Key Partners, Activities and Resources

Having covered the ‘Value Proposition’ section of the Business Canvas Model in the last instalment, this time, we’ll cover the sections which identify ‘key’ people and areas. These are:

  • Key Partners: the people who are integral to your business succeeding
  • Key Activities: activities our value proposition requires
  • Key Resources: resources our value proposition require

In order to identify your key partners, you need to ask yourself the following questions in relation to your business: who are your key partners? Who are your suppliers? Which resources are you getting from your partners? And which activity do your partners perform?

Once identified, in order to reduce the risk of a business and heighten operations, creating key partner relationships can be an integral step. A good example could be the building of a good relationship with your customers or local council. By building this brand loyalty and strength with key partners, it is more likely that customers will repeatedly buy from you and that you will be welcomed to the community, giving you a better reputation and increased custom.

When defining key activities, it is important to assess your business in terms of: your distribution channels, customer relationships and revenue streams. The identification of your key activities allows you to see your most important activities in executing your value proposition, which was shown in the last entry as being the value within your product or service which the customer buys. An example of a key activity for The Economist magazine would be creating an efficient supply chain to drive down costs and ensure that deliveries were made on time to meet deadlines and demand.

The questions you need to ask of your business when uncovering your key resources are similar to those for key activities, namely: distribution channels, customer relationships and revenue streams. The resources which you are trying to identify could be anything integral to the business’ value proposition, physical resources (e.g. machinery), intellectual (e.g. patents), human (e.g. workforce) and financial.

But essentially, these resources are the tangible and intangible necessities to create value for the customer. They are needed in order to support the business and would be considered an asset to the company. Amazon, for example, provide value to customers through their huge product range made available through their website which is available from anywhere, therefore saving customers time and money, given their smaller cost centres. The key resource to Amazon would be the company’s IT infrastructure, without that, they have no service to provide.

Identifying these key areas in the business canvas model will help you to define the most important areas to focus on, as without many of these, you have no business, so it is essential to not lose sight of these.

This blog is also available on the Kindle Store and you can follow me on Twitter (@benpfsmith) to find out more or get in touch

Value proposition

The ‘value proposition’ forms one piece of the ‘business model canvas’ puzzle. The canvas itself is a simple way of mapping out your business idea by detailing the operations of your company. It is a much more simple and visual way of laying out your business, something which is traditionally done in a business plan.

The business model canvas covers every area of your business and is a terrific way of identifying missing pieces in your business idea. If I were to go through every section of the model (of which there are 9), my post would be far longer than those I have done in the past. So I have decided to group and break down sections.

Although all aspect of the canvas are key in order to fully form your idea, the value proposition is a major part, and describes why people would buy your product. Simply speaking, it helps you answer the questions:

  • What value does your product deliver to the customer?
  • What is the problem which you are solving for the customer?
  • Which product are you offering to which group of customers?
  • Which customer needs are you satisfying?

The value proposition is based on three categories: need, feature and benefit. The need is what the market needs, the feature identifies which features of your product matches this need, and the benefit section shows the benefits which result from these features.

A great way to find your value proposition is to draw a table with these headings, then simply write how your product fits in. A very important thing to bear in mind during all of this is that benefits sell, features don’t, and so identifying and being able to annunciate these benefits is key.

An example of a value proposition when referring to a buying a new hatchback car would be as follows. The feature of this car is the extra space at the back of the car; the benefits are that this makes it easier to load shopping and to travel with your dog whilst keeping your backseats seats clean.

Unsurprisingly, the best benefits your product can bring save the customer time and money. Once you’ve identified the value proposition, you are one step closer to justifying your added value in pricing terms, something which will be covered in another post.

This is an essential part of any sort of idea development, as it makes it easier to describe why people should buy your product and ultimately how it will sell, so do not forget to think this through.

This blog is also available on the Kindle Store and you can follow me on Twitter with any questions