Business Model Generation
By Alexander Osterwalder & Yves Pigneur.
What is the book, Business Model Generation, about and what are the authors telling us in it?
The book, Business Model Generation, helps define the key elements which lead to great entrepreneurial ventures. The main purpose of the book is to help companies devise great strategic plans for a successful future; highlighting all the factors which determine the success and failure of businesses today. Whether the business seeks out to start up a new venture or whether a business has hit a stagnant point in a harsh competitive environment, the Business Model Generation helps the readers devise a new strategy and identify where or how to turn the boat into a different direction.
The writers of the book, Alexander Osterwalder & Yves Pigneur, have compiled the data which has been co-created by practitioners from around 470 different countries. The co-creators have dedicatedly conducted great research and successfully devised the strategy to help entrepreneurs start up a business effectively and efficiently.
The book is about designing a business model and defining the key factors which determine the success and failure of a business. Each and every company has a business model defined implicitly or explicitly in some way or the other. When such people are not aware of how to perfectly undergo such a practice, generate a business model, they seem to miss out on some factors.
The above mentioned negligence can lead to a great loss and often towards failure at times. The authors of this book tell us the most important elements which companies have to look upon before devising a strategy and also the ways to design the strategies in accordance to the factors defined in the business model.
As the title of the book goes, Business Model Generation, the authors mainly focus on the key elements which need to be highlighted and given a great amount of attention.
The book promotes the business model canvas as a template of an optimal business model. The business model canvas has been designed in a fashion in which all the important factors which require keen attention are all presented in a single layout. A single layout is highly necessary before starting up an entrepreneurial venture or devising a strategic plan as then all the key factors are given an optimum amount of attention and none are neglected.
Following are the nine key blocks to develop a successful business model for a flourishing enterprise, which the 470 practitioners have defined.
- Customer Segments – for whom the business is operating and creating value. A company can be targeting similar individuals or a group of different segments.
- Value Propositions – identifying how the business is creating value for its customers and supplying them what they need/want.
- Channels – how the business seeks out to reach its customer segments with the value propositions it has to offer.
- Customer Relations – the measures which the business takes to maintain healthy relations with its customer segments.
- Revenue Streams – after having supplied the customer segments with what it desires, the business looks forward to generating a profit from the healthy relationship.
- Key Resources – the assets required by the business in order to supply the customer segments with the value proposition the business has established for.
- Key Activities – the main elements which the company or business needs to focus upon in order to produce the value proposition for the customers.
- Key Partnerships – identifying suppliers/partners which allow the business model to function and operate successfully.
- Cost Structure – recording all the costs which the business model incurs in order to operate successfully.
After reading the book and getting a hang of how the business model canvas functions, you can use the tool to easily share it with your internal or external stakeholders and also with your business partners. The business model canvas is highly friendly and the tool allows you to put up sticky notes easily wherever you choose to on the canvas. You are given two links before starting a business model canvas, one which you can use to edit the model, and the other which you can use to share the data so that no one else change it, maintaining security.
The authors have proclaimed in the book how to successfully generate a business model. The main purpose of the business model is to define how to create a value proposition for the customers, create a healthy relationship with the customers, and how to insure profits in return. In order to create a great model, no matter which phase of a business life cycle your company currently lies in, it’s important that you know the proper route; the proper recipe to devise the perfect business model. The Business Model Generation by Alexander Osterwalder & Yves Pigneur has set out to do the following.
If you wish to acquire the book, it is available on Amazon at a very economical price. Also, if you wish to get a glance of what the book has to offer, a 72 page preview is available completely for free on the official business model generation website, i.e www.businessmodelgeneration.com/book.