Business Model Generation

​ A handbook for Visionaries, Game changers and Challengers

Main Tools & Concepts

• Business Model Canvas

Overview:
The business model canvas provides a very visual based introduction to the subject of business models which, at the time of its publication in 2010, was a step change in terms of the way that the subject was presented.

The book introduced the business model canvas, a diagram which visually represents up to 9 key components found in most business models.

Authors	Alexander Osterwalder, Yves Pigneur
Publisher	Wiley
Date	2010
Amazon (A)*	amzn.to/2XETX8x
Author's Website	www.strategyzer.com/books/business-model-generation​
Wikipedia	en.wikipedia.org/wiki/Business_Model_Canvas

Context within the 6 Step Strategy Framework

The business model canvas is used as one of the 4 primary diagrams in the 6-Step Strategy Framework since it acts as the connection between the External Environments Map (top right) and the Organisational Design Diagram (bottom left).

Whilst the 6-Step Strategy Framework often uses the business model canvas in its original form, the number of boxes, and even their arrangment can be tailored to the particular context of the organisation and its maturity, which can be indicated using S curves on the Key Numbers diagram (top right)



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Review:
by Huw Griffiths  10th Jan 2021

​Business Model Generation remains one of the most popular books on strategy of the last decade. 

Whilst not the first article, book, or model on business models, it provided a step change in the way that the concepts of business models were presented and used in practice. 
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The success of the book is based on the easy to understand and usable nature of the core tool described in the book - the business model canvas. The premise underpinning the business model generation is that most business models can be described using up to 9 common components.  The layout design of the canvas lends itself to helping the user identify which of these components are relevant in their business (or that of their competition) and how they interrelate with each other.  ​

The business model canvas was published at a time when a new wave of start-ups were looking to disrupt the corporate world, and a large number of corporates started to wake up to the risk of disruption.  The desire to understand business model innovation (and disruption) was a key consideration of that time as it was increasingly appreciated that business model innovation, either combined with or in addition to product innovation or process innovation, was a successful strategy to pursue. 

The term disruption had itself been previously defined in 1997 by Harvard Professor Clayton Christensen in his own ground-breaking book, The Innovator's Dilemma and its follow-on book The Innovator's Solution, in which Christensen described business models using a simpler " 3 box model" based on an understanding of Resources, Processes and Values.  This Christensen model would later be updated to include a fourth component - the profit model. 

I personally learned how useful a business model-based strategy could be when I worked for Dell Inc. in the late 90's / early 200O's.  Back then Dell was still aggressively pursuing what it called its Direct Model, which combined a direct sales model combined with a build-to-order manufacturing process which was overhauling the leading PC manufacturers of the day. 

However, I believe that the very visual-based layout and explanation of the business model canvas, combined with its free to use Canvas published under a creative commons licence, lead to the popularity of the business model canvas, and established it as a core tool in most strategy and innovation practitioners tool kit.

Whilst the Business Model Generation does contain some useful case studies of different business models, readers wanting to explore a wider range of business models should also read The Business Model Navigator - a book that identifies over 50 different business models and provides its own model regarding what key factors or components make up a business model.  

In addition, if you are looking to use the business model canvas to frame a new product or process innovation, consider reading The Ten Types of Innovation by Doblin, a 30+ consulting firm which is now owned by Deloitte.  I wrote an article comparing the business model canvas with Dobin's ten types framework which can be read here: 

Since the publication of The Business Model Canvas in 2010, the authors have added several other useful books to the series which now cover most of the end to end life cycle of an organisation from start-up to scale up to grown up companies looking to continually reinvent themselves. 

Other related material

Tool	Relevance
Value Proposition Design	Often very early stage companies find that it is too early for them to complete all the boxes in the busienss model canvas, and for them starting with the other book in the series - Value Proposition design which focusses on two of the boxes (Customer and Value Proposition) is a better place to start.
Business Model Navigator	Provides 55+ examples of different business models which have been derived from studying the different business models of thousands of firms
Doblin Ten Types of Innovation	Provides a checklist of 100+ common types of innovation which can be used for inspiration when developing new value proposition or process innovations.
The Innovators Dilemma	Value
The Innovators Solution	Value