A business model canvas is a means that allows for strategic management and entrepreneurship. With the business model canvas, the business can be subdivided into smaller understandable and comprehensive segments or sub-divisions. The business canvas model makes it possible for a business to outline and describe its design, weakness, and challenge, plan and pivot the business model. It helps appreciate the key business partners, activities, channels, customer associations, value propositions, cost structures, revenue streams, and segments of customers. Business model canvas grants a proper understanding of the enterprise and is crucial in realizing the success of a venture. It eases communication amongst the business team on the business objectives, the clients when convincing them on why to do business with them and helps focus on what the business does and how to continue doing it (Ebert et al., 2017). The business model canvas can be described as a tool to ensure a smooth and successful running of a business.
The role of a business canvas model in organizational advancement. The business canvas model is significant and plays a major role in a business or enterprise. It shows the paths on which a business should lay and establish its organizational advancement strategy. Having understood and sub-divided the business model, it becomes easy to focus on those areas that call for improvement. For any organization or business to be innovative, a business canvas model is inevitable. Although innovation is perceived as disruptive, businesses with a plan are bound to remain undisrupted (Dudin et al., 2015). A business canvas model can, therefore, help determine the future state of an organization based on its current position. For example, the customer segment makes it possible to establish who the business is dealing with and how to approach them.
Part 2 (Step 1)
The business canvas model is characterized by nine key elements. They include customer segments, value propositions, customer relationships, key activities, channels, key partners, revenue streams, key resources and cost structure. These elements of business canvas model run based on who the partners are, the available resources, and their expected costs and the revenue.
Key elements of a business model canvas
The customer segments outline who the customers of the business are and the need intended to be met by the products.
Value propositions focus on the features and uniqueness of the products or services offered by the organization. It is through value proposition that the size of the market opportunity is established.
The key activities are the crucial and inevitable tasks that the business may realize the success and well-being of the business (Rittenberg & Tregarthen, 2013).
The key partners of a business are those crucial enterprises that play very significant roles in realizing the progress and success of the organization.
In business, production alone is not profitability and thus the need of channels which help determine how to sell and distribute the products. The success of a business is realized if only there are proper channels put in place to cause distribution and selling of the produced products and services.
Customer relationships are also a vital element because it defines how the business creates its demands (Joyce & Paquin, 2016). Businesses characterized by proper customer relationships are more likely to succeed as compared to those without.
Revenue streams element help determine the sources of revenue and profit and their sizes. Since the success of an organization is measured by its profit, it becomes easier to understand the importance of its revenue streams.
Key resources entail identifying the suppliers of the business, the commodities to be supplied to the business and any other vital elements of an organization.
The cost structure is also a significant element of a business model canvas because it helps establish the fixed and non-fixed costs associated with the running of the business.
The importance of understanding all key elements
The success of a business depends on how well all the nine key elements of the business model canvas are applied. Misunderstanding or improper application of one element is likely to hinder or alter the success of the others and as a result, leading to the collapse of a business. Identifying the customer segments is crucial since it is the foundation on which a business stands. Before a business is established, the customers, and the problems expected to be solved by the products or services to be offered by the business should be understood. Having all that well calculated, it is easy to implement and make use of other key elements of a business model canvas. With the customer segments identified, it is possible to implement value proposition since the market size is known. The channels of selling and distribution of products depend on the available customers such that the more the customers, the more the channels and vice versa (Chan, 2018). The customer relationships will determine the number of key partners and thus the revenue streams of a business. Ideally, each element is equally important since they all collectively propel the business towards achieving its objectives.
Part 2 (Step 2)
Guadalupe is a company in which the nine elements of a business model canvas are implemented.
The customer segments of the company are students, school staffs, campus visitors and those families living on campus. The proximity of the company to the campus puts it in a better position with its major target market being students and the school staff members who are working or operating on busy schedules.
Also, the values that Guadalupe delivers to its company are newness, performance, customization, brand, price, and convenience. All food is hand-made and fresh, simple, high quality with the burritos satisfying each customer's desires and tastes yet sold at a reasonable price. The convenience of services and foods of Guadalupe is mind-blowing and commendable. Having started in 2015, the company is not very old and thus offers newness to its customers.
Sales of the fast food are made through a direct channel where customers purchase their desired meals and pay for them over the counter with cash. That is likely to propel the company to success since customers are served with many conveniences.
Customer relationships at Guadalupe are commendable since it makes use of a personal help relationship. The company interacts with customers through an employee who assists the customers and thus providing a human touch. The company's employees are friendly with quick service delivery.
In Guadalupe, revenue is generated through sales of their hand-made fast foods. The fact that students enjoy their meals plus it is located just near the school is a guarantee they make commendable sales for their revenue.
The key resources that enhance the smooth learning of Guadalupe are financial, intellectual, human and technology resources. They include restaurant space, cooking ingredients, and equipment, recipes, suppliers, employees, computer.
The key activities of Guadalupe that enhance its success are producing Burritos, tacos, beverages and also problem-solving activities like sourcing raw materials, accounting.
The key partners of Guadalupe are the customers and the suppliers of the company. A trust relationship is vital so us to ensure the success of Guadalupe.
The cost structure of the company is characterized by variable costs, fixed costs, and the most expensive costs. The costs of food ingredients are likely to vary while those of restaurant equipment, rent, electricity bill are fixed with the food, beverage, and packaging likely to be characterized by most expensive costs.
References
Chan, J. (2018). Email interview.
Dudin, M., Kucuri, G., Fedorova, I., Dzusova, S., & Namitulina, A. (2015). The innovative business model canvas in the system of effective budgeting. Asian Social Science, 11(7), 290-296.
Ebert, J. R., Griffin, W. R., Starke, A. F., & Dracopoulos, G. (2017). Business essentials. (8th ed.). Toronto: Pearson.
Joyce, A., & Paquin, R. L. (2016). The triple layered business model canvas: A tool to design more sustainable business models. Journal of Cleaner Production, 135, 1474-1486.
Rittenberg, L., & Tregarthen, T. (2013). Principles of microeconomics. Retrieved from https://2012books.lardbucket.org/books/microeconomics-principles-v1.0/index.html
