Introduction to Business Canvas Model
Business Canvas model is a visual representation of components and strategies that represent the performance of the company. The development of new business models are possible with the Business Canvas model. However, this also helps in enhancing the existing business. Moreover, this helps generate and analyze ideas. With the help of the model, data collection could be easier. The various components in the business model such as customer segment, customer relationships, channels, value proportion, revenue streams, key activities, key partners, key resources, and cost structure. Making the business structure work in the model is an effective method to achieve the goals.
Elements of Business Canvas Model
1. Customer Segment
Generally, the business aims to serve a distinct group of people in the organization. There will be various behaviors, attitudes, and needs that ca serve to the specific group of people. Moreover, there will be always in need for profitable customers for companies. The information of customers can include regarding their interests, gender, and usage. The customers could segment based on their needs and necessities. Although can group based on similar desires. It can serve the right people with the right services and products. It is to address the right requirements which also increases customer satisfaction.
There is demographic segmentation which involves marital status, gender, and more. Behavioral segmentation involves the patterns of usage. The segmentation of lifestyle involves the values and interests of people (F.Dieffenbacher, 2023). In addition, there is age-related segmentation in which specific age groups. There are luxury payers and low-income payers that offer for spending. Specifically, B2B segment is based on size and business requirements. There is a customer base related to particular locations. Also the customers can be group into frequent buyers, new buyers, and existing buyers.
2. Customer Relationships
Basically, customer relationships are engagement with the company with a particular customer segment. It depends on how the customer is maintaining and connecting to the business. To emphasize, it not only create connections but is also involves in the interaction. For instance, it helps in maintaining a loyal customer base. There can be more customers who can get attract. If few of the customers feel valued and satisfied with the service that can produces by the business they can recommend to various customers and suggest new customers to the business. One of the customer relationships is providing customer support.
There is also community engagement where customers are involved in various sessions and forums for addressing their queries. It can make them feel that customers connects to the company (Pereira, 2024). Self-service is provided to the customers to get the services on their own. The Co-creation involves driving the insights of the customer by involving them in the designing and development of the product. To survive in the competitive market, gaining customers and maintaining relationships with them will boost the business.
3. Channels
The communication includes various channels either it can be online or offline. There are customer acquisition channels. Moreover, there exists sales channels for supporting the sales. There are value delivery channels which include supporting supply. To maintain seamless operations and experience there can be various channels that can enhance the satisfaction of customers. Choosing the right channels allows for increasing the reach and locations. There are indirect channels that involve indirect interaction with customers via meetings and calls and provide the services directly over the mediums. Such as business-to-business sales and services related to financials.
Other channels include company websites where customers can take support and make purchases through the website. There are indirect channels involved in supplying to retail businesses and distributors are involved. Some resellers can resell our products to the required customers. The wholesalers can also benefit by distributing the products (Murray & Scuotto, 2015). There are also channels such as websites and platforms where customers can browse and engage with the content. These are the digital channels that make the business grow globally and sell the products to a large extent. The market reach can be possible through using of right channels. Using of right channels.
4.Value proportion
The service or the feature that is involved in the product to give to the customers. It includes pricing, value, and other benefits that can benefit the customers. To meet the needs of the customers the services are given with the correct solution which suits the need. Based on understanding the problems of customers regarding the usage and prices they come up with an approach that solves the problem and solves issues regarding the product.
It can expect positive benefits by saving money and also improving functionality which leads to an increase in the productivity of the product. Customers also consider the additional benefits that can add value to them. There is not only a choice of benefits but also, use for a more personalized experience. There can be effective reasoning and demonstrations for the effectiveness of the solution and proper evidence can also be given to make the customer believe and trust the process. To make the customer believe and trust the process.
5. Revenue Streams
Revenue streams involves in how the making of money and willingness of customers to pay for the benefits and in what way the customers would prefer to pay are the customers pay after the usage or pre usage and what can be added to the revenue. Not only the price of the product is includes in revenue generation for a company but there is also value of customers who are willing to pay for the product is also involved there are various revenue streams such as subscription fees, licensing, sale of assets, and advertising.
The licensing revenue involves media and entertainment where a company or a business uses licensing software for the business to run it can involve generating value from the assets. In transaction-based revenue, the cash flow will happen immediately after the transaction which can give profits. There are advertising revenues that they earn from advertisements. It also involves making charges for the luxury or the premium features.
6. Key activities
To deliver the actions and reach the customer segments it is important to generate revenue as well various business operations are involved like identifying the business needs managing the operations and checking all the functionalities of activities. Platform management, production, and problem-solving involves in the business model. Moreover, these activities should be in line with the value proportion of the company, channels, relationships of customers, and revenue streams. Understanding the needs of customers and helping them solve their problems. Conducting and analyzing the data and coming up with the solution. The root cause of the problem is understood and implement effectiveness in providing the solutions.
In platform maintenance, there will be various interactions between the users via marketplaces and platforms. This can make sure that platforms can be a source of communication and network management. The production involves design development and quality maintenance. It involves in purchase of raw materials, design of the product according to the need, and software development that involves in development of the product and testing after the deployment of the software. It makes sure that the quality is available and standards will be met.
7. Key partners
To make the business model work there are various suppliers and partners involved. They collaborate with the business and work with more efficient skills to make expansion in the business and to reach the target. The partnerships include such as research institutions, distributors, competitors, and various other third parties. External help plays a crucial role in growing the business which helps in entering into the innovative market. There can be a reduction in risk if external support is provided. If partnerships are provided, they can extend to large markets.
There are specific groups such as joint ventures which involve sharing the projects and also sharing knowledge and technologies. They can also share the risk of investment and market challenges. Supplier relationship is also the integral part which involves taking help for the raw materials for production and maintenance of material delivery which improves the collaboration as well. By involving in the partnerships more innovative ideas. It can also enhance the capacity of its production to supply the materials and share the best practices.
8. Key Resources
The assets require for the business model such as human, physical, and financial. For example, physical resources such as equipment, networks, and storage required to run the business. They also include hardware, machinery, and various equipment. Such resources are helpful in the product creation and in maintaining the efficiency and overall performance of the business. Human resources help share knowledge and manage the tasks and operations in the business.
There will be a requirement for employees to manage the teams and staff. They can help with knowledge sharing and reaching customer satisfaction it also provides better collaboration. There can be a productive work culture with the involvement of humans. The financial resources includes such as earnings and investments. For a business to run cash flows are essential. For a business to run an initial investment is essential. Sometimes there is also a requirement for loans to start the business and ventures.
9. Cost Structure
The cost structure includes all the costs that are applied to operate the business model. Various costs such as fixed cost and variable costs are involved in the financial health of the business. Fixed costs are the constant costs that are involved in business operations such as fixed payments and salaries are considered to be a fixed cost. Variable costs are involved in producing the goods and material course (Gupta, 2024)
. Various utilities are involved. The cost involved for shipping and traveling for the products.
The cost structure helps in evaluating the changes in the businesses like improvement in the profits and improvement in the business. A suitable cost structure gives an advantage for the success of a business to ensure long-term management. Moreover, the cost structure helps in understanding the budget analysis and economic scale of the business. It is cost-driven or value-driven where it involves cost minimization. Giving the large volume of products at the minimum costs. And also involves discounts. The value-driven involves maintaining the loyalty of the brand.
UBER Business Canvas Model
Customer segments
The customer segments involved in Uber technology are passengers who don’t own a car, passengers who want to travel, passengers who cannot drive a car, and passengers who need cost-effective and affordable rides (Lahoti, 2019). The drivers who want to drive for extra income and wages and drivers who know all the navigations
Customer relationships
The customer relationship that is involved is self-service for providing the feedback and review system in the application. In the application. This can make possible feedback and reviews that can be known from the customers. Providing customer support. Social media support is required for the promotion.
Channels
Uber application is required for the operations. Online website for registrations. Social media for the usage. Offline advertising to promote the application and also online advertisements for grabbing the offers. Word of mouth to spread the usage and promote.
Value propositions
Affordable payments and providing of online facility to pay for the travelers or passengers. Easy access for payments. Convenient usage and tracking of maps in application. For drivers, there should be safety and security. Also, promotes extra income and sufficient work time management. Provide unlimited access.
Key Activities
Generally, the activities involved are the development of the application and testing the application. Checking the working of the application. Moreover, engaging and hiring active drivers and driver who are looking for the opportunity. Management of efficient payments for the customers. Usage of effective marketing strategies and promotions. Moreover, customer support requires to follow up on the issues.
Key Resources
Generally, a technical team is needs for the application development and testing. Moreover, to maintain the application, a maintenance team will e needed. Experienced drivers who have skills in driving (Damle, 2018). Driver who has sufficient ride experience. Moreover, the team who are experts in machine learning and data analytics and who develop the algorithms for application usage.
Key Partners
Investors for investing funds, Navigation partners such as Google Maps, distributors, online payment partners such as Google Pay, phone pay, and more for the effortless transaction. Financial support partners, Advertising partners for digital advertisements in social media, such as Facebook and Linked in and car companies for providing cars.
Revenue Streams
Taking a charge per ride, premium and elite rides, High demand or peak pricing in which the drivers can earn more than the usual hours. Penalty charges for the ride cancellation can be collected. Brand sponsorships for requirements such as food delivery, advertisements, and corporate rides and travel to office purposes. Moreover, Brand sponsorships for the business purpose to benefit both.
Cost structure
The cost required for the development of the application and research. Moreover, the cost required for technical tools and equipment, Insurance cost, and vehicle license cost. Providing salaries for the drivers and workers. Also, Maintenance cost for application and infrastructure. Marketing cost for promotions and advertisements. Operational cost for the support centers. Additionally, Vehicle costs for purchasing bulk number of cars.
Conclusion
In summary, the business canvas model enables businesses to overview the entire business model with a clear understanding of requirements and services. The Uber business model offers various services by generating commissions and required deliveries which in turn is helpful in economic management. In conclusion, it has concentrated on the customer experience with targeted marketing technology which in turn improved the performance. Thus changed the perspective of transportation. It also has shown its best capacity and intense competition with innovation and stood at a great place in the market.
References
Damle, V. (2018). Disruptive Innovation: A Case Study Of Uber. International Journal of Advanced Research and Publications, 2(11), 21-26. Retrieved from https://www.ijarp.org/published-research-papers/nov2018/Disruptive-Innovation-A-Case-Study-Of-Uber.pdf
F.Dieffenbacher, S. (2023, July 20). Customer Segments in Business Model Canvas. Retrieved from Digitalleadership: https://digitalleadership.com/blog/customer-segments/
Gupta, S. (2024, Jan 19). Business Model Canvas: Understanding the components and application. Retrieved from Linkedin: https://www.linkedin.com/pulse/business-model-canvas-understanding-components-sakshi-gupta-cspo–o3bce
Lahoti, N. (2019, Jan 02). Uber Business Model Explained: From Start to Finish. Retrieved from Mobisoftinfotech: https://mobisoftinfotech.com/resources/blog/uber-business-model-explained
Murray, A., & Scuotto, V. (2015). The Business Model Canvas. Symphony Emerging Issues in Management, 3, 94-109. Retrieved from https://www.researchgate.net/publication/339222590_The_Business_Model_Canvas
Pereira, D. (2024, Sep 19). Customer Relationship. Retrieved from Businessmodelanalyst: https://businessmodelanalyst.com/customer-relationship-business-model-canvas/
Keywords
Business Canvas Model, Cost structure, Value propositions, Customer segments, Revenue Streams
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