Classroom Companion: Business

 
Chapter 19 · Digital Business Models

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sion and updating over time and must sometimes be completely rewritten due to 
changes in customer behavior, social trends, economic boundary conditions, and 
technological evolution. Failure to update business models may result in reduced 
profits and, eventually, bankruptcy.
19.2
 The Business Model Canvas
Alexander Osterwalder proposed the business model ontology as part of his Ph.D. 
thesis in 2005. Later, this business model ontology was refined to become the busi-
ness model canvas (BMC) (Osterwalder & Pigneur, 
2010
). The BMC is a framework 
for describing business models. It can be applied to all kind of businesses, includ-
ing digital businesses. The BMC is based on describing nine central building 
blocks of a business and modeling the relationships between these building blocks. 
.
Figure 
19.1
shows an outline of the BMC and how the BMC is visualized in this 
book. The different building blocks in the BMC are described in 
.
Table 
19.1
. The 
BMC has been applied to several digital businesses to uncover business operations 
and relationships between stakeholders. In addition to the BMC, there are several 
other frameworks for describing businesses. These frameworks focus on slightly 
different aspects of the business operations of a company; however, they mostly 
agree on the core concepts of the business model.
The nine building blocks of the BMC can be divided into three groups: value 
proposition, value turnover, and value generation.
Key partners
Key activities 
Key resources
Value
proposition
Cost structure
Customer
segments
Revenue streams
Customer
relationships
Channels
. Fig. 19.1 The business model canvas. (Authors’ own figure)