this is the business model canvas it's just what Beth and car will need to craft a powerful business model and it can do the same for you let's dive in and see how it works there are nine essential building blocks that make up any business model you get all nine blocks working together you'll have answered the fundamental questions any business model must solve we'll start here with customer segments these are all the people or organizations for which you're creating value for each segment you have a specific value proposition these are the bundles of products and
services that create value for your customers channels described through which touch points are interacting with customers and delivering value the customer relationships outline the types of relationships you're establishing with your customers and how you're acquiring and retaining them pricing mechanisms through which your business model captures value are documented under revenue streams the key resources show which assets are indispensable in your business model so you can describe the infrastructure you need to create deliver and capture value the key activities show which things you need to be able to perform well the key partners show who can
help you leverage your business model since you won't own all key resources yourself nor you perform all key activities once you understand your business models infrastructure you'll also have an idea of its cost structure any business model can be mapped this way nine building blocks working to reinforce and strengthen each other but before you make model for yourself it helps to see what a breakthrough business model looks like in action like this one low-cost airlines revolutionized air travel thanks to their disruptive business model let's first look at their value proposition a low-cost airline offers ultra
cheap flights to their main customer segments budget travelers by adopting and no frills policy and this leads to additional revenue streams because customers pay for their ticket and additional fees on items like food and drink priority boarding and luggage the airlines save even more money through their choice of channels selling only through call centers in the internet making for efficient if not always convenient customer relationships that are automated and often impersonal ok that covers the right side of the canvas the part everyone can see the left side of the canvas is what's going on backstage
like their choice of key resources they reduce maintenance and training costs by using a single aircraft model for the whole fleet and they only fly to cheap airports where it's cost efficient to land or they even get paid to touch down planes that do land have quick turnarounds so they get back in the air earning money as quickly as possible and they form key partnerships with others in the travel industry like car rental hotel and insurance companies finally under cost structures or maintenance training Airport and call center costs are trimmed to their lowest levels all
of these pieces working together make their fares almost impossible for traditional airlines to compete with as nothing superior about these airlines accept their business models they're reaching an entirely new segment of travelers out of reach for traditional airlines cutting out costs is pretty exciting right but wait because it's successful for discount airlines doesn't mean all work for your idea luckily the business model canvas allows you to iterate many models and test them quickly let's get started with your own business idea
