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Introducing the Enhanced Business Model Canvas

The Enhanced Business Model Canvas combines the Business Model Canvas with the Operating Model Canvas.

The Operating Model Canvas was proposed by Andrew Campbell, Mikel Gutierrez and Mark Lancelott in their recent book by the same name. (See to the right). The Business Model Canvas was proposed by Alexander Osterwalder and Yves Pigneur in their book "Business Model Generation". I previously blogged about it here.

In suggesting this combination, Campbell, et al, argue that it provides a more operational perspective to the left-hand side of original Business Model Canvas. This directly addresses "important issues such as people, organization structure, location and information systems that are critical to the operating model, but often given too little attention when thinking about the business model."

Here is an example of what an Enhanced Business Model canvas for Uber might look like.


(Please note: I have constructed this canvas by way of example only. I used publicly available information without any privileged knowledge of Uber. As such, I cannot vouch for its accuracy. If you do disagree with anything in this example, this will only serve to demonstrate the usefulness of the tool in fostering understanding.)

I drew the example above in StratNavApp.com. StratNavApp.com is the collaborative online tool for business strategy development and execution.

The  Enhanced Business Model Canvas provides more context and granularity than the original Business Model Canvas does. For starters, it considers 11 elements of the business model, compared to the original 9. And some elements have been altered. The changes are:
  1. Locations and Organisation have been added. These are both welcome additions.
    1. Location: Michael Porter's work on the strategic importance of location should be enough to convince you. If not, just think of the importance of, for example, Silicon Valley to the tech sector.
    2. Organisation: Please see my previous blog about why Structure follows Strategy.
  2. Key Partners and Resources have been removed. I would argue that they have, in fact, been replaced with Suppliers and Information respectively. In both cases, the new category appears to be slightly narrower than the original.
    1. In the case of suppliers, the greater specificity is probably a good thing. Distributors, for example, may be a Key Partner, but they fit more logically on the right side of the model, which focuses on customers, under Channels.
    2. The addition of Information is very welcome in today's data-intensive, big data-driven world. Some other Resources, such as a preferential Location, now have a home of their own. Others, such as patents or exclusive contracts may struggle to find a home in the enhanced model.
  3. Key Activities have been renamed as Processes. They are also placed within a horizontal chevron shape, instead of the non-descript blocks in which the other elements reside. I am neutral regarding the name change. Arguably, the shape and orientation of the category make absolutely no difference to the analytical process. However, I can't help but feel that the change highlights the active nature of the Key Processes. It also serves to make the model more distinctive.
Only time will tell whether the Enhanced Business Model Canvas will achieve the popularity of the original. For now, StratNavApp.com offers the ability to use either. Undoubtedly, it does add something to the debate on how best to understand, represent and analyse operating and business models. And I'd certainly be interested to hear your thoughts in the comments below.

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