If the immediately preceding component of the Business Model Canvas is the Key Resources, which provide the most important inputs to bring your business to life, the Key Activities include the actions that are imperative for a business to work.
Basically, these are the essential tasks that the company must carry out in order to achieve its business purpose, in other words, to meet the Value Proposition, achieve its Customer Segments, sustain a Customer Relationship, and finally create Revenue Streams.
Key Activities vary according to the organization’s Business Model. A product-oriented company, for example, includes research among main activities. A company whose income is based on third-party contracts must prioritize the management of channels.
But how to define the Key Activities of your Business Model Canvas in a functional and successful way?
Categories of Key Activities
- Production: covers all actions related to product development, manufacturing and delivery. It usually involves significant quantities of a product. This is the preponderant activity in the Business Models focused on manufacturing.
- Problem Solving: it is the core activity of organizations seeking unique solutions to specific problems. Hospitals, consultancies and most service providers are good examples. These are enterprises that involve a lot of knowledge management, as well as a focus on continuous learning and training.
- Platform / network: Networks, combination platforms, software and brands can function as platforms. The company develops the platform and works continuously to keep it running, through the platform management and promotion, in addition to providing services accordingly.
The focus of the Key Activities block is, in the end, to bridge the Value Propositions with the needs of the Customer Segments.
Note some of the typical key activities practiced by most organizations:
Research and Development
Collaborates with all other areas the company, from production to sales, through marketing. Among its typical functions are:
- New product research: Before a product enters the production line, it goes through the research and development department, which will evaluate design, costs and production time.
- New product development: the first phase of research leads to the development of the new product, according to the results achieved in the initial evaluation.
- Updates of existing products: In addition to new products, it is also important to take a look at existing products and how they are aligned with the needs of the market. New demands from the public or changes in the industrial scope may necessitate updating current products. In addition, faults may also appear that need to be resolved.
- Quality checks: The R & D department is also responsible for auditing and quality checking to make sure the product meets the standards set by the company.
- Innovation: Finally, the department is also responsible for observing and understanding innovations and trends in the marketplace, to ensure that the company and the products comply with the scenarios.
It is one of the most comprehensive areas and therefore involves a number of typical activities that may become Key Activities. Such as:
- Product selection and design: to start, you need to choose a product to be marketed, as well as its design. This combination is part of the company’s Value Proposition and may be responsible for the success or failure of the venture.
- Production process selection: Once the product has been decided, it is necessary to choose the production process that the organization will use, including suitable technology, machinery and systems.
- Correct production capacity: the organization needs to be aware of the expected demand for the product in order to determine the production capacity accordingly.
Both shortage and surplus of the product can cause problems. Break-even analysis is the most popular tool among production managers to predict capacity.
- Production planning: the goal here is to create a healthy, sustainable and economical flow. Includes a schedule, with specific calendar of activities, within pre-established hours.
- Production control: it is the responsibility to monitor and control all production processes, correcting eventual deviations to ensure planned production.
- Quality and cost control: involves continually improving the product while trying to reduce costs, to achieve a competitive price in the market.
- Inventory control: the inventory control is critical in a production-driven business. The focus is to avoid both overstocking, an excess of materials that will eventually be wasted, as well as understocking, which can delay production and result in late deliveries.
- Machine maintenance and replacement: it includes everything that concerns maintaining equipment and machinery running in perfect conditions, so that there are no interruptions in the production chain.
It is the department responsible for growth and value propositions of the company. Among its functions, which can become Key Activities, are:
- Strategy: includes the design and implementation of marketing strategies based on the goals and missions of the organization.
- Market research: aims to be fully aware of the market as well as strengths and weaknesses of the product, observing target audiences and potential competitors.
- Product development: here marketing works alongside the development team. In this case, there is the identification of gaps in the market that can be fulfilled with the creation of a new product that meets this need.
- Communications: encompasses all communication about the product on the market, including press releases, advertisements, e-mails etc.
- Sales support: this is when marketing works closely with the sales team, providing customer leads and promotional materials.
- Events: involves the organization and execution of events, such as seminars, product launches, exhibitions, among others, to which key and / or potential customers are invited.
Sales and Customer Service
Sales and service play a key role in the customer experience. They are the main responsible for customer loyalty, who will become a defender and divulger of your brand.
In addition to being the “front” team of the company, they are also the ones who respond to customer complaints and have the power and tools to circumvent the situation and seek client satisfaction.
Also, they can perform some administrative tasks such as registering and controlling client accounts, including new and old ones.
In order to establish the Key Activities of your business, it is important that you take a look at the related components, being able to point out which activities are fundamental to deliver value propositions, to maintain a good relationship with the customer, to take advantage of the distribution and to generate revenue streams.
And, of course, this is a block that needs to be constantly revised, because as the business evolves, there may be a need to include other actions among Key Activities.