Business Model Generation -Part I-

1 Feb, 2010

business model book1

Do you have an entrepreneurial spirit?
Are you constantly thinking about how to create value and build new business, or How to improve or transform your organization?
Are you trying to find innovative ways of doing business to replace old, outdated ones?

These are the questions that Business Model Generation book starts with. And if you answered “yes” to any of these questions above, this book is a must for you!

From iPhone to google.com, from modern telcos to Wii and Facebook, from Skype to the RedHat’s open source Model. All these success stories are based on new business models or similar ones. In which this book tries to unpuzzle and offer a way to describe, analyze and design business models and help you come with your new one.

” A Business model describes the rationale of how an organization, creates, delivers and captures value.”

The book offer an easy to use concept that allows you to describe and think through a business model of your organization, your competitors, or any other enterprise. This concept as the book says has been applied and tested around the world and has been used by companies such as IBM, Ericsson, Deloitte and many others.

The concept is based on 9 basic blocks that shows how the company will make money:

1- Customer segment: the group/s of people the enterprise aims to reach and serve.
2- Value proposition: the bundle of products and services that creates values for a specific customer segment.
3- Channels: how the company communicate and reaches customers segment to deliver its value proposition
4-Customer relationship: the types of relationship a company establish with specific customer segment, it can range from personal, automated, community, self service, etc.
5- Revenue streams: the heart of the model, where the cash will come from?
6- Key resources: physical, financial, intellectual, or human resources required for the business model to work.
7- Key activities: key action to make the business model work.
8- Key partnerships: partners and suppliers to make the business model work.
9- Cost structure: to all of the above.

The book which is co-created by 470 strategy practitioners ( including Mohammad Khawaja of QRCE) is must to any entrepreneur and creative thinker. As one of the handy things is the book simplicity and the use of visuals to get help you evolve. for example the above blocks are visualized in a canvas which helps you describe and analyze and design a business model.

biz model

In future posts I will highlight some of the books mentioned blocks, patterns and apply iPad to the canvas. My next post will walk you through value propositions elements.

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  1. Khalid  |  February 2nd, 2010 at 6:25 AM #

    Looking forward for the next post.

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