1 00:00:00,730 --> 00:00:06,430 [Pasan Premaratne] Aside from key resources, we have 2 other sections that look at the entirety of our business model 2 00:00:06,430 --> 00:00:09,110 and that's key activities and key partners 3 00:00:09,420 --> 00:00:14,020 where key resources are all the assets we needed for our business model. 4 00:00:14,020 --> 00:00:20,160 Key activities are all the important activities we must undertake as a business to ensure success. 5 00:00:20,160 --> 00:00:25,400 Like key resources, this is dependent on all other areas of the business model. 6 00:00:25,400 --> 00:00:29,820 So, again, we walk through each section and determine the key activity relevant. 7 00:00:29,820 --> 00:00:36,520 To use our previous example, if our company builds a web app, then software development is a key activity. 8 00:00:36,520 --> 00:00:42,650 Key activities are usually grouped under production, problem solving, or platform activities. 9 00:00:42,650 --> 00:00:49,900 Companies that manufacture and produce hardware or physical products, usually have production as its key activity. 10 00:00:49,900 --> 00:00:57,020 Consultants, hospitals, and some types of service organizations undertake problem solving activities. 11 00:00:57,020 --> 00:01:04,390 Networks, brands, and software are the kinds of products or services that fall under a platform category. 12 00:01:04,390 --> 00:01:09,580 Once you highlight your key activity, you can start to flash out the little details. 13 00:01:09,580 --> 00:01:12,530 Link each key activity to the resources required. 14 00:01:12,530 --> 00:01:17,830 Determine what resources you need to dedicate towards making these key activities a reality. 15 00:01:19,070 --> 00:01:22,820 Now, when you run a business, you won't be doing everything yourself. 16 00:01:22,820 --> 00:01:29,620 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 17 00:01:29,620 --> 00:01:33,470 and that's what we're going to focus on in our next section, Key partners. 18 00:01:33,470 --> 00:01:40,130 A key partners are the network of suppliers and partners that make your business model a reality. 19 00:01:40,130 --> 00:01:47,450 There are many reasons to work with partners. They reduce risks and lower the cost of carrying out a certain activity 20 00:01:47,450 --> 00:01:51,230 but it also means we're dependent on them for certain parts of our model. 21 00:01:51,230 --> 00:01:58,250 When exploring the business model, we should take a look at each activity and decide whether we can serve our customer 22 00:01:58,250 --> 00:02:04,490 segments better by undertaking the activity ourselves or whether it makes more sense to work with a partner. 23 00:02:04,490 --> 00:02:11,460 These are important questions to consider. Are there any key suppliers that our business model depends on? 24 00:02:11,460 --> 00:02:16,290 What resources that are key to our business model is acquired from a partner 25 00:02:16,290 --> 00:02:20,590 and what key activities are undertaken by a partner. 26 00:02:21,540 --> 00:02:27,020 Continuing with our web app example, I'm not going to buy server racks and host this app myself. 27 00:02:27,020 --> 00:02:32,180 It would make much more sense to just pay Amazon to manage the servers for me. 28 00:02:32,180 --> 00:02:39,380 In this way, I can undertake a key activity hosting my app at a much lower cost than if I do it myself. 29 00:02:39,380 --> 00:02:45,880 But, that also means I'm dependent on Amazon and have to be worried of downtime and issues on their end. 30 00:02:45,880 --> 00:02:50,200 Working with partners reduces the burden of managing that aspect of your business 31 00:02:50,200 --> 00:02:53,650 but it introduces risks and factors outside your control. 32 00:02:53,650 --> 00:03:00,960 If you're a hardware company that buys your raw materials from suppliers, you open up yourself to the risk of price changes. 33 00:03:00,960 --> 00:03:05,730 But, this far outweighs the cost of harvesting the wrong materials yourself. 34 00:03:05,730 --> 00:03:11,780 When going through your list of activities, consider which activities are better served by partners. 35 00:03:11,780 --> 00:03:17,790 You need one to undertake all the crucial activities that define your product or service yourself 36 00:03:17,790 --> 00:03:25,060 where you can easily form out some of your other activities to partners to lower costs and deliver a better and user experience. 37 00:03:25,060 --> 00:03:29,090 But, at the same time, carefully consider the risks that opens you up to.