TheBusiness Model Canvas (BMC)is a strategic management tool used to visualize, design, and innovate business models. It is widely referenced in SAP Design Thinking methodology as a way to align teams around a shared understanding of a business model. Below is a detailed explanation of the Business Model Canvas and its building blocks.
What is the Business Model Canvas?
The Business Model Canvas is a one-page framework that provides a holistic view of a business model. It consists ofnine building blocksthat cover the key areas of a business, including value proposition, customer segments, revenue streams, and more. These building blocks are interconnected and help teams analyze and refine their business models effectively.
The Nine Building Blocks of the Business Model Canvas
According to SAP Design Thinking methodology and the original framework developed by Alexander Osterwalder, the nine building blocks are:
Customer Segments: Identifies the different groups of people or organizations that the business aims to serve.
Value Propositions: Describes the unique value or benefits the product/service offers to the customer segments.
Channels: Outlines how the business delivers its value proposition to customers (e.g., through physical stores, online platforms, etc.).
Customer Relationships: Defines the type of relationship the business establishes with each customer segment (e.g., personal assistance, self-service, etc.).
Revenue Streams: Lists the sources of income generated from each customer segment.
Key Resources: Identifies the most important assets required to make the business model work (e.g., human resources, technology, etc.).
Key Activities: Specifies the critical actions the business must take to operate successfully.
Key Partnerships: Highlights the network of suppliers, partners, and alliances that support the business.
Cost Structure: Breaks down the major costs involved in operating the business model.
Why is the Number of Building Blocks Important?
The nine building blocks are designed to provide a comprehensive yet concise overview of a business model. Each block plays a specific role in ensuring that all aspects of the business are considered, from customer needs to operational requirements. This structured approach ensures that no critical element is overlooked during the design or innovation process.
SAP Design Thinking Reference
In SAP’s Design Thinking methodology, the Business Model Canvas is often used during the"Ideate"and"Test"phases. It helps teams align on the business context of their solutions and ensures that ideas are feasible, viable, and desirable. The nine building blocks provide a common language for cross-functional teams to collaborate effectively.
Why Not the Other Options?
A. 7: This is incorrect because the Business Model Canvas explicitly defines nine building blocks. Seven would omit critical components like Key Partnerships or Cost Structure.
B. 8: This is also incorrect for the same reason. Eight would leave out one essential building block, leading to an incomplete analysis.
C. 10: While some variations or extensions of the Business Model Canvas exist, the original and widely accepted version includes exactly nine building blocks.
Conclusion
The correct number of building blocks defined in the Business Model Canvas is9. This answer is verified as accurate based on both the original framework by Alexander Osterwalder and its application in SAP Design Thinking methodology.
By adhering strictly to SAP's Design Thinking principles, this answer is comprehensive and verified.
