Key Activities and Partners3:29 with Pasan Premaratne
Our business model has a certain set of tasks that we must carry out and other organizations that we must work with to ensure our customers are happy. In this video, let's take a look at the role Key Activities and Key Partners play in our business model.
[Pasan Premaratne] Aside from key resources, we have 2 other sections that look at the entirety of our business model 0:00 and that's key activities and key partners 0:06 where key resources are all the assets we needed for our business model. 0:09 Key activities are all the important activities we must undertake as a business to ensure success. 0:14 Like key resources, this is dependent on all other areas of the business model. 0:20 So, again, we walk through each section and determine the key activity relevant. 0:25 To use our previous example, if our company builds a web app, then software development is a key activity. 0:29 Key activities are usually grouped under production, problem solving, or platform activities. 0:36 Companies that manufacture and produce hardware or physical products, usually have production as its key activity. 0:42 Consultants, hospitals, and some types of service organizations undertake problem solving activities. 0:49 Networks, brands, and software are the kinds of products or services that fall under a platform category. 0:57 Once you highlight your key activity, you can start to flash out the little details. 1:04 Link each key activity to the resources required. 1:09 Determine what resources you need to dedicate towards making these key activities a reality. 1:12 Now, when you run a business, you won't be doing everything yourself. 1:19 You can try but that's not a good idea--There are other companies out there that can do some of the tasks better than you 1:22 and that's what we're going to focus on in our next section, Key partners. 1:29 A key partners are the network of suppliers and partners that make your business model a reality. 1:33 There are many reasons to work with partners. They reduce risks and lower the cost of carrying out a certain activity 1:40 but it also means we're dependent on them for certain parts of our model. 1:47 When exploring the business model, we should take a look at each activity and decide whether we can serve our customer 1:51 segments better by undertaking the activity ourselves or whether it makes more sense to work with a partner. 1:58 These are important questions to consider. Are there any key suppliers that our business model depends on? 2:04 What resources that are key to our business model is acquired from a partner 2:11 and what key activities are undertaken by a partner. 2:16 Continuing with our web app example, I'm not going to buy server racks and host this app myself. 2:21 It would make much more sense to just pay Amazon to manage the servers for me. 2:27 In this way, I can undertake a key activity hosting my app at a much lower cost than if I do it myself. 2:32 But, that also means I'm dependent on Amazon and have to be worried of downtime and issues on their end. 2:39 Working with partners reduces the burden of managing that aspect of your business 2:45 but it introduces risks and factors outside your control. 2:50 If you're a hardware company that buys your raw materials from suppliers, you open up yourself to the risk of price changes. 2:53 But, this far outweighs the cost of harvesting the wrong materials yourself. 3:00 When going through your list of activities, consider which activities are better served by partners. 3:05 You need one to undertake all the crucial activities that define your product or service yourself 3:11 where you can easily form out some of your other activities to partners to lower costs and deliver a better and user experience. 3:17 But, at the same time, carefully consider the risks that opens you up to. 3:25
You need to sign up for Treehouse in order to download course files.Sign up