Sample Paper on Business Model Canvas and Value Proposition Design


A business model is aimed at providing guidelines regarding how business practices are executed in an organization. Almost every organization that engages in business has such a model. Although it is desirable to have this model in blueprint, some organizations do not have their business models in blueprints. Instead, the models exist in the minds of those in the management teams. This can be tricky and confusing. This essay will develop a business model known as canvas together with its value propositions for a business idea that was developed two years ago by Abhilash Jayakumar (Brooks 2013, Para. 2). The idea involves developing a nutrition-tracking wristband capable of detecting the nutrient of the food one takes, stress and sleep levels. The aim of detecting these attributes is to offer actionable advices, improve sleeping patterns and ensure the person wearing the wristband engages in quality exercises. In relation to these aims, the product is best suited for diabetic patients together with the people that want to monitor their health conditions regularly.

Business model

To start with, this model has nine value propositions and all of these propositions will be evaluated individually. The model will be aimed at describing how the company will create, deliver and capture value for the proposed idea.  The nine value propositions include; customer segment, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships and cost structure.

Customer segment

This segment outlines the different groups of customers an organization aims to reach through its business model. As usual, customers tend to be the heart of businesses because without them business organizations cannot conduct businesses. For this reason, understanding the type of customers one intends to reach is a critical aspect in developing a business model. In order to do this perfectly, an organization may need to classify its customers into different segments. These segments may be dictated by customers’ needs and behaviors among other customer attributes (Osterwalder et al 2014, p. 26). Accordingly, understanding customers’ needs and their behaviors may be an important aspect in developing customer segment.

For the idea at hand, customers will be grouped into two segments. The first group will comprise of the customers with special needs. These will be the people that need special attention because of their health conditions. Such people will include diabetic patients and other patients that need to pay attention to physical exercises. The second group of customers will comprise of people that are sensitive to changes in their bodies without necessarily any form of health condition warranting them to engage in regular physical exercises. Although the health conditions for this people will not require special attention like those of the first group, it will be necessary for these people to monitor their health conditions regularly so that they do not develop health complications. Accordingly, apart from targeting people with health conditions that warrant special medical attentions, the company will also target people that are likely to develop health complications.


Value propositions

Once customer segments have been developed, there is need to identify the products and services that create value for various groups of customers. If this is conducted in the right way, it attracts customers, and this explains why some companies have more customers than others. For efficiency, each value proposition is expected to contain products/services that meet customers’ needs. Consequently, some value propositions may be similar to those that are already in the market whereas others may be unique (Osterwalder et al 2014, p. 6). For the proposed idea, tiny LEDs will be incorporate in the wristband to detect the stress and sleep levels as well as the nutrients for the food that customers take. The aim of going this will be to meet the needs of the customers that will purchase the product by creating value for them.


This block concerns itself with the methods that organizations utilize to communicate with their customers as well as reach their different customer segments to deliver value proposition to them. With regard to distributing products, business organizations can either own distribution channels or hire these channels. They can also combine the two methods as a way of ensuring that they reach as many customers as possible. In terms of communicating with customers, the proposed idea will advertise its product on television and on radio. It will also publish different types of posters and distribute them to potential customers. With regard to product distribution, the company will own distribution channels in major towns as well as enter into partnership with local hospitals (Osterwalder & Pigneur 2013, p. 3). The local hospitals in this case will be mandated with making recommendations and referring customers to various outlets as well as stocking the product in their stores. Whenever local hospitals refer customers, they will earn commissions. The partnership programme will be aimed at ensuring that potential customers will have access to the product whenever they need it. It will also be aimed at making sure that the company is able to distribute its product to different parts of the market. As for the after sale services, the outlets that sell the product will be mandated with ensuring that customers are satisfied with the product. They will also be mandated with training customers how to use the product.

Customer relationships

This building block concerns itself with the relationship that organizations develop with their customers. Depending on the nature of business, the relationship can range from automated to personal relationship. Certain factors such as customer retention, customer acquisition as well as boosting sales can determine the type of relationship that organizations develop with their customers. If the intention is to retain customers, then a relationship aimed at doing so should be developed. On the other hand, if the intention is to acquire new customers, a relationship of that nature should be developed. This notwithstanding, customer relationship should be established and maintained with each customer segment (Osterwalder & Pigneur 2013, p. 4).

The proposed idea will maintain two types of relationships with the customers. First, the sales representatives at various outlets will maintain personal relationship with customers once they purchase the product. This will be done during and after the sales process by ensuring that customers understand how to use the product they purchase from the outlets. It will also be done online by maintaining a contact email with the sales team. Second, given that prospective customers may require special attention because of their health conditions, the company will encourage its employees to offer personalized services to some customers. Although this will not be applicable to all customers, employees will be encouraged to develop such a relationship with the customers that require such relationship.

Revenue streams

This block is concerned with the amount of money an organization generates from each customer segment. It is also concerned with the way an organization generates revenue from its business ventures (Luchs, Swan & Griffin 2015, p. 291). The proposed idea is expected to generate revenue from the sale of the proposed product. Accordingly, each customer segment will be monitored to understand the amount of money that comes from it.

Key resources

This block is concerned with the resources that are required for the business model to operate efficiently. The resources can be either physical or intellectual depending on the nature of business. Given that different businesses require different resources, key resources should be identified carefully. For the proposed idea, physical resources that will be required will include vehicles, distribution networks and manufacturing facilities. Vehicles will be used in distributing the product once manufactured whereas manufacturing facilities will be utilized to process the product (Osterwalder & Pigneur 2013, p. 6). On the other hand, distribution networks will be utilized to distribute products to potential customers. Other resources that will be required for the model to operate efficiently include human resources and financial resources. Human resources will include the company’s workers whereas financial resources will include the amount of money required to manufacture the product.


Key activities

Once key resources for a business model have been identified, there are certain key activities that should be executed for the model to work perfectly. Such activities include distributing products to customers, solving customers’ problems and designing the right products. These activities are aimed at ensuring that a healthy relationship is maintained with customers, revenue is generated and customers get products when they need them (Luchs, Swan & Griffin 2015, p. 291). For the proposed idea, there will be the need to design and make a product. Once manufactured, the product will have to be delivered to the market so that customers can access it any time they need it. At the same time, there will be the need to communicate to the customers about the product. This will be done through advertising and through other means that will be at the disposal of the company. More importantly, there will be the need to generate revenue from the business venture so that the idea can be maintained.

Key partnerships

In most cases, business models cannot be executed in the absence of key partners. These partners help in distributing and marketing products, reaching customers and acquiring resources.

For the proposed idea, key partnership will be established with doctors at local hospitals, suppliers and product distributors. The relationship established with doctors will be aimed at ensuring that doctors explain the importance of our product to diabetic patients and other patients in need of our product in monitoring their physical exercises, stress levels and maintaining blood sugar at its normal level (Brooks 2013, Para. 3). The relationship established with suppliers will be aimed at ensuring that the company has raw materials for manufacturing the product. On the other hand, the relationship established with product distributors will be aimed at ensuring that the product reaches the market and customers can access it any time they need it.

Cost structure

The last and the most important aspect to consider in every business model is cost structure. This block evaluates all costs incurred in the execution of a business model. In relation to this fact, the block ought to be the last one in the development and implementation of a business model. Given that the proposed idea will be a value-driven idea, then the company will be less concerned with the cost of producing the product as it will be concerned with ensuring that the product is of high quality so that it can operate efficiently (Osterwalder & Pigneur 2013, p. 9). In spite of this fact, the company will be concerned with advertising cost so that it can run a profitable business. Accordingly, all cost incurred in producing the product will be factored in setting the price of the product.



Brooks, R., 2013. Nutrition-tracking wristband monitors calories, carbs & protein. [Online] (Updated 29 Oct. 2013) Available at: <> [Accessed 23 Feb. 2016].

Luchs, M., Swan, S. & Griffin, A., 2015. Design thinking: new product development essentials from the PDMA. Hoboken, New Jersey: John Wiley & Sons Inc.

Osterwalder, A. et al., 2014. How to create products and services customers want: get started with … Value proposition design. New Jersey: Hoboken, NJ, Wiley.

Osterwalder, A., & Pigneur, Y., 2013. Business model generation a handbook for visionaries, game changers, and challengers. New Jersey: Hoboken, N.J., Wiley.