customers. Fill Customer Segments and Value Propositions first; everything else should serve them.
Complete the customer side: Channels, Customer Relationships, Revenue Streams.
Complete the production side: Key Activities, Key Resources, Key Partnerships, Cost Structure.
Check consistency. Every value proposition should reach a segment through a channel; every key activity and resource should support a proposition; the main costs should be explained by key activities and resources.
Draw the future canvas for the change, and mark which blocks change. These are the areas your requirements must cover.
Review with stakeholders from sales, operations and finance, who will each see different blocks.

Example#

A current-state canvas for The Workshop (a fictional chain of 12 bike-repair shops), with planned changes marked in brackets:

Block	Content
Customer Segments	Commuters who need their bike back fast; families; sport cyclists
Value Propositions	Reliable repairs by skilled mechanics; workshops close to home [future: always know when your bike will be ready]
Channels	Walk-in, phone, word of mouth [future: online booking and notifications]
Customer Relationships	Personal service at the front desk [future: self-service booking, automated updates]
Revenue Streams	Repair labour charges; parts sales; seasonal service packages
Key Activities	Diagnosis and repair (value-adding); parts ordering (required); answering status calls (not value-adding, to be reduced)
Key Resources	Mechanics; 12 workshop locations; parts stock
Key Partnerships	Parts supplier; outside development team [future: booking service provider]
Cost Structure	Staff; rent; parts inventory [future: subscription for booking service]

The canvas shows that the change is not just “an app”: it adds a value proposition (transparency), shifts channels and relationships toward self-service, adds a partner and a cost, and aims to remove a non-value-adding activity.

Common mistakes#

Listing everything → keep only what is key; the canvas is a summary, not an inventory.
Generic value propositions (“quality service”) → state the specific need met for a specific segment.
One canvas for very different segments → split it when propositions differ.
Treating the canvas as the strategy → it shows how value is created, not where the business wants to go; add goals and context from other techniques.
Not marking the change → show current and future states, so stakeholders see what the initiative affects.

Checklist#

The scope (business, unit or product) is stated.
Segments and value propositions were filled first and are specific.
Each proposition reaches a segment through a channel.
Key activities, resources and partners support the propositions.
The cost structure matches the key activities and resources.
Future-state changes are marked.
Strategic goals and wider impacts are covered by another technique.

Sources and further reading#

IIBA. A Guide to the Business Analysis Body of Knowledge (BABOK® Guide), version 3. International Institute of Business Analysis, 2015. Technique 10.8 “Business Model Canvas”.
A. Osterwalder, Y. Pigneur. Business Model Generation. Wiley, 2010 (the originators of the canvas; ch. 2 on business model patterns).
Business analysis training materials (practice examples and templates): course slides on strategy analysis (the nine blocks, strengths and limitations).