Can businesses determine the right direction and long-term development? Depends on choosing the right business model. One of the models that most businesses refer to is the canvas model. So what is the canvas model? Let’s find out more details with Apexcorp in this article.
What is a canvas model?
The canvas model is also known as BMC (short for Business Model Canvas). Developed by Swedish management expert – Alexander Osterwalder. This is a tool that supports building intuitive business models. Often trusted by strategic managers.
The model provides you with a comprehensive view of your business through 9 main elements. Based on that, you can analyze and compare factors that can affect the increase in investment. At the same time, give objective comments through the common language used in the model.
Thanks to that, businesses will know what needs to change and promote to create unique new things. Helping businesses move towards outstanding development.
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Why should you use the canvas model in business?
Master Nguyen Phong Phu – Chairman of Apexcorp Strategic Consulting Expert Council commented. “The canvas model possesses the following three outstanding advantages”:
- The model helps you easily see an overview of your business. The plan is presented simply and concisely but ensures all necessary information is complete.
- Thanks to its simplification and not being as bulky as regular plans, the canvas model helps you quickly grasp, compare and contrast items on the plan.
- The model can be applied to almost any size business, including specific product industries. Especially for those who do not have much experience in business planning. Then the canvas model is the right choice.
How to design a business model according to the Canvas model
Once you understand the concept and advantages that the canvas model brings. The next question arises: how to create an effective canvas business plan? A complete canvas model will have the following elements:
Identify target customer segments
Before starting to build the canvas model. You need to identify the customer segment you want to target. Customer segmentation is the task of dividing customers with similar interests, consumption habits, etc. into groups. Some suggested questions to help you identify customer segments more easily:
- What are the main characteristics of target customers?
- What are their preferences and shopping habits?
- What problems are they facing or are they interested in solutions?
- What criteria do customers rely on to consider choosing and evaluating a solution?
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However, for segmentation to be accurate and highly effective, you need tools to support detailed storage and management of customer information. Using customer management software (CRM) you can store a large number of customer lists to improve the proper organization of information.
CRM also makes accessing data files more convenient, and customer data resources are fully exploited. From there, launch a professional marketing and customer care campaign. Avoid missing customers and spending too much money on marketing without getting any results.
Determine the value of the business
The value that products bring to customers is one of the decisive factors in the success of a business. Because the value of a business is closely linked to customer needs. To determine the value you want to provide to customers, you need to answer the following questions:
- What benefits does the business bring to customers?
- What customer difficulties can businesses solve?
- What solution does the business provide that is superior to its competitors?
- Why should customers choose corporate solutions?
Determine distribution channels
Distribution channels are the channels that businesses use to contact and interact with customers. Through distribution channels, you can bring to your customer base the products that customers want. Distribution channels are also a popular form of bringing products from the production site to customers.
Includes two main distribution channels: direct distribution channels (such as direct sales staff, direct sales points,…). And indirect distribution channels (such as agents and partner stores).
Build relationships with customers
The next indispensable element in the canvas model is building relationships with customers. Through tracking the entire customer experience at your business. Since customers are aware of the business. products until they become loyal customers of the business.
Because only if you understand and build successful relationships with customers. Then you can continue to build a plan to attract more new customers. Develop and maintain old customer base.
To build stronger relationships with customers, Apexcorp provides you with a set of marketing tools such as:
Create messages with Email marketing and send them to the target customers you want to reach. Remind them of your brand and products.
Create a loyalty program, you can create multiple levels of membership and accumulate reward points. This will stimulate their shopping behavior and maintain loyalty.
Or create discount codes in many forms (percentage of product value, fixed amount or free shipping) on many platforms (websites, apps, e-commerce platforms, etc.). To create a reason for customers to come back to buy. From there, increase sales for your business quickly.
Expected revenue source
After determining customer segments, business values, communication channels and building relationships with customers. Now you can determine the revenue source for your business.
Revenue is the foundation that helps you grasp the profit conversion situation of your business. Also from revenue, you can balance income and expenses. Review unnecessary revenue and expenditure to eliminate and establish a central revenue source.
Financial resources of the enterprise
Financial resources are the factors that the canvas model focuses on. Because this is a key factor for businesses to increase confidence in providing the best values to customers. At the same time, deploy plans and develop new products. And prevent cases that arise during operation.
Identify the main activities of the business
Depending on the product and field in which the business is operating. You should plan important tasks that need to be prioritized to maintain business operations. Besides, evaluate the impact and eliminate unnecessary activities.
The main goal of this determination will be to make the connection between businesses and customers stronger. And create profit streams for businesses.
Identify the main partners of the business
The partner you choose will be closely associated with the operation and future development of the business. Can businesses bring customers a lot of value? Whether the products are accepted by the market or not will depend on many of your partners.
Your partners can be retailers, distributors, advertising companies, etc. If you are still wondering about determining your main partner, you can answer the following questions:
- Which distributors/companies are famous in the field in which the business is operating?
- What are their strengths and weaknesses? What are their main activities?
- Which potential distributors/companies can the business cooperate with?
- And what benefits will businesses receive from that cooperation?
Determine cost structure
Finally, clearly determine the cost structure of the business. To focus on cutting unnecessary costs, or focusing on improving product quality for customers. These costs can be space costs, personnel costs, estimated costs, etc.
If the business plans to invest in any project or campaign. But I don’t know if it’s effective or not? You can use the ROI (Return On Investment) index to easily consider whether you should invest in that project or not.
Conclude
From the information that Apexcorp has just compiled, it can be seen that the canvas model helps businesses plan and grasp important items easily, regardless of business scale. This is truly a great brainchild for your business.
Hopefully this article will be useful to you, helping you better understand the canvas model as well as gain more experience in planning a successful business model. If you have any questions, please contact Apexcorp’s team of consulting experts for implementation support.
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