The Osterwalder model surprises with its simplicity compared to other similar business solutions. It allows you to identify weaknesses in the company and quickly assess any business project.
This model was developed with the Swiss business theorist Alex Osterwalder as part of his doctorate. Subsequently, this model, also called Business Model Canvas, was developed in the "Business Model Generation" guide (published in Poland as "Creating Business Models", Onepress. 2012). Already at this stage, it was tested in practice by 470 company owners from different countries, thanks to which the model gained the fame of an easy-to-use tool, combining the world of science with everyday business.
What is the Osterwalder business model?
Briefly, the Osterwalder model shows the main components of an organization, its infrastructure, finances and the market in which it operates. It helps the company to identify strengths and weaknesses, and to link the expected results with the actions that need to be taken. Everything is based on nine areas:
Infrastructure
- key partners,
- key activities,
- key resources,
Offer
- value proposition (value proposition)
Customers
- relationship with the client / clients,
- channels,
- customer segments,
Finances
- sources of income.
- cost structure,
They will be discussed in more detail below.
What elements does the Osterwalder business model consist of?
The Osterwalder model consists of various segments, which are divided into nine parts for which the model is known. At the beginning, you need to identify those related to infrastructure, i.e. resources that the company already has and those that it must have. In Osterwalder's book, the maximally optimized supply of raw materials necessary for their production is mentioned as an example of the key activities for the manufacturer of Bic pens. Key resources can relate to any area: capital, team, ideas, etc. Partners are companies, people or organizations without which the company's operation would not be possible.
Another element of the presented model is the offer, which lists the specific value that the company can provide. It may be price, quality or other factors important from the customer's point of view (e.g. the most efficient, the most beautiful, etc.).
The Osterwalder model also takes into account the customer structure. This is the stage at which you can assess whether the market is mass or niche, or you can talk about segmentation etc. The channels of reaching customers and the ways in which the company cares for them are also distinguished (customer service, automation, self-service, etc.). The last area is finance, and there are two pillars in them: revenue streams and costs, without which the company will not function.
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Why this business model works?
The Osterwalder business model surprises with its precision and versatility. People who once assisted in the creation of businesses know that the most common reason for their failure is the lack of a proper business plan. For an experienced entrepreneur, a glance at the business idea is enough to notice that the assumed costs are too high or that the customer acquisition channels are too limited and uncertain.
A person who does not have experience or the appropriate distance will see what the problem is only by picking up the Osterwalder business model. Therefore, the model is easily applicable without knowing business techniques. It is useful both when you are developing a strategy and marketing audit already existing business, and as part of working on the concept startup.
The Osterwalder model and the traditional business plan
The Osterwalder model could be part of classes not only in business schools, but also in basic entrepreneurship education. The downside of traditional business plans is that they are not adapted to the possibilities of people who are visual learners and prefer to express themselves in writing at best in slogans. When they pick up the completed Osterwalder business model, they see "in black and white" what the problem is (eg at first glance you can see that there is much more data in one place than in another). Meanwhile, traditional business plans require literary skills.
The lack of a transparent form often prevents not only the originators, but also potential investors from getting through it. As a result, they may discourage entrepreneurship. For now, one has to accept the fact that many programs or scholarships are based on such long applications, which consist of many sections and detailed questions. For personal use, however, it is worth using the Osterwalder business model.
How to implement the Osterwalder business model?
Osterwalder's business model seems extremely complicated at first, and its implementation - difficult. Meanwhile, its beauty lies precisely in its flexibility and multiple possible ways of applying it. The author himself preferably uses a large sheet of paper and sticky notes, although the model can also be presented on a computer screen or in an application.
The Osterwalder model can be part of a wide-ranging effort such as the general one marketing audit or holistic marketing strategy determining how the company will operate over the years. However, it can be used for brainstorming when the goal is, for example, to implement a new product or plan an advertising campaign. Some people use it to plan even smaller tasks, such as a content strategy. They work on it alone or in a group. The possibilities are virtually endless. The model can be modified and adapted to your needs, obtaining a cheap, readily available and effective tool for your business.