The Osterwalder business model canvas (BMC) is used by many entrepreneurs, managers, consultants and business schools. From a multiple case study research (4 cases) we have concluded that the canvas is not a valid instrument to gain in-depth and consistent insight into business models.
Osterwalder et al. define the business model as ‘the rationale of how an organization creates, delivers and captures value’. They have decomposed this general construct into nine distinct elements, so-called building blocks, represented in a fixed structure as shown in the figure above. The value proposition is at the heart of the canvas. It describes the bundle of products and services offered to customers. The main customer segments are listed in a separate building block. Channels summarize how awareness of the proposition is built, how the offer can be purchased, delivered and evaluated, and what post-purchase support is provided. In addition there is a building block explaining which customer relationships are established. These four customer value-related building blocks imply specific revenue streams, which are explained at the bottom right of the canvas.
The five building blocks as briefly explained above require key activities and resources, the financial consequences of which are summarized in the cost structure. A final building block lists the partners involved in one or more of the other eight elements.
The canvas is merely a juxtaposition of building blocks including shortlists of BM data. It does not explain the dynamics between the blocks, e.g. how activities contribute to value creation.
Four building blocks concern value for customers (the proposition, the channels, customer relations and segments). In our four cases these blocks are highly interlinked and overlapping. Several types of channels are also tightly linked to the key activities involved but the underlying logical links disappear in the BMC.
If the value captured by a key partner is of critical importance for the sustainability of the BM, the canvas does not facilitate to include this. More generally spoken, neither the role nor the importance of key partners can be derived from the BMC.
It is unclear how key activities and key resources are related. In all four cases the main key resources are deployed in and accumulated through the key activities.
Summarizing, the BMC does not offer a systemic approach to gain in-depth insight into the value creation and appropriation, the importance or function of key activities and key resources, or the involvement of key participants.