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Documenting and Developing Business Models
The “Business Model Generation” methodology is an essential aid to all business owners and consultants, who want to document, communicate and brainstorm businesses models in a succinct manner.
The book “Business Model Generation” by Alexander Osterwalder & Yvess Pigneur provides great examples of how to document business models, along with methods to brainstorm innovative changes in business models for existing businesses.
If you like visual aids, then you are going to love the techniques described in this must have book. What struck me, biased as I am toward visual tools, is how their visual models encapsulate the linkage and dependency on the key elements of the business in one page.
The base technique describes uses a common base canvas to capture the core building blocks of your business model: Key Partners (FP), Key Activities (KA), Key Resources (KR), Value Proposition (VP), Customer Relationships (CR), Channels (CH), Customer Segments (CS), Cost Structures (CS) and Revenue Streams (RS).
A simple example of how this would work for apple’s I-pod is shown below:
Once the base or existing model is created the book then helps you explore the opportunities to explore other alternative business models. Some example business models described in the book include:
- Unbundling Business Models
- The long tail
- Multi sided platforms
- FREE as business model
- Open Business Models
Key techniques described include brainstorming with the use of post-it notes against the base canvas, as well as my old chest nut of customer value propositions and what’s in it for customers. Once you have your model developed with post it notes, you can really go to town and prepare a visual form of your business with pictures.
BTW: Do not be put off by the 72 page book preview available on their web site http://www.businessmodelgeneration.com/. As a result of my pre-read of the preview I nearly didn’t buy the book. So glad I did purchase, based on a recommendation (thanks Matt McKendry). My order on amazon was delayed waiting for a reprint, so hopefully they now have plenty in stock.
This book is now going on my must read list for entrepreneurs, order your own copy now
Post Ed note: I now run workshops which include this methdology - www.growthmanagement.co.nz/training
After using this model for some time I have come up with my own variant read more>
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