In a nutshell: The Business Model Canvas is a tool for visualising the various elements of a business, with an emphasis on the value proposition to its customers. It helps us be more systematic in analysing an existing business model and developing a vision for a future one. It can be used in projects when you are ready to engage with companies and can help you determine and monitor strategies to influence business practise and the design of the business model.
Status: Optional Tool
Key principles: It is assumed that you will engage with businesses that provide opportunities to address systemic blockages identified through market mapping – demonstrating the principle of Systems Thinking. The emphasis on the core value proposition of the business reflects the facilitation principle, by ensuring that business incentives are developed to drive more value for marginalised groups, rather than this being driven by development actors. The role of each of the areas of the canvas can be viewed through a gender lens in order to identify how the business can make a contribution to transformational change, either internally or in its engagement with customers and suppliers.
Preconditions and preparation: Teams should read background material on the Business Model Canvas and watch videos on how it has been used in different contexts before attempting to apply it. It requires a substantial level of information about a market actor, so it is likely best applied after one or more initial meetings with a business.
Timeline and resources: The Business Model Canvas is designed to be used iteratively. Each time the canvas is applied, a new picture of the business model is created. This can be used in several different situations:
1. As part of a wider market system analysis, a team may create a Business Model Canvas for a selection of market actors to allow a comparison of similarities and differences. This could be used to highlight existing innovations that the project can promote to other similar businesses.
2. To help a business consider alternative ways of doing things – perhaps in an effort to work out how to be more inclusive – a facilitator can work with a business to brainstorm potential future business models. This can help illuminate tradeoffs and viable strategies for the business to take.
3. To track the changes in a particular business over time, a project team can update the Canvas for a particular market actor at regular intervals (every three or six months, if change is happening rapidly). This can help a project monitor the impact of the strategies being used to engage with the business.
The Business Model Canvas consists of nine ‘boxes’ that capture different elements of the business model. The Canvas has three central elements: value proposition (middle); expense structure and drivers (left); and revenue structure and drivers (right).
Integrating gender into the canvas
A gender lens can be applied to the Canvas simply by asking a series of questions that unpack relevant areas. For instance:
- Customer segments: How many potential customers are women? What age are they? What is their economic status?
- Channels: What channels are going to be appropriate for reaching women – taking into account women’s time, roles, norms etc.?
- Relationships: What strategies will be used to get and maintain women customers? This may need to take into account the relative value of individual and group approaches for working with women.
- Value proposition: How does the product/service offered by the business meet the needs of women? Is it based on an analysis that disaggregates data for men and women?
Outcomes / behaviour changes
The expected outcomes of using the Business Model Canvas are highly dependent on the way in which it is used. Where it is explicitly used as a tool for communication and strategic planning with a partner business, it would be expected that the business owner gains new insights into their own functioning. Depending on the skill of the facilitator, this reflection can be nudged towards new ideas and strategies for reaching out to particular marginalised groups through new customer relationships and channels; or for investing in internal human resources to improve quality, service orientation, for example. Ultimately, these types of explorations are all contained within a clear cost vs. revenue framework – which helps ensure that as an NGO, we don’t push businesses into activities that aren’t profitable (and therefore aren’t sustainable).
Resources and templates:
Business model generation website