INTRODUCING THE BUSINESS MODEL CANVAS
In 2010, Alexander Osterwalder and Yves Pigneur published Business Model Generation: A Handbook
for Visionaries, Game Changers and Challengers.1 This book introduced the notion of the Business
Model Canvas, a tool and shared language for describing, visualizing, assessing and changing business
This book is used as a primary text in the UT Dallas course ENTP 6390 Business Model Innovation
developed by Dr. Joseph C. Picken and taught in the graduate program at the Naveen Jindal School of
This Teaching Note briefly summarizes the key concepts of the Business Model Canvas based on
Business Model Generation and supplemental materials developed for ENTP 6390. The core concepts of
the Business Model Canvas are detailed more fully in Business Model Generation.
WHAT IS A BUSINESS MODEL?
Peter Drucker observed that: “Every organization is based on a “theory of the business” – a set of
assumptions that define an organization‟s purpose, shape its behavior, dictate its decisions about what to
do and what not to do, and define what the organization considers meaningful results.
“A „theory of the business‟ that is clear, consistent, focused and aligned with the realities of the market
can be is extraordinarily powerful – but if grounded in a set of assumptions which are no longer valid, the
theory will lead to failure.”
A business model reflects that set of assumptions, captures the essence of how a business will be focused,
and provides a concise representation of how an interrelated set of decision variables will be addressed to
create a sustainable competitive advantage in a targeted market
Business models are, at their heart, stories that explain how enterprises work: in essence, a “theory of the
business”. A business model answers the fundamental question: “How do we organize our business to
make a profit as we create value for our customer?”
The elements of a...