Key Activities and Your Business Model

— August 22, 2019

Key Activities - Business Model Canvas

According to Strategyzer, when it comes to the Business Model Canvas, key activities are any activities that your business is engaged in for the primary purpose of making a profit. Business activities include operations, marketing, production, problem-solving, and administration.

Your key activities will change depending upon the type of business you operate. If you are a web developer, User Interface (UI) design and coding will be key activities. On the other hand, if you are a business coach, problem-solving and customer service are key activities.

While your means of production, problem-solving, and platforms or networks are important considerations when defining your key activities, I take a different approach when mentoring clients about the role of the key activities block.

As with all the blocks associated with the business model canvas, it is about looking for ways to find your uncontested blue ocean to do business in by evaluating your business model from a cost, value proposition, and customer perspective. Therefore, I believe the ultimate goal when defining your key activities is to help you discover what activities you need to address in order to differentiate your product or service from your competition, so that you can effectively deliver your Value Proposition.

The process I advocate when it comes to assessing the key activities of your business is to look at the related business model canvas blocks. While any of the blocks are fair game when looking for key activities, I believe there are two blocks that require your special attention. Since key activities are primarily a bridge between your value proposition and your customer segment, you will want to look long and hard at your channels and customer relationships when coming up with your key activities.

For example, if we look at Amazon’s business model, a key activity that makes them different from brick and mortar retailers like Walmart is related to the evaluation phase of the channels block. By collecting and displaying product review information, Amazon assists the buyer in making a decision among similar products. Since it is not possible to read product reviews at Walmart, collecting and displaying review data is a key activity that helps differentiate Amazon from many of its competitors.

Another example is when it comes to delivery, two-day, next-day Prime delivery and even drone deliveries are shortening the time between purchasing and receiving the product in your hands, making the delivery phase of its channels a key activity to differentiate Amazon from other online e-commerce sites.

The 5 Channel Phases

When it comes to the five phases that make up the channel block of the business model canvas, here are a few sample questions you will want to address when developing the key activities block.

Awareness – How can you create awareness that you have something to sell? Will a key activity involve being accepted as a speaker at your industry’s annual trade show?

Evaluate – How can you make it possible for a prospect to evaluate your offering before paying? Will a key activity be implementing a 30-day try before you pay option?

Purchase – How can you change the way a customer makes a purchase? Will a key activity be to use cameras and artificial intelligence (AI) to eliminate the need for cashiers?

Deliver – How can you make the way you deliver your product or service unique? Will a key activity be offering free pick-up and delivery services, in comparison to your competitors requiring customers to come to their establishments?

Customer Support – How can you change the way a customer is treated after the sale is completed? Will a key activity be to offer native-language instructions like Clorox, or to offer an incentive for employees to quit to test their loyalty like Zappos?

The Customer Relationships

Another area where key activities can help your business find its blue ocean is by changing the customer relationship your business has with its customers.

While most stores that sell computer systems, like Best Buy, rely on knowledgeable salespeople which can vary and be expensive, Dell chose a different path with the relationship it has with its customers. Rather than rely on a salesperson’s knowledge and a customer’s access based on store hour limitations, Dell uses an online application instead. By assessing how the customer will use their computer, Dell helps the consumer understand all of their configuration options as they build a custom PC. They even provide a running total, and list special deals. so the customer can do a series of “what-ifs” to build a computer that will meet their unique needs within their budgets.

Will a key activity be to provide an automated service like Dell, a dedicated personal assistant for the life of the relationship like Wells Fargo’s Private Client Services, or allow customers to be part of your offering with a co-creation option like YouTube?

In conclusion, while examining all of the nine core blocks of your business model canvas may help you define your key activities, there are three primary questions you must ask yourself:

  • What key activities do your value propositions require?
  • What key activities do your channels require?
  • What key activities do your customer relationships require?

Do you have a clear picture of all the key activities you have to perform to produce your output?

 

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Author: Steven Imke

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