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Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

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Thursday, May 16, 2013

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers

Author: Visit Amazon's Alexander Osterwalder Page | Language: English | ISBN: 0470876417 | Format: EPUB

Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers Description

Amazon.com Review

Business Model Generation is a handbook for visionaries, game changers, and challengers striving to defy outmoded business models and design tomorrow's enterprises. If your organization needs to adapt to harsh new realities, but you don't yet have a strategy that will get you out in front of your competitors, you need Business Model Generation.

Co-created by 470 "Business Model Canvas" practitioners from 45 countries, the book features a beautiful, highly visual, 4-color design that takes powerful strategic ideas and tools, and makes them easy to implement in your organization. It explains the most common Business Model patterns, based on concepts from leading business thinkers, and helps you reinterpret them for your own context. You will learn how to systematically understand, design, and implement a game-changing business model--or analyze and renovate an old one. Along the way, you'll understand at a much deeper level your customers, distribution channels, partners, revenue streams, costs, and your core value proposition.

Business Model Generation features practical innovation techniques used today by leading consultants and companies worldwide, including 3M, Ericsson, Capgemini, Deloitte, and others. Designed for doers, it is for those ready to abandon outmoded thinking and embrace new models of value creation: for executives, consultants, entrepreneurs, and leaders of all organizations. If you're ready to change the rules, you belong to "the business model generation!"

The Power of “What If” Questions
Content from authors Alexander Osterwalder and Yves Pigneur
We often have trouble conceiving innovative business models because we are held back in our thinking by status quo. The status quo stifles imagination. One way to overcome this problem is to challenge conventional assumptions with “what if” questions. With the right business model ingredients, what we think of as impossible might just be doable. “What if” questions help us break free of constraints imposed by current business models. They should provoke us and challenge our thinking. They should disturb us as intriguing, difficult-to-execute propositions.

What if...
…furniture buyers picked up components in flat pack form from a large warehouse and assembled the products themselves in their homes? What is common practice today was unthinkable until IKEA introduced the concept in the 1960’s.

…airlines didn’t buy engines for their airplanes, but paid for every hour an engine runs? That is how Rolls-Royce transformed itself from a money-losing British manufacturer into a service firm that today is the world’s second biggest provider of large jet engines.

…voice calls were free worldwide? In 2003 Skype launched a service that allowed free voice calling via the internet. After five years, Skype had acquired 400 million registered users who collectively had made 100 billion free phone calls.

Review

'...an impressively comprehensive compendium of many of the most current ideas concerning the structure and development of businesses.' (Anglohigher.com, May 2011). '... this handbook is likely to prove an excellent help for evaluating business models'. (Anatello.com, July 2011).
See all Editorial Reviews
  • Product Details
  • Table of Contents
  • Reviews
  • Paperback: 288 pages
  • Publisher: Wiley; 1 edition (July 13, 2010)
  • Language: English
  • ISBN-10: 8126533676
  • ISBN-13: 978-0470876411
  • ASIN: 0470876417
  • Product Dimensions: 7.5 x 9.5 x 0.8 inches
  • Shipping Weight: 1.4 pounds (View shipping rates and policies)
This is an absolutely superb book and my first and only book on business models. It is so up to date and filled with gems that I feel no need to read another anytime soon.

The book is aptly titled, being all about how to generate business models. However, you have to know what it is before you can generate it. To this end, the first section of the book is devoted to introducing a standard language and format for talking about business models. They introduce nine key items which serve as the building blocks for all business models. These are listed below, illustrated with Skype's business model.

CUSTOMER SEGMENTS: Who will use the product?
1) web users globally 2) people who want to call phones

VALUE PROPOSITION: Why will they use the product?
1) free Internet and video calling 2) cheap calls to phones (SkypeOut)

CHANNELS: How will the product be delivered to the customers?
[...] and headset partnerships

CUSTOMER RELATIONSHIPS: how will you develop and maintain contact with your customers in each segment?
Mass customizedMass customized

REVENUE STREAMS: How is revenue generated from which customer segments?
1) Free 2) SkypeOut prepaid or subscription

ACTIVITIES: What are the key things that you need to do to create and deliver the product?
Software development

RESOURCES: What assets are required to create and deliver the product?

PARTNERS: Who will you want to partner with (e.g suppliers, outsourcing)
Payment providers, Distribution partners, Telco Partners

COST STRUCTURE: What are the main sources of cost required to create and deliver the product?
I purchased this book to refine what I know about business models, which always seemed like an ill-defined concept when found in popular writings and even through my business school experience. I wanted to know about the fundamentals of a business model and its creation as well as providing sound examples of business model structures along with the underpinnings of when they work and why. This book seemed perfect for my undertaking but falls short of an essential book on the subject, coming off merely as an overview with some random unrelated business topics thrown in for good measure.

One problem that proliferates throughout the book is in how it categorizes components when dissecting model elements. Their categories are time and again overlapping and incomplete - thus appearing arbitrary. For example, when detailing the different types of revenue streams, the following categories are given as distinct and complete: Asset Sale, Usage Fee, Subscription Fee, Lending/Renting/Leasing, Licensing, Brokerage Fees, and, Advertising. How would you categorize the hotel business? The authors put this under Usage Fee. Why? It seems a lot like Renting to me. How about Gillette's razor blade model? The authors talk about it later in the book (termed the Bait-And-Hook model), but do not categorize this type of revenue stream here. Odd. But the overarching problem is that the categorization throughout the book is consistently arbitrary, and reminds me of Michael Scott from The Office proclaiming, "There are four kinds of businesses: tourism, food service, rail roads, and sales, ... and hospitals/manufacturing, ... and air travel".

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