In a Business Model Canvas, the building block associated with Key Resources describes the resources necessary to carry out business activities. Key resources describe any resource the organization requires for its business model to work
- Understanding key resources in the Business Model Canvas
- Types of key resources
- How to determine key resources
- Key takeaways:
- Alternatives to the Business Model Canvas
- FourWeekMBA Business Toolbox
Understanding key resources in the Business Model Canvas
These resources allow the organization to create a value proposition for consumers, release products to the market, maintain customer segment relationships, and earn revenue.
Before developing its key resources, the business must consider these other blocks first. In other words, can the available resources meet key operational needs? If there aren’t the means to provide value, then no value exists.
Key resources may be tangible or intangible and represent assets that differ from company to company. In most cases, however, key resources will be defined by materials, equipment, and people. The business may own these resources, lease them out, or acquire them by other means.
Types of key resources
Broadly speaking, key resources can be categorized into four types:
- Physical – or tangible assets such as equipment, manufacturing facilities, distribution networks, inventory, and other buildings. Chip manufacturer Intel relies on semiconductor plants as a key resource.
- Intellectual – or intangible assets such as intellectual property, patents, and partnerships. Knowledge about customers is also a key intellectual resource. While these resources take time and money to develop, they are a major driver of innovation and growth. For example, the brand equity of Microsoft and Adobe has been crafted by years of research and development in software.
- Human – employee-related resources are utilized by organizations in the service, software, finance, science, and technology industries. These resources are important to any organization where creativity and a diverse knowledge pool drives growth. Pharmaceutical giant Novartis is dependent on a team of highly qualified scientists and sales representatives to sell its products to doctors.
- Financial – this includes cash, credit, and stock options for publicly listed companies. While all organizations rely on financial resources to some degree, they are particularly important in the banking and insurance industries. For example, an insurance company with insufficient capital to pay out insurance claims is unlikely to be viable.
How to determine key resources
Businesses requiring assistance with identifying key resources must consider the following questions:
- What key resources does the value proposition require? For example, a company selling sustainable and reliable electric vehicles must have access to the necessary raw materials, patents, and intellectual property concerning battery technology.
- What key activities does the value proposition require? Some businesses choose to work backward from the key activities of their business model. This can be achieved by evaluating the actions of other companies in the same industry.
- What key resources do the marketing and distribution channels require?
- How do key resources support existing revenue streams?
- In a Business Model Canvas, the building block associated with Key Resources describes the resources necessary to carry out business activities. The business may own these resources, lease them out, or acquire them by other means.
- Key resources are broadly categorized into four types: physical, intellectual, human, and financial. Resources may be tangible or intangible.
- Key resources can be determined by the business evaluating its value proposition. Some businesses also choose to work backward and determine the activities that will support the value proposition. This can be done by analyzing the actions of companies in the same industry.
Alternatives to the Business Model Canvas
This framework has been thought for any type of business model, be it digital or not. It’s a framework to start mind mapping the key components of your business or how it might look as it grows. Here, as usual, what matters is not the framework itself (let’s prevent to fall trap of the Maslow’s Hammer), what matters is to have a framework that enables you to hold the key components of your business in your mind, and execute fast to prevent running the business on too many untested assumptions, especially about what customers really want. Any framework that helps us test fast, it’s welcomed in our business strategy.
This framework is well suited for all these cases where technology plays a key role in enhancing the value proposition for the users and customers. In short, when the company you’re building, analyzing, or looking at is a tech or platform business model, the template below is perfect for the job.
This framework is well suited to analyze and understand blockchain-based business models. Here, the underlying blockchain protocol, and the token economics behind it play a key role in aligning incentives and also in creating disincentives for the community of developers, individual contributors, entrepreneurs, and investors that enable the whole business model. The blockchain-based model is similar to a platform-based business model, but with an important twist, decentralization should be the key element enabling both decision-making and how incentives are distributed across the network.
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