Genesis of Business Model Canvas

Question: Write an essay on Genesis of business model canvas. Answer: Genesis of business model canvas The need for a canvas like framework arose when teaching students with no business knowledge. The need then arose that there should be a framework which gives detail on pre-business planning and ways of concept development. After many iterations, business model canvas came into being after the efforts of Osterwalder. He felt that when Company needs to optimize its activities, having a particular business model is important. It provides a systematic path to launch a new venture. It is necessary to examine all alternatives and their implication thoroughly before pursuing any path. To avoid making guesses and uncertainty in the work process, the business model canvas is the key to implementing strategic business plans. Therefore business model canvas was proposed to compare and contrast plans and determine which the best plan to carry forward is. It allows both a novice entrepreneur and an experienced investor to grab business opportunity within a short period (Sarma Sun, 2016, January ). Unique features of the approach of the Business Model Canvas Osterwalders business model concept features nine building blocks such as value proposition, key resources, key activities, partner network, channels, customer segment and relationship, cost structure and revenue streams. The model describes the proposed channels of distribution of products and services, their value proposition in terms of services offered and their unique advantage. It reveals the key activities for executing value proposition and the network of partners in the particular organization. The canvas gives detail on the target market, type of relationship they want to maintain with customers and the overall cost and expense structure. It also specifies the way a firm will determine its pricing and profit. It is an appropriate framework for developing, documenting and evaluating business plans (Gronum et al., 2015). Comparison with another business model Apart from Osterwalders business canvas, there are other business model frameworks such as Zachman, Porters Value Chain, Microsofts motion and IBMs component business model (Leschke, 2013). The nine building blocks of Osterwalder has been mentioned above. The value chain is dependent on activities like planning, governance, and execution. Though different in approaches, all framework leads to the same goal. The difference lies in the area covered for the functioning of the framework. Some may apply for the whole enterprise while some may just be beneficial for execution part. Other important features in business model map components include entrepreneurial fit, product alternative, and industrial environment (Michelini Fiorentino, 2012). Benefits or limitations of using Osterwalders business model Considering the case of oil industry, the BMC helps to visualise the whole picture of the business and helps to spot the strength and weakness. It offers an opportunity to plan, verify, and iterate. It helps to test the hypothesis and validate with the customers. It gives factors related to products and under ones control. All the business elements revolve around BMC. However, it ignores the strategic purpose of the oil industry and excludes the concept of competition. It is difficult to get the practical experience of manufacturing process. All its nine elements cannot be defined that as some parts are more highlighted than others and priorities cannot be set. The model fails to give the environmental impact of oil industry (Weiller Neely, 2013). Reference Gronum, S., Steen, J., Verreynne, M. L. (2015). Business model design and innovation: Unlocking the performance benefits of innovation.Australian Journal of Management, 0312896215587315. Leschke, J. (2013). Business model mapping: A new tool to encourage entrepreneurial activity and accelerate new venture creation.Journal of Marketing Development and Competitiveness,7(1), 18-26. Michelini, L., Fiorentino, D. (2012). New business models for creating shared value.Social Responsibility Journal,8(4), 561-577. Osterwalder, A., Pigneur, Y., Bernarda, G., Smith, A. (2014).Value proposition design: how to create products and services customers want. John Wiley Sons. Sarma, S., Sun, S. L. (2016, January). THE GENESIS OF FABLESS BUSINESS MODEL: INSTITUTIONAL ENTREPRENEURS IN AN ADAPTIVE ECOSYSTEM. InUnited States Association for Small Business and Entrepreneurship. Conference Proceedings(p. R1). United States Association for Small Business and Entrepreneurship. Weiller, C., Neely, A. (2013). Business model design in an ecosystem context.University of Cambridge, Cambridge Service Alliance.