After determining your organization’s value propositions and customer segments, channels, and customer relationships, I think it makes the most sense to turn to the organization’s key activities. Key activities are those actions that must be undertaken in order to fulfill the promises you’ve made with your value propositions. They are the activities necessary to deliver your business’ sustainable competitive advantage. Before you write down any activity, you should think to yourself “does this activity directly support my business’ ability to deliver on my value propositions?” If the answer to this question is a resounding “YES!” then you need to include it.
In our example, key activities for our cleat organization might include:
- Maintaining and improving website
- Continuous customer service training
- Responding to customer requests and complaints about sizing
- Prompt returns and exchanges
- Continuous business development and creating pop-up locations at rec centers and malls
As you can see, each of the key activities listed is directly related to the value propositions listed above. Your key activities are those that allow your business to thrive. Although there are many other activities that our example business would need to do in order to exist (ex: design and shoe development, maintain supply chain, create new advertisements, create annual financial statements, hire new managers, etc.) those activities, while important for general business function, do not support the value propositions and thus can be left out of this section. It’s impossible to list every single action that a business must undertake to operate effectively, the “key activities” section of the Business Model Canvas is not supposed to be an exhaustive list of all of the actions, just those that directly support the value propositions.
After determining the Key Activities needed to support your value propositions, you should look at the Key Resources needed to carry out your Key Activities. As you can see, each element of the business model canvas builds on the previous element.
Key resources can be financial, physical, human or intellectual. They must be accessible by the organization and are used to ensure that the key activities are carried out. Basically, we want to identify “Resource X,” that will make “Activity Y” possible.
In our example of a cleat company, the resources we need to carry out key activities might be:
- A knowledgeable and creative web designer
- Relationships with rec centers and malls around the country
- Enough free cash flow to handle large numbers of returns and exchanges
- An effective customers service training program
Next, we’ll turn to the Key Partners for our business. As John Donne said, “No man is an island” and this principle holds true for businesses as well. In order to thrive in the marketplace, an organization needs partners; these might include governments, trade unions, clubs, other businesses, individuals, politicians, celebrities and other entities.
You don’t need to know exactly which organizations you’ll rely on as partners. For example, with our cleat company, we may know that we need local athletes as Key Partners, but we might not know which ones will be interested in partnering with us. Thus, it’s okay (at this point) to simply put “local athletes” and look into specific partnerships later. The main point is to ensure that all of your most crucial partners are accounted for. Further, the partners that you select should support your Value Proposition and securing/maintaining your partnerships should be supported by your Key Resources. If a particular partnership is crucial to fulfilling your Value Proposition, you may need to add relationship maintenance to your Key Activities. If you already have an agreement with Key Partners, this agreement could potentially be a Key Resource.
For the oversized cleat organization from our example, we might consider key partners like Rec centers and malls (where we would hope to launch pop-up stores), local athletes like CFL players, community sports teams around Canada and local sporting goods stores.