9 Business Model Building Blocks

A business model describes the rationale of how an organization creates, delivers and captures value. List and most content inspired by the highly recommended book, Business Model Generation, "a handbook for visionaries, game changers, and challengers striving to defy outmoded business models and design tomorrow's enterprises."
  1. 1.
    Customer Segments
    Defines the different groups of people or organizations an enterprise aims to reach and serve.
  2. 2.
    Value Proposition
    Describes the bundle of products and services that your specific Customer Segment(s) are willing to pay for. This solves a customer problem or satisfies a customer need.
  3. 3.
    Channels
    Describes how a company communicates with and reaches its Customer Segments to deliver the Value Proposition. These touch points greatly influence the customer experience.
  4. 4.
    Customer Relationships
    Describes the types of relationships a company establishes with specific Customer Segments. These can range from personal services to automated services to user created and managed communities.
  5. 5.
    Revenue Streams
    These are the channels through which a company generates sales from each Customer Segment. These can be one-time payments for a transaction or recurring payments to deliver an ongoing service.
  6. 6.
    Key Resources
    The necessary assets required to deliver a company's Value Proposition. These can be physical, financial, intellectual or human assets.
  7. 7.
    Key Activities
    The most important actions a company must take to operate successfully and deliver its Value Proposition.
  8. 8.
    Key Partnerships
    The network of suppliers and partners that enable a company to deliver its Value Proposition. These can be strategic partnerships, joint ventures, and/or buyer-supplier relationships.
  9. 9.
    Cost Structure
    All costs incurred by a company to operate its business model. These costs are largely generated through Key Resources, Key Activities, and Key Partnerships.