Key activities and resources
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The key activities and key resources sections of the business model canvas are described. Key activities are the important actions a company must take to operate successfully and can include production, problem-solving, and platform/network development. Key resources are the most important assets required and can be physical, human, financial, or intangible. Examples of key activities and resources for different companies like Gillette, AirBnB, and Kelly's Lemonade Stand are provided. Case studies on Dyson and Ikea highlight how their key activities and resources allow them to differentiate and reduce costs. The document concludes with differentiating resources and activities into core competencies and testing the feasibility of activities and access to resources.
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Key activities and resources
- 1. Key Activities and Key Resources
- 2. The business model canvas
- 5. Key activities • These are the most important things that a company must do to make its idea work • Key activities are the important actions a company must take to operate successfully • They should be linked to your value proposition, channels and customer segments • They will differ depending on your business − For a software developer the key activities would include software development − For a manufacturer one of the key activities would be supply chain management
- 6. Key activities • Can be divided up into 3 areas: − Production −Designing, making and delivering a product − Problem solving −Coming up with new solutions to individual customer problems −The business models will also involve continuous training −E.g. consultancies, web designers, graphic designers − Platform / network −This is for business models that are dominated by a platform or network − E.g. Ebay, Amazon, AirBnb, Dating websites (Match) −The activity is focused on continually maintaining and developing the platform − Other aspects around this sort of model include marketing and client relationship management
- 7. Examples • Gillette − Key activities −Marketing −Research and development −Logistics Please note manufacturing is not a key activity as they do not manufacture their own razors – this is a key partnership
- 8. Examples • AirBnB − Key Activities −Platform maintenance and development −User research −Local market place development – marketing
- 9. Examples • Kelly's Lemonade Stand − Key activities −Making lemonade −Marketing −Selling
- 10. Case study - Dyson • James Dyson developed a bagless vacuum cleaner which has rejected by other companies because it would remove their recurring revenue from selling bags • Dyson’s strength was the patent portfolio he developed and rigorously protected • This meant that the product portfolio could grow by utilising these patents and creating an expanded product range – such as hand dryers and fans
- 11. Case study - Dyson Research and development Design and manufacturing Intellectual property and patents Premium consumer appliances Research and development costs Premium price
- 12. Case study - Dyson • Invest heavily in key activities such as R&D. − The company invests approx. 20% of its earnings in R&D • Invest heavily in key resources such as IP − Dyson spends millions of pounds on achieving and protecting patents for all of its product e.g. £65m on the hair dryer alone. • Differentiate with best in class products and services − Dyson utilises its key resource of IP to create best in class products • Sell at a premium price − Because its best in class due to its patents it can sell at a premium price
- 13. Key resources • What key resources do you have or require? • These are the most important assets required to make the business work. − Physical − For example, manufacturing facilities, vehicles, buildings, specialist equipment − Human − Crucial in knowledge led (consultancy) and creative industries − Financial − Start up costs − Financial resources − Intangible − Network of contacts − Customer loyalty − Brand
- 14. Examples • Gillette − Key resources −Brand −Patents
- 15. Examples • AirBnB − Key Resources −Community of users and suppliers −Brand −Platform
- 16. Examples • Kelly's Lemonade Stand − Key resources −Ingredients −Sales people −Sales stand −Marketing −Equipment to make the lemonade
- 17. Case Study - Ikea • Ikea was founded on offering well designed furniture at a price so low that as many people as possible can afford them • It introduced the flat pack system to reduce transportation, assembly and storage costs • This meant that it was able to scale aggressively – locating wherever it had willing customers
- 18. Case Study - Ikea Flatpacking / modular manufacturing Ikea stores and stock Affordable modern furniture Reduced operating costs – storage, manufacture, assembly, logistics DIY customer transport and assembly Ikea stores Mass market
- 19. Case Study - Ikea • The key activities of modular design and manufacturing allow for price differentiation and product identification and differentiation • Ikea’s key resources – its stores – can benefit from lower operational costs because of its key activities – lower storage costs, wider and open inventories as stores can act as warehouses • Ikea benefits from further cost reductions by partnering with customers to transport and assemble the furniture − The average cost of transporting a sofa is £500 depending on distance and size − The average cost of transporting a truckload of Ikea couches can be as low as £20.
- 20. What are your key resources?
- 21. • Translating resources and activities to competences − Competences develop over time within an organisation − Some are so difficult to imitate that they become a competitive advantage. − These are known as “core competences” − It is the identification of these that is important within the internal analysis.
- 22. Same as competitors’ or easy to imitate Better than competitors’ and difficult to imitate Resources Competences Threshold Resources Threshold Competences Unique Resources Core Competences
- 23. Core Competencies and Unique Resources • Which of your activities (competencies) are core? • Which of your resources are unique
- 24. Can you do it? • Testing feasibility – can you do it? − Can you do all of the key activities? −If not how will you plug the gaps? − Can you get all of the key resources? −If not how will you get them?
- 25. Any questions?