Business models, the canvas and co-creation

Accounting Ahead | Original study resource | accountingahead.com.au

Business models, the canvas and

co-creation

MODULE 7 | 7.2.1 | STUDENT COMPANION

A business model sets out how an organisation runs and the economic logic that makes it pay: a system

of interacting features, often described as a customer value proposition, a profit formula, key resources and

key processes. A strategy explains how the organisation will outperform rivals or keep creating value. Two

gyms with the same low-cost, self-service model can follow different strategies (inner-city clusters versus

outer suburbs without rivals).

Business model innovation changes at least one element so the organisation creates or captures value

differently; formally, a design process that launches a substantially new model by changing the value

proposition, the arrangement of partners that delivers it, or both. Most managers rate it above new products or

services, but it lasts only if it is hard to copy. It is pursued by newcomers, by incumbents seeking an edge, and

by firms reacting to threats, and it is hard because of uncertainty and internal barriers.

The business model canvas

Key partners

Which suppliers and allies

provide resources and

activities?

Key activities

What must we do?

Key resources

What must we have?

Value propositions

What problem do we solve,

and with what bundle?

Customer

relationships

How do we win, keep and

grow customers?

Channels

How do we reach each

segment?

Customer segments

Who do we create value

for?

Cost structure

Which resources and activities cost most?

Revenue streams

What will customers truly pay for, and how?

Pale: infrastructure. Navy: the offering. Cream: customers. Teal: financial viability

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Accounting Ahead | Original study resource | accountingahead.com.au

The canvas in four groups

Group Blocks Key questions

Customers Segments, channels,

relationships

Who matters most? How do they want to be reached,

won and kept?

Offering Value proposition Which problem do we solve, with what bundle?

Infrastructure Activities, resources, partners What must we do and have, and who helps?

Financial viability Revenue streams, cost structure What will customers pay for, and what costs most?

Revenue minus cost gives profit

Testing a new configuration (imagined)

Block Today: classroom courses Tested: online subscription academy

Customer segments Accountants and managers in five cities The same, plus regional learners and employers

Value proposition Expert-led, face-to-face courses Learn anytime in short modules, with live sessions

Channels and relationships Employers, website, the classroom App and platform; online community

Revenue streams One-off course fees Monthly subscriptions, often paid by employers

Key resources and activities Trainers, venues, running courses Learning platform, video library, content production

Key partners Professional bodies Professional bodies and a cloud platform provider

Cost structure Trainers and venues Platform fees and content production

One change, from fees to subscriptions, ripples through almost every block

The subscription arithmetic (imagined)

Subscribers 2,000

Monthly fee $40

Recurring revenue a year: 2,000 x $40 x 12 $960,000

Steadier than seasonal course fees, but the platform and library are paid for up front

Dominant models and transformation. Most industries settle on a dominant model, the most efficient way to

turn resources into value with the technology of the time. When someone introduces a better model and gains an

advantage, rivals must adopt it or leave. Most new models are evolutions, but they are appearing faster than

ever, and a model's connections with outside organisations matter more than ever.

Co-creation in ecosystems. An organisation's success can be explained by its fit with its ecosystem and the

ecosystem's overall performance, so managers need resilience and flexibility to evolve with partners; entering a

new market means assembling a new ecosystem. Contributing to open innovation can bring intrinsic rewards

GLOBAL STRATEGY AND LEADERSHIP | M7 | 7.2.1 | STUDENT COMPANION

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Accounting Ahead | Original study resource | accountingahead.com.au

(satisfaction), social rewards (standing in the community) and extrinsic rewards (learning, reputation). Partners

cooperate to create value and compete to capture it.

Value co-creation in an ecosystem (imagined)

Co-creation with customers

Members record short case videos for the library

Learners vote on new course topics

Social media and online tools make dialogue easy

Co-creation with businesses

Specialist courses co-designed with large employers

Development costs and risks shared

Built on trust and strong ties between managers

Partners cooperate to create value, and compete to capture it

Case note: Hilti Fleet Management

Hilti, the Liechtenstein-based maker of professional power tools, traditionally sold tools outright to construction

firms. Around 2000, starting in Switzerland, it introduced fleet management: instead of buying tools, a customer

pays a fixed monthly fee for a managed fleet, usually over three to five years, with repairs, replacements, loan

tools and tool tracking included. The service reached 40 countries by 2015, and about 3 million tools were under

fleet contracts by 2021. Customers gain predictable costs and working tools; Hilti gains long-term relationships

and steadier revenue. The products barely changed, but the value proposition, revenue stream and customer

relationship changed completely.

Sources: Hilti Group, 'Twenty-five years of Fleet Management' (2026); Hilti annual report 2021; Harvard Business School case 'Hilti Fleet

Management (A)'.

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Accounting Ahead | Original study resource | accountingahead.com.au

Practice questions

MODULE 7 | 7.2.1 | TRY THESE BEFORE THE WORKED ANSWERS

Question 1 - Complete a canvas

Block Spoke & Spanner (an imagined mobile bicycle-repair business)

Customer segments

Value proposition

Channels

Customer relationships

Revenue streams

Key resources

Key activities

Key partners

Cost structure

Question 2 - Which blocks change?

Business model innovation Blocks that change

(a) A printer maker charges per printed page through a service

contract

(b) A bakery starts selling through a food-delivery app

(c) A gym adds a cheap, app-only 24-hour membership for

students

(d) A winery stops selling grapes in bulk and starts its own wine

club

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Question 3 - Design a co-creation initiative

Meeple Works (an imagined board-game publisher) wants fresh game ideas and a loyal community. Design one

customer co-creation initiative and one business-to-business initiative, and explain how value is created and how

Meeple Works captures its share.

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Accounting Ahead | Original study resource | accountingahead.com.au

Worked answers

MODULE 7 | 7.2.1 | WORKED ANSWERS - ATTEMPT THE QUESTIONS FIRST

Question 1 - Spoke & Spanner (sample)

Block Sample

Customer segments Commuters, families and cycling clubs in one city

Value proposition Repairs at your home or office, booked online, same week

Channels Website and app; club partnerships; social media

Customer relationships Reminders for servicing; a membership plan

Revenue streams Per-repair fees; annual service memberships; parts

Key resources Equipped vans, skilled mechanics, booking software

Key activities Repairs, scheduling, parts purchasing

Key partners Parts wholesalers, bike shops for big jobs, clubs

Cost structure Wages, vans and fuel, parts, software

Question 2

Innovation Blocks that change

(a) Pay per page Revenue streams, customer relationships, key activities (servicing)

(b) Delivery app Channels, key partners, cost structure (commissions)

(c) Student app-only membership Customer segments, value proposition, channels, revenue

(d) Own wine club Customer segments, value proposition, channels, revenue, activities

Question 3 - Meeple Works (sample)

Customer co-creation: an online design challenge where players submit and vote on game ideas; winners

earn royalties and credit. Value: fresh ideas and a loyal community; capture: Meeple Works owns publishing

rights and sells the games.

Business co-creation: co-develop an educational game with a teachers' association that shares testing and

promotion costs. Capture: agree IP ownership and revenue shares in the contract at the start.

GLOBAL STRATEGY AND LEADERSHIP | M7 | 7.2.1 | WORKED ANSWERS

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