An independent study reference written by Dr Phuc V. Nguyen. It is not official subject material — for assessment requirements always follow your subject outline and vUWS.
Mapping the business model
Analysts are handed data, not context. Mapping the business model is how you work out what the organisation actually sells, to whom, at what cost, and where a number could change a decision. Two durable devices do most of the work. The business model canvas, a Strategyzer framework published by Osterwalder and Pigneur, lays out nine blocks covering customers, value proposition, channels, relationships, revenue streams, key resources, activities, partners and cost structure. The value chain traces primary activities from inbound logistics through operations to sales and service, with support activities alongside. Both exist to answer one analyst question: which parts of this organisation have a number attached to a decision.
Why it matters
Before you can help, you have to know how the money moves. Draw the organisation as boxes for who pays, what they get, what it costs to give it to them, and who does the giving. Then walk the boxes and ask three questions of each one. Is there a number here. Does anyone record it. Would anybody behave differently if it moved. Boxes that answer yes three times are where your work will matter.
Mapping a meal-kit business shows revenue concentrated in a small group of frequent customers and cost dominated by delivery distance. The request was to build a churn model. What does the map suggest?
Formulas
Worked examples
A meal-kit subscription business asks for a churn model. Mapping the canvas first shows revenue concentrated in a minority of high-frequency customers, and a cost structure dominated by delivery distance rather than ingredients.
The map moves the question. Preventing an individual cancellation is worth roughly one customer margin, and the model can only shift the odds slightly. Choosing which postcodes to serve changes the delivery cost on every order in that area, permanently, and the firm controls it outright. So the higher-value question is a coverage decision, not a churn prediction. The churn model may still be built, but it now sits second. This is the usual payoff from mapping: the requested analysis is rarely the most valuable one available.
A not-for-profit asks its new analyst to "improve customer analytics". The analyst maps the model before touching the data.
The map reveals two distinct groups that a commercial canvas would collapse into one. Donors provide the revenue. Beneficiaries receive the value proposition. They are different people with different data, different channels and different decisions attached. Building a single customer view would have mixed them and produced metrics that describe neither. The mapped version yields two clean question sets: donor retention and cost per donor acquired on one side, service reach and unit cost of delivery on the other.
Common mistakes
- ✗The canvas is a strategy document. It describes how an organisation currently operates. It contains no judgement about whether that arrangement is wise, and treating a description as a recommendation is a common way to endorse a failing model.
- ✗Every block deserves equal analytical attention. Only blocks that carry a number, that the organisation actually records, and that somebody acts on are worth a project. A block with a number and no recorded data is a data collection proposal, and a block with data but no decision-maker is reporting with nothing attached.
- ✗Mapping the business model is the strategy team's job, not the analyst's. An analyst who cannot say in two sentences how the organisation makes money will produce technically correct answers to questions nobody asked, and will not notice when the request itself points at the wrong block.
- ✗Revenue is the value proposition. The value proposition is what the customer receives. Revenue is the share of that value the organisation captures. Confusing the two produces metric sets that track the firm closely and the customer not at all, which is how satisfaction collapses while the dashboard stays green.
Revision bullets
- •Canvas: nine blocks covering customers, value, channels, revenue, resources, activities, partners, costs
- •Value chain: primary activities plus support activities
- •Test each block for a number, a record and a decision-maker
- •Number but no record = a data collection project
- •Record but no decision-maker = reporting with nothing attached
- •Lifetime value and acquisition cost link the revenue and cost blocks numerically
Quick check
Mapping a meal-kit business shows revenue concentrated in a small group of frequent customers and cost dominated by delivery distance. The request was to build a churn model. What does the map suggest?
A canvas block carries a number the organisation records reliably, but no person whose behaviour would change if that number moved. What is that block?
Connected topics
More in How Analytics Gets Built
Sources
- Osterwalder & Pigneur (2010)Osterwalder, A., & Pigneur, Y. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers. John Wiley & Sons, 2010.Defines the nine-block business model canvas named here.
- Strategyzer AG. "Usage of Our Tools." Terms of use covering the business model canvas and related frameworks.The canvas is a Strategyzer AG framework and is attributed to its owners. Only the explanation around it is original to this atlas, and the site licence covers that original expression rather than the third-party frameworks and cited works it discusses.
- Porter (1985)Porter, M. E. Competitive Advantage: Creating and Sustaining Superior Performance. Free Press, 1985.Source of the value chain, separating primary from support activities.
- Gupta & Lehmann (2003)Gupta, S., & Lehmann, D. R. "Customers as Assets." Journal of Interactive Marketing, 17(1), 9-24, 2003.Derives the discounted customer-value expression used here, with margin, retention rate and discount rate as separate inputs, and states the assumptions it requires.