Classroom Companion: Business

19.2 · The Business Model Canvas

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Value proposition is the core building block of the BMC. The advantages of 
well-defined value propositions are:
5
Upholding a clear focus on the fundamental activities of the business
5
Identifying and maintaining any core competencies that the company may pos-
sess
5
Precise targeting of the production toward products that the users will have 
and, thereby, avoiding production of goods that nobody will buy
5
Willingness to change direction as processes, technologies, and products are 
substituted by new ones
5
Willingness to change direction based on feedback from the users as the market 
evolves
5
Effective marketing that focuses on user needs and user satisfaction
5
Creating customer confidence in the product
5
Understanding how and why the product creates value for the users
Value turnover includes four building blocks: customer segments, channels, cus-
tomer relationships, and revenue stream. These building blocks describe how the 
. Table 19.1 The nine building blocks of the BMC. (Authors’ compilation)
Building 
block
Description
Value 
proposition
Describes the values and benefits created by the organization that are offered to 
one or more customer segments. The value proposition may comprise one or 
several different propositions targeting different customer segments. The value 
proposition describes the goods and services that the organization produces and 
delivers to customers, as well as the benefits that customers get by buying them
Customer 
segments
Identifies one or several customer segments targeted by the organization’s value 
proposition. Different customer segments may have different roles in the BMC
Channels
Describes how the value proposition is transferred to the customer segments
Customer 
relation-
ships
Defines the organization’s relationship with the customer segments
Key 
activities
Describes the key activities needed to create and offer the value proposition
Key 
resources
Classifies the key resources needed to support the key activities and to create 
and offer the value proposition to the customer segments
Key 
partners
Identifies the key partners required for creating and offering the value proposi-
tion to the customer segments
Cost 
structure
Identifies the elements that contribute to the cost of the organization, including 
the cost of the various key activities
Revenue 
streams
Describes how the different customer segments contribute to the organization’s 
income