Business Model Generation: A Handbook for Visionaries, Game Changers and Challengers
by Alexander Osterwalder and Yves Pigneur
Publisher: John Wiley & Sons (2010)
Reviewed by: Julie Garland McLellan*
How does your company create value? Can you explain that convincingly to sceptical investors, inquisitive shareholders or crucial members of staff?
This little book is deceptively bright and shiny, with friendly graphics in a quasi-handwritten format, but don't be fooled; it has a hard and well researched foundation of practical business insight. The guts of the book are its defined models for business - the basic model contains elements such as key partners, key activities, key resources, cost structure, value proposition, customer relationships, channels, customer segments and revenue streams with the extended model adding social and environmental costs and benefits as a foundation.
These are well introduced and illustrated with worked examples based on familiar businesses. Having used the models to explain what is happening in an existing business the book then takes the reader into the unknown and investigates the way in which the business model can be used to unify strategic analysis and highlight areas of value creation potential. This was so exciting I actually stopped reviewing and started running Bounty Mining through the analysis. Brilliant!
The section on understanding the business model environment would give a pleasant (and useful) structure to those dreary brainstorming sessions on 'what's happening in the world' and kick start talk about 'if that is happening how do we benefit?'
From understanding the model and how it fits within a given environment the book then takes the reader into a section on evaluating different models and selecting the ones that best suit the needs of the stakeholders in the foreseeable future. I particularly enjoyed the blend of the business model with the blue ocean strategy tool. There is a section on managing multiple models within one organisation which will be valuable for directors and managers of multi-unit businesses.
In essence this book is a simple but powerful tool for generating insight to help understand, design, implement and reinvent businesses. The content is visually appealing as well as mentally stimulating and, with the lucid and simple prose, aids rapid learning. If I had to find a criticism it would be the shape - the book is wider than it is tall and that makes it uncomfortable to read when holding in one hand and busy with the other. However, it was designed to lay open on a desk and guide the readers' thoughts into a structure that allows good decisions. It excels at that. I can't really fault it no matter how hard I try - I loved it!
Available at Amazon.com in both Kindle and hard copy.
* Julie Garland McLellan is a professional non-executive director, board and governance consultant and mentor. She is the author of "Dilemmas, Dilemmas: Practical Case Studies for Company Directors", Dilemmas, Dilemmas II: More Practical Case Studies for Company Directors (Volume 2), "The Director's Dilemma", "Presenting to Boards", "All Above Board: Great Governance for the Government Sector" and numerous articles on corporate strategy and governance.