Business Model Generation book review by Yves Pigneur and Alexander Osterwalder

Intro

I came across this book when Park Row Marketing was in the NatWest Entrepreneur Accelerator. This book will give you insight into the nature of business models. It shows you how you can turn industries completely on their head by using different channels of delivering your service.

They give examples of how companies have disrupted industries using business model innovation. For example, in the 1950’s Diners Club practiced business model innovation when they introduced the Credit Card. Check out the Business Model Generation book review below

Key messages from the book:

We’ve done this review a little differently from the other book reviews. Because it’s so detailed, we’ve taken some of their examples of how companies have disrupted their industries

iPod & iTunes dominated their competition

Apple launched their iPod, which worked with their online store. This was a combination of device, software and online store quickly disrupted the music industry. But Apple wasn’t the first company to bring out portable media players. How did Apple achieve such dominance? Because of their excellent business model:

• Seamless music experience with iPod devices, iTunes music and iTunes store
• Apple’s Value Proposition is to allow customers to easily search, buy and enjoy music digitally
• Apple negotiated deals with all the major record labels to create the world’s largest music library
• Their position was protected thanks to the integration between iTunes and iPod, shutting out the competition

Lego stays ahead with long tail business model

Lego has been running since 1949 and has released thousands of kits like space stations, pirates and the Middle Ages. Over time, competition have been fighting for a piece of Lego’s pie. Lego have stayed ahead by innovating with a long tail business model. They focused on making many specific Lego sets which many small groups of people would love to buy:

• License rights to use characters from blockbuster movies like Star Wars and Batman. This was an excellent revenue generator for them
• They created Lego Factory, allowing customers to make their own Lego sets and order them
• Going a step beyond mass customisation, Lego now sell the user designed sets to the public

Some Lego sets sell well, some sell poorly or not at all. What’s key is that they no longer focus on a small number of best-selling kits. They have made Lego more and more relevant by selling highly specialised kits

Nintendo wins business by focusing on casual gamers

PlayStation and Xbox fight it out for the top console for Gamers. Which one is best? I don’t know, ask my little brother.  They both continue to fight for a market share of the dedicated ‘hardcore’ gamers with excellent graphics, game quality and processor speed. Nintendo fell behind and was facing bankruptcy. So what did they do? The Wii has the exact same double-sided business model, but they focus on a huge audience of ‘casual’ gamers instead of the smaller ‘hardcore’ gamer market.

• Nintendo focused on the ‘fun factor’ with motion controlled, simple graphic games. This means that their technological innovation is much cheaper than Sony and Microsoft
• Focus in on a much larger market of ‘casual’ gamers
• Using the same double sided platform model, they generate revenue from both customers purchasing consoles and royalties from game developers

Who would enjoy this book

This book offers great insights into different business model types and explores how companies have been successful in using them. This book would be great for entrepreneurs planning their next stage of growth

Want to know more?

I hope you found the Business Model Generation book review useful! You can check out the book, it’s widely available if you search for it online. We also have an affiliate link here which you can use to take you right to the Amazon page