Business Model Canvas with Blue Ocean Strategy

BMC: Business Model Canvas

The Business Model Canvas was proposed by Alexander Osterwalder based on his earlier book: Business Model Ontology. It maps the business’s strategic, operational, and marketing processes into 9 building blocks where you get a broad and wide view of your business whether is it new or an existing business.
Instead of writing a business plan: a bunch of documents that no one wants read, create a business model canvas by which you can pitch your business or project to investors or stakeholders, describing your business as a story and getting your audience engaged.

The Business Model Canvas consists of 9 building blocks which we list them below:

Customer Segment
– Which classes are you creating values for?
– Who is your most important customer?

Value Proposition
– What core value do you deliver to the customer?
– Which customer needs are you satisfying?

Customer Relationship
– What relationship that the target customer expects you to establish?
– How can you integrate that into your business in terms of cost and format?

Distribution Channels
– Through which channels that your customers want to be reached?
– Which channels work best?
– How much do they cost?
– How can they be integrated into your and your customers’ routines?

Key Resources
– What key resources does your value proposition require?
– What resources are important the most in distribution channels, customer relationships, revenue stream…?

Key Activities
– What key activities does your value proposition require?
– What activities are important the most in distribution channels, customer relationships, revenue stream…?

Key Partners
– Who are your key partners/suppliers?
– What are the motivations for the partnerships?
– For what value are your customers willing to pay?
– What and how do they recently pay? How would they prefer to pay?
– How much does every revenue stream contribute to the overall revenues?

Cost Structure
– What are the most cost in your business?
– Which key resources/ activities are most expensive?

BOS: Blue Ocean Stratgey

Blue Ocean Strategy was developed by W. Chan Kim and Renée Mauborgne. Pioneered by the INSEAD Business School as a core subject within the MBA program, Blue Ocean Strategy challenges traditional concepts of strategy thinking and design. Blue Ocean Strategy defines markets as Red Oceans where there is too much competition over a shrinking market and companies survive on cutting the throat of competitors, and Blue Oceans where there is untapped spaces and prospectus market leadership and growth, making your competition irrelevant and creating an uncontested markets.

Do design a Blue Ocean Strategy one must use the Strategy Canvas as tool for creating and developing the strategy and setting the business apart through developing the Value Curve based on the ERRC Grid which stands for Eliminate-Reduce-Raise-Create indicating which factors within the industry need to be eliminated, which need to be reduced, which need to be raised, and which need to be created as new standards.

When integrating the Blue Ocean Strategy with the Business Model Canvas you create and exceptional and outstanding business which rivals the most successful businesses and the greatest of them all and its impact is highly recognized in terms of profits and growth.

Auther: Mr. Ahmed Refaie