Business Canvas

Initial research on business canvas revealed Strategyzer at $14.99  a month. However little product information was available and you and can’t do anything without data. Business toolbox app was £20.99 with bad reviews (apps). Forum no longer running (bmgen user voice). Kaczynski M. (2012) asked question for reviews before purchase on LinkedIn. Criticisms included functionality limited and app better despite lack of collaboration de Salaberry. Lean Launch Lab suggested by one person as a better option. Strategyzer linked to their academy, a way of up selling. Burgess criticises their use detailing they don’t compensate for a lack of business understanding.

Lean start up methodology by Eric Ries website. Key theory build minimum value product. Not enough information on the website to appraise e.g. Whats are the 5 whys. Build, measure, learn, not always appropriate surely? This is an IT perspective on projects.

Multiple business canvas models around, his was 2006. Different models outlined in his researcher job advert. Gains and pains is covers in his value proposition canvas. Interesting slides on slideshare.

Lean Launch Lab 30 day free trial. Signed up free trial 30 days 5/12/2013. Canvas is not optimized to work as an app. Links and guidance is American. A real problem not being tablet friendly.

New thread started on LinkedIn to which I replied re business model canvas. Colleague who taught strategy in a business school for many years had no idea what I was talking about, have asked two other senior lecturers who teach strategy. There is a review on it in Wikipedia which as an academic I always run from. However it details many new models since this was devised in 2008. I don’t disagree with any of the content in the visual representation of the model. The sass download also attracts a fee although not high and free if it is shared. Curiously there is no opportunity to look at the product or no discussion of its benefits just an assumption that folk will download irrespective. Although some people seem to use the use the canvas rather than the apps or associated guidance.

The usp of a number of these models appears to be the idea of visual thinking, Found a number of slide share presentations on business models, seem mostly to be repetitions of much the same thing, almost as though a number would be uploaded in the hope that viewers would be impressed by repetition. My assumption is that users change the model for copyright reasons. What matters in part is the support provided through the canvas experience if one signs up. Curiously sites seem to avoid detailing benefits of the service.

Turning to more conventional business study resources consideration was given to Mintzberg et al’s (2003) text on evaluation if business strategy. As I suspected the chapter on evaluation of strategy tells you it is about how a business performs. Whilst that clearly is useful from a business perspective it does not inform a reader about the comparative advantages  and disadvantages of a business idea. However the first consideration discussed as whether the objectives seem appropriate is worthwhile as if they are not then there would be no point to progressing to plans, policies and possible or actual results.

Mintzberg (2003 p 3) details the 5 objectives of strategy to be ” plan, ploy, position, perspective and pattern”. A simple evaluation measure therefore would be whether team members believed that a possible proposal for a new business would work. How could this be assessed looking at initial ideas without any data in a formal business plan? Clearly a 3 minute pitch for an idea without any projected data would surely require more than a gut feeling appraisal?

Depending on a user’s interpretation of the word strategy may depend on how they evaluate a business proposal. However whether a business succeeds is not just dependent on strategy but also macro and micro environmental factors, leadership, cash flow and a  number of other variables. Therefore to appraise an idea in terms of its likely success ensures a number of aspects are considered. The extent to which these can be modelled into a package is an interesting idea. To evaluate this a search would need to be conducted into whether any academic had reviewed business model canvases in general to see the correlation between their use and subsequent success. It is highly possible that such research would be inconclusive due to the number of extraneous variables hence only qualitative research may be possible to suggest their worth.

Mintzberg et al (2003) in their introduction highlight. The forces affecting a business as including ” organisation, collaboration, values, cognition, technology and globalisation”. Not perhaps the traditional list if PESTLIED variables and competition that may have been expected or reference to Porter. The context factors that are relevant are detailed as “start up, maturity, expertise, innovation and diversity”. There is plenty of evidential data illustrating the failure rate of both innovations and new businesses, some of which is dependent on financial factors such as cash flow.

If strategy is about the pattern of decisions a company makes related to whether to proceed with a business idea and proposal must logically be the first decision that a team would make if it were in a potential start up situation. The relevant theory and frameworks therefore would have to include appraisal of innovations. Mintzberg et al detail the sub activities of strategy as being to identify the opportunities and threats in the company’s environment and attaching an idea of risk to possible alternatives. In the absence of quantitative data in the early stages of business formation and with no business it is obvious that strengths and weaknesses cannot be considered. It is possible to form a perception about the quantity of resources needed ie men, money and machines ( Smith PR Sostac plus 3Ms) or an economist’s view land, labour and capital and perhaps some consideration as to whether there is an entrepreneur behind the idea who can bring the factors of production together.

Because of the concept of digital disruption used to explain the changes in the marketing environment in the 21st century the business models which may be considered for use today differ considerably from those that existed before digital. The shift to engagement, collaboration, lead generation, using social media, responding to customer needs, entering into dialogue and conversation rather than shouting has been considered. The detail of possible new business models that should be considered as discussed by Osterwader before he produced his business model canvas in 2008 and detailed in slide share presentations such as
The 10 Business Models of Our Time by Business Models Inc therefore are helpful ideas that move management theory on from the ideas outlined by Porter in the 80s.

In identifying what to do and formulating strategy the only decision that can be taken at the start is to identify the opportunity and risk ( Mintzberg et al, 2003 p75). Porter’s work in the 1980s led management thinking in strategy as to how strategy should be formulated; Mintzberg et al ( 2003 p92) describe this as a prescriptive view of strategy. His model, the Five Forces Model, was based on the  bargaining power  in an industry between sellers and buyers, threats of substitutes and new entrants and the amount and intensity of rivalry in the market.

Mintzberg et al criticise the model in that in trying to determine how to achieve sustainable competitive advantage there are often insufficient differences between all industry players in the market. They detail Barney’s view of the importance of internal resources. Clearly we have already detailed the importance of the resources to any plan so it makes sense that for a business to succeed that consideration is given to who is bringing the resources together and what are the capabilities of a new firm.

If strategy is determined by reference to looking at current business models only and the competition that leaves firms in the position of the status quo. However the evolution of the internet has enabled a number of different business models to be created and utilised due to incorporating ideas such as disintermediation. Costs to the consumer of accessing goods for sale have for some become prohibitive due to car park availability in town centres and car park pricing policy of councils looking to add to income through taxing the motorist. Options of purchasing through different channels have therefore been welcomed by consumers and the high street now struggles due to variables including high rates, less turnover, loss in footfall etc and businesses that use clicks rather than bricks and mortar and remove the cost of sticking inventory in addition enable profits to be gained due to the different business models used. Digital disruption takes the need for different business models to a further level meaning that competition can be effective as different business. Ideas are used: industries which may have seen competition being limited through availability of capital instead are being challenged when the need for capital is less due to who holds the stocks as well as funding being possible through crowd funding enabling new businesses to succeed which in the past may have been more dependent on funding sources such as business angels or venture capitalists. The threat of entry therefore becomes higher.

Porter’s barriers of entry were detailed as “economies of scale, product differentiation, capital requirements, cost disadvantages, access to distribution channels and Government policy (2003 pp 96/97)”. However by doing business differently companies like Amazon have emerged to be new powerful players and shaken up the market. Many new businesses have been established by offering a minimum value product and the emphasis in skills needed by business is more about relationship marketing rather than a sales orientation or other philosophical approaches to marketing orientation.

Mingzberg et al (2003 p102) detail that’s the key to growth is to ” take a position less vulnerable to attack”. Clearly businesses that offer a minimum value product do this. Logically if a product is offered at the minimum then the only way to compete is by differentiating the product and adding value and price”. Whether the market will pay more for added value has historically depended on how the product was branded and the ability of communication agencies to add value through positioning and target appropriately to the right segment. There has though been an element of mistrust in advertising and if the reach of word of mouth is extended which is what happens with social media, because it is more believable a shift in communication activity and methods used also becomes important.

Mintzberg (2003 p 115) refers to Ansoff’s theories of strategies of ” market penetration, market development, product development and diversification”. He complains however that the model was not comprehensive which is why Porter’s generic strategies for competition detailed in the 1980s of cost leadership, differentiation and focus were proposed. Mintzberg also criticised these as being incomplete and posited the importance of determining the core business and considering whether it could be extended or elaborated.

Mintzberg (2003 p 120) detail six differentiation strategies; quality, design, support, image, price and undifferentiated that can be considered for competitive advantage. Had a report from the Growth Hub from a CEO who used both the canvas and the launch pad but only at the surface level.

Canvas gave ideas about how many points to put in and offered live help then it asks for hypothesis so assumes user knows what they are. Unsure whether should be entering null or not so will go with null on the basis of that is what should be tested. Guidance within the site gives clarity on this. The guidance can help frame thoughts but it is a case of GIGO.

Seems to be no way of saving information, first input was lost. Clearly canvas is an exercise in visual thinking. The requires hypothesis to be at which suggests provides focus. The instructions are wrong for someone accessing the canvas on a tablet. Subsequent discussions with author indicated this was because it was not optimized. Only 140 characters for elevator pitch, presumably so idea can be promoted through Twitter.

Seem to be unable to add in other members as part of the team in the trial. Based in America so resources are all in the Silicon Valley. Once launched does not go to a different page or allow opening in e books. Some start up resources there. Functionality annoying. Were system errors. Pop up goes over box so can’t type in hypothesis. Ticked had been completed when it had not. Does encourage you to think with tips e.g to consider why your business might fail. Sent first email which was responded to as soon as I had finished typing which suggested minimising the widget. Too many pages open in tablet to make it easy to read what I want to read. Got another system error which meant I could not even go back to the previous page. It just is not working on the iPad. Ben confirmed not optimised for the iPad. Went back to forum and checked other. Canvaniser has some info and opportunity for input. No free app though, links back to Toolbox. Open office solution does not want to open the zip file in Evernote on the iPad.

Mintzberg H, Lampbell J, Quinn JB and Ghoshal S (2003), The Strategy Process: Concepts, Contexts and Cases, Harlow: Pearson

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