27.07.2017

Osterwalder's model in practice, or the success of Apple, LEGO and Skype

Osterwalder's model makes it possible to present the strategy and main goals of an organization in a simple and clear way for everyone. It consists of nine fundamental elements denoting individual business areas which are: Customer Segments (SK), Value Proposition (PW), Channels (K), Customer Relationships (RzK), Revenue Streams (P$), Key Resources (KZ), Key Activities (KD), Key Partners (KP), Cost Structure (K$).

The above areas can be included on a single sheet of paper, divided into corresponding boxes. This form of presentation influences the team to work more efficiently and focus on the project approach in building the business model.

Many companies owe their success to the correct drafting and subsequent use of the above method in practice. These include Apple, LEGO and Skype, among others. To better understand the functions of this model, let's take a closer look at specific examples.

Apple's strategy using the Osterwalder model - the birth of the Cupertino giant 

No one these days needs to be explained what Apple does for a living. But what factor has given it such a strong and even dominant position in the market? The answer is simple and is: a well-developed business model.

The corporation set as its main goal (PW) to provide its customers (SK - mass market) with an excellent music experience. This required the company to create the largest online music library with the help of record companies (KP). In addition, the company had to entice potential customers by designing unique equipment and developing an effective marketing strategy (KD). The proposed services could be delivered to customers through retail stores, official Apple showrooms, the website and the iTunes Store (K). The resources the company used include people, customer and partner contracts, and software (KZ). The company's main expenses are salaries for employees, production costs, and marketing and sales fees (K$). Apple generates huge profits primarily from hardware sales (P$). All these activities result in good relationships with fascinated and loyal customers (RzK).

LEGO Factory - special order sets

Another success described on Osterwalder's model board is an initiative by Lego.

In 2005, the LEGO Factory (current name: Lego Design byME) was created, allowing users to design and order sets themselves, which then went into the offerings available to other customers (PW). In this way, consumers inserted themselves into LEGO's customer (SK) and key partner (KP) segments, while creating a community with a strong interest in the company's development (RzK). The company needed to create an online platform through which users could design their sets and place orders. Current staff activities include maintaining the website (KD and K). The former LEGO Factory uses resources already formed with the mass market in mind (SZ). Costs created by the Lego Design byME have been built into LEGO's core business (K$), and relatively small revenues come from selling a large number of unique sets to a niche market (P$).

 

Skype, the instant messaging revolution

The last business model presented describes Skype's strategy. Skype is an application that allows you to make free Internet calls around the world and offers attractive prices for calls to landline and mobile numbers (PW).

Internet users from all over the world (SK), thanks to the application for computers and smartphones (K), are eager to take advantage of both the free services offered by Skype and the favorable phone call prices. The app is very popular around the world (RzK). The company's programmers (KZ) are constantly working to develop the software and improve the application (KD). Contributing to Skype's success on a large scale are the operators handling outbound calls from the application (KP). Although some 90% users use the messenger's free services, revenue is generated by paid subscriptions (P$), and the main cost is for ongoing software development (K$).

 

Plan your strategy well - Osterwalder's model may prove useful

Properly defining goals and activities is crucial to the success of any business. Without this, many of today's well-known companies would not survive in today's ever-changing market. Therefore, take care of your company today! Clarify your own plans and values, and then present them to your employees in a way that is clear to them. Use the Osterwalder model and see for yourself its effectiveness!

Natalia Szymanska

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