Key Activities and Key Partners
Key activities are the most critical tasks that a company must complete to operate successfully. They relate to and impact the overall Business Model Canvas by offering and creating a value proposition, customer relationships, revenues, and markets. According to Fisher et al. (2020), key activities differ based on the business model. A business model identifies the services or products the business intends to sell, the target market, and expected expenses. The main key activities in businesses include production, problem-solving, and platform. Firstly, production includes the activities related to manufacturing, designing, and delivering a product in considerable quantities and with the best quality. Secondly, problem-solving includes activities related to identifying new solutions to problems. In addition, problem-solving activities may include continuous training and knowledge management. Problem-solving activities are dominant in businesses that offer services to customers. For example, doctors solve healthcare problems by diagnosing patients and prescribing medication.
Thirdly, the platform includes the software, networks, and brands in a business. A business can develop its platform and continuously work to sustain, manage and promote it. According to Spajic (2021), key activities are directly tied to value propositions and value chains because they focus on solving customer problems. Therefore, business operations cannot be effective if the key activities are not completed effectively. Key activities also create revenue streams based on what the business does. Businesses can also increase revenue by focusing on activities such as making new investments, cutting costs, focusing on differentiation, and standardizing operations. For example, FedEx uses automation to cut operating costs. The company has 150 fully automated facilities that use warehouse robotic technology.
Key partners are the external suppliers or companies needed to perform key activities and deliver value to customers. They relate to and impact the overall Business Model Canvas by supporting key activities to generate revenues and reach new markets. The main categories of key partners include coopetition, strategic alliances between non-competing businesses, buyer-supplier relationships, and joint ventures. Notably, strategic alliances are agreements between two businesses or organizations to undertake a project that yields mutual benefit while each maintains its independence. Strategic alliances can be equity or non-equity alliances. Non-equity alliances include creating an agreement to share resources without sharing equity or separating an entity. Conversely, strategic equity alliances occur when one company buys equity in another business or every business buys equity in each another. Strategic alliances facilitate production expansion, sharing of expertise and resources, innovation, and market penetration.
Secondly, coopetition includes cooperation between competing businesses, suppliers, and customers. According to Näsholm et al. (2018), coopetition is founded on the idea that businesses can achieve mutual benefits due to competition-driving forces while concurrently gaining access to resources through cooperation. Thirdly, buyer-supplier relationships include establishing strategic alliances and collaborative or transactional relationships with suppliers. Transactional relationships are based on needs and reciprocity, where both parties expect to get something when they invest. For example, suppliers expect to get paid for their supplies, and businesses expect high-quality products and services from suppliers. A collaborative relationship includes relying on the participation of the business and suppliers to share resources such as people, knowledge, and finances when the supplier and business have similar goals. For example, learning institutions establish a collaborative relationship with learners and parents because the performance of the institutions is determined by the learners’ performance and parents must pay tuition fees that are used to sustain the institution’s operations.
Lastly, according to Channon & Sammut-Bonnici (2015), joint ventures are business agreements where both parties agree to share resources to complete specific tasks. The main types of joint ventures include project, functional, vertical, and horizontal joint ventures. Project joint ventures are limited to the completion of a specific project. On the other hand, functional joint ventures include coming together to share expertise by creating a symbiotic environment for every party in the venture. Third, vertical joint ventures include collaboration between parties in the same supply chain when one party produces a specific product for which it requires specialized raw material. Finally, horizontal joint ventures include collaboration between two businesses producing the same services or goods. For example local logistics companies collaborate with global logistics companies to deliver goods to customers beyond their reach.
Channon, D. F., & Sammut-Bonnici, T. (2015). Joint ventures. Wiley Encyclopedia of Management, 1-3. https://doi.org/10.1002/9781118785317.weom120048.
Fisher, G., Wisneski, J. E., & Bakker, R. M. (2020). Business model canvas. Strategy in 3D, 174-184. https://doi.org/10.1093/oso/9780190081478.003.0019.
Näsholm, M. H., Bengtsson, M., & Johansson, M. (2018). Coopetition for SMEs. The Routledge Companion to Coopetition Strategies, 390-397. https://doi.org/10.4324/9781315185644-37.
Spajic, A. (2021). The Business Model Canvas as a Tool of Marketing Mix. GRIN Verlag.
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For this assignment you will discuss the Key Activities and Key Partners elements of the BMC.
Include your thoughts of how these elements relate to and impact the overall Business Model Canvas. Include at least one cited reference and a real-world example to support your analysis.
- Two pages in length
- APA format, including an in-text citation for referenced