Business Model Generation – Part5 – Process & Final Words
In this chapter we tie together the concepts and tools from the book to simplify the task of setting up and executing a business model design initiative.
The process the authors describe provides a starting point upon which just about any organization can customize its own approach. The process has five phases:
The progression through these phases is not linear. In particular, the Understanding and Design phase tend to proceed in parallel. Business model prototyping can start early in the Understanding phase, in the form of sketching preliminary business model ideas. Similarly, prototyping during the design phase may lead to new ideas requiring additional research. Finally the last phase, Manage, is about continuously managing our business model(s).
For each process phase the authors outlined the objective, focus, and which content in Business Model Generation supports that phase within a table in the book. For that great table take a look inside the book or send me a message – it´s a table discribing the mentioned objects in great detail!
- Objective: Prepare for a successful business model design project
- Focus: Setting the stage
- Description: Assemble all the elements for successful business model design. Create awareness of the need for a new business model, describe the motivation behind the project, and establish a common language to describe, design, and analyze and discuss business models
- Book sections: Business Model Canvas, Storytelling
The authors discussed every single object like Mobilize.
Business models and Business plans
The purpose for a business plan is to describe and communicate a project and how it can be implemented, either inside or outside an organization. The motivation behind the business plan may be to “sell” a project, either to potential investors or internal organizational stakeholders. In fact, the work we may have done designing and thinking through our own business model is the perfect basis for writing a strong business plan.
The authors suggest giving business plans a five-section structure:
- (The Team)
- The Business Model
- Vision, Mission, and Values
- How our business model works
- Value Proposition
- Target Markets
- Marketing Plan
- Key Resources and Activities
- Financial Analysis
- Breakeven Analysis
- Sales Scenarios and Projections
- Capital Spending
- Operating Costs
- Funding Requirements
- External Environment
- The economy
- Market Analysis and Key Trends
- Competitor Analysis
- Competitive Advantages of our Business Model
- Implementation Roadmap
- Projects, Milestones, Roadmap
- Risk Analysis
- Limited Factors and Obstacles
- Critical Success Factors
Implementing Business Models in Organizations
It´s about turning our business model into a sustainable enterprise, or implementing it in an existing organization. We place the business model in the middle of a start holding five areas together:
- Skills/mindest: What kinds of people with what skills does our business model require? What type of mindset is needed?
- Direction: What are our strategic goals? How do they drive the business model?
- Power: What type of organizational structure does our business model require?
- Information: What information flows, processes and workflows does our business model require?
- Motivation: What reward system does our business model require? How can we motivate our people?
That´s it. A brief summary of “The Business Model Generation” by Osterwand & Pigneur. My personal opinion about the book is that if you are interested in this topic the first half of the book is a must-read. Especially working with the Business Model Canvas is great for the creative process of brainstorming and building a business model step by step.
Later on the mix of theoretical and practical stuff is sometimes pretty tough. Some pages discuss trivial stuff and the following page is a sheet with what seems like a ton of different information.
You can give it a try, but at least you should think about the stuff mentioned in this summary and play around. Don´t hesitate to contact me for further information if you´re interested.
The Business Model Generation