The Business Model Canvas, the Lean Canvas and the Strategy Sketch compared
In 2008 Alex Osterwalder introduced the Business Model Canvas (BMC). Since then, many companies have benefited from the simple approach to 'describe, design, challenge, invent and radically adapt' their business model. At the time, the idea to outline the business strategy on one page was hugely innovative. After all, they were used to extensive business plans.
Since 2008, many variants of the Business Model Canvas have been introduced. At Pimcy we use three variants: (1) the Strategy Sketch by Jeroen Kraaijenbrink, (2) the classic Business Model Canvas by Osterwalder and (3) the Lean Canvas by Ash Maurya. The strategy outline has the broadest scope, followed by the Business Model Canvas and then the Lean Canvas.
In this article, I'll discuss the most important elements of each design, the differences between the canvases, and also when to consider choosing a particular canvas. If you have little experience with outlining strategy from a business model canvas, it is advisable to be guided in this. We can of course do this.
First I discuss the Strategy Sketch, as it has the widest scope.
The three models
Strategy Sketch by Jeroen Kraaijenbrink
This canvas was published in 2015. It is relatively unknown. However, I have used this canvas in a number of workshops and I think it is a practical and complete canvas. It is used to describe a company's entire strategy and consists of the following steps (in suggested order):
- Resources and Competences: What you have available within your organization, what you are good at and what makes you unique. This is comparable to people and resources en main activities from the Business Model Canvas.
- Partners: Who you work with. Some partners make your products and services more valuable. You may develop services and products together with other partners. Comparable with strategic partners from the Business Model Canvas.
- Customers and their needs: The organizations and people you serve and whose needs you want to meet. What are those needs really? This corresponds to customer segments in both the Business Model Canvas and the Lean Canvas
- Competitors: The ones your customers compare you with whether or not they purchase your product or service. This element is not part of the Business Model Canvas, but is part of the Environment Map defined by Osterwalder. This part is part of the Lean Canvas Unfair advantage
- What value do we deliver ?: What products and services do you offer and what is the value for your customer? What does the customer achieve by using your product or service? How do you offer these products? This element is included in all models. Channels en customer relationships from the Business Model Canvas you could also slide under this section. Falling for the Lean Canvas value proposition, solutions en channels Below.
- Income model: What you receive in return for delivering the products and services. From whom do you get this, how and when? This element is included in both the Business Model Canvas and Lean Canvas.
- Risks and costs: What financial, social and other risks do you have and how do you deal with them? Costs are included in all models, but what has been added to this model is the risk component. Kraaijenbrink: .. 'A business model can look great if all elements are completed and properly coordinated. However, risks are also very relevant, as they can make a particular business model considerably less attractive '.
- Values and goals: What you want, where you want to go and what is important to you. This is an element that is not taken into account in both other canvases. However, mission and vision are decisive input for strategic objectives. Profit or shareholder value is not always the most important thing for organizations, there are often other objectives as well. For example, the pursuit of sustainability can be a determining element of the strategy.
- Organizational climate: What is the organizational culture like? How is the organizational structure? What are the distinguishing factors in it now? This factor is not mentioned with the other canvases, but it does determine the strategy. The mindset of the staff, structure and culture is an important precondition for the implementation of the strategy.
- Trends and uncertainties: What is happening around the organization and what will be the effect of this in the short and long term? What uncertainties do you have to deal with. This is comparable to the Environment folder of Osterwalder.
More details can be found at http://thestrategyhandbook.com/
Business Model Canvas by Alex Osterwalder
Business Model Canvas
This canvas enables new and existing companies to determine how to create, deliver and retain added value. In the canvas, we have also indicated with colors which elements relate to the customer's needs (desirability), or we can make it (feasibility) and whether it is viable (viability). It consists of the following steps:
- Customer segments: Which customers do I serve and which 'activities' are carried out by my customers in the context of my products or services? The value proposition and customer segment are further explored in the Osterwalder Value proposition canvas. We see customer segments in all canvases.
- Value proposition: What is the value that I offer to the customer? What does the customer achieve by using your product or service? This is also part of the Value Proposition Canvas. This element is reflected in all canvases.
- Channels: How can the customers be reached? Is this personal, or digital, or via social media or… This element is also reflected in the Lean Canvas.
- Customer Relations: What kind of customer relationship do I enter into with my customers. Will it be personal or anonymous? How can I win and retain customers?
- Yields: What are customers willing to pay and how? This is part of all canvases.
- People and resources: Which resources (time, money, resources) do I use to create this value?
- Main activities: What must we do, what crucial activities must be done to create the value?
- Strategic partners: Which partnerships are needed / can be developed to create value. Also part of the Strategy Sketch.
- Cost structure: What are the costs resulting from this sum? Are these fixed, recurring costs? What are the variable costs? And what are the one-off costs?
Osterwalder indicates that business models operate in a certain context. For that reason, the following areas should also surround it Business Model Canvas are mapped, this is called the Environment map:
- Market forces: Important customer developments, such as growing or shrinking segments; customer switch costs; changing 'jobs, pains, and gains'; and more.
- Important Trends : Important trends that shape your environment, for example technological innovations, restrictions from regulations; social trends; and more.
- Industrial forces: Key stakeholders, for example competitors, value chain companies, new or disappearing technology suppliers; and more.
- Macroeconomic Forces: Macro trends, for example global market conditions; access to raw materials; high or low prices for bulk goods; and more
More details can be found here:
Lean Canvas by Ash Maurya
This canvas enables entrepreneurs and startups to quickly validate their business idea based on the principles of Lean Startup. Ideally, you create a canvas for each customer segment that you have defined.It consists of the following steps:
- Customer segments: This canvas is mainly aimed at completely new propositions and startups. If you come up with a new proposition, it is useful to know where you have the so-called early adopters can find. This group is part of the ultimate, larger customer segment. We find this element in all canvases, but here a little more specific.
- Problem: The focus in Lean Startup and this canvas is on solving problems that are really worthwhile. Here you describe the top 3 problems that the customer has to deal with and that you want to solve.
- Solution: This is how you want to deliver value. The solution is often what we all get excited about and run for. It is a small box on purpose that should only be filled in after the customer segments and their problems are known. Solution falls under value proposition for the other canvases.
- Value proposition: The compelling plan or offer that solves the customer's problems. This element is part of all canvases.
- Yields: The earnings model and pricing are part of the business model. This element is common to all canvases.
- Channels: Which channels do you use to get to and reach the customer? Comparable with customer relationship en channels from the Business Model Canvas.
- Measuring success: How will you measure whether you are successful? Which customer promotions have value to you? This does not always have to be a financial metric. Determining the correct metrics is important to ensure that you do not make decisions based on irrelevant data.
- Cost: What are your fixed and variable costs and how do they relate to the measures you have set? Part of all canvases.
- Unfair advantage: What does your organization have to offer that cannot be easily copied by others? How do you arm yourself against competition? This part is also included in the Strategy outline below competitors.
More details can be found here:
Summary of differences & when to apply
I hope it has become clear that each canvas has its own value and focuses on different elements. Each canvas has a different purpose, audience, application and uses different steps in different order. Visually we can clarify the similarities and differences in the following ways. Starting from the BMC, blue elements have been added to the Lean Canvas, and red elements to the Strategy outline:
In the following table another overview.
The value of business model canvases was and still is, that they enable you to quickly get to the core. You quickly determine the most important points of the strategy or new business model. From this starting point you can quickly arrive at a better strategy and significantly increase your chances of success.
If you have little experience with outlining strategy from a business model canvas, it is advisable to be guided in this. Pimcy is happy to help you with this!
You can do all canvases download for free on our site