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Key Resources

Key Resources are the vital assets a business needs to function and succeed. They are crucial for delivering a company’s value propositions, serving its customers, and sustaining its operations. Key resources can be tangible or intangible, and are often unique to the company’s industry and specific business model.

In the context of the Business Model Canvas (BMC), Key Resources are the essential elements that support the execution of a business model. They are necessary for creating and delivering the value proposition, reaching and maintaining relationships with customer segments, and generating revenue streams.

These resources will enable the success of all BMC blocks previously studied. They will allow the company to offer a Value Proposition , create a Relationship with defined Customer Segments , and profit from Revenue Streams and Distribution Channels .

These are the main assets the company requires to deliver the final product to the customer and are generally different from those used by its competitors. They define, therefore, what kind of materials, equipment, and human resources you will need to bring your value proposition to life. Let’s dig deeper into it all, shall we?

Types of Key Resources

Key Resources may be physical, financial, intellectual, or human, and the company may choose to purchase, lease, or acquire them from partners :

• Physical : The tangible inputs and structures that the company needs to create its value proposition are such things as buildings, vehicles, machinery, equipment, points of sale, and distribution networks;
• Intellectual : intangible assets, which include trademarks, patents, copyrights, proprietary knowledge, databases, etc. These resources require a lot of time and work to be developed. But, once completed, they offer substantial value to the organization — just think of some brands’ strengths in the market. In the last twenty years, companies have realized the importance of intellectual resources, as evidenced by increased patents and registrations;
• Human : People are often the most important — and sometimes the most neglected — resources in an organization, especially in businesses that require extensive knowledge, creativity, or human contact, such as in service, science, advertising, or sales;
• Financial : Financial resources or guarantees cover cash, credit lines, and stock plans for employees. Some companies, such as banks, depend more on this type of resource, which is the strongest in the organization.

Key Resources and Value Propositions

The quality and nature of a Business Model’s key resources will determine how the value proposition will be met. In fact, nothing is a key resource until it serves a particular aspect of the model’s value proposition.

Business models generally separate businesses into three types: product-driven, scope-driven, and infrastructure-driven. Take a look:

Product-Driven Businesses

These businesses focus on creating and selling products with unique features and a willing customer segment. The key resources for these businesses are usually intellectual and human, since organizations need to have intellectual property and expertise in their specific niche.

Scope-Driven Businesses

They are dedicated to offering a value proposition to a particular customer segment. An example is a company that specializes in being the  IT  provider for all law firms within an area . 

Among the key resources required for such a venture are well-developed intelligence on the target customer segment, an established set of processes, and, in some cases, specialized infrastructure.

Infrastructure-Driven Businesses

Those that achieve their profit through the use of their infrastructure. The telecommunications industry, for example, will need to make a heavy initial investment in infrastructure, after which it will reap the rewards for years with only small investments to keep its systems up to date. The retail business model relies heavily on its established infrastructure to sustain long-term profitability.

Many entrepreneurs cannot think strategically when assessing their business’s key resources. Rather, they create generic features that would be commonplace in any company in the industry in which they operate.

Instead, you must assess each of the key resources available and see which are essential to the success of your business. For example, talented human resources are a necessity for most companies. But should they be the foundation on which you base your entire business?

In addition, Key Resources must be directly proportional to the number and type of key activities your business is involved with. The quality of these resources will affect their profitability and the profitability of the entire organization.

For example, suppose the company doubles sales and grows beyond expectations. You can only deal with that situation if you fully know the key resources involved in consistently increasing demand. This way, you can determine whether your current resources meet the new scenario or if new investments are needed.

The Key Resources  study is vital because it prepares you for the market’s scenarios. Once you recognize which resources are directly linked to your Value Propositions and your Customers, you can move on to the next block of the Business Model to understand your organization’s Key Activities .

Who is Daniel Pereira ?

I love understanding strategy and innovation using the business model canvas tool so much that I decided to share my analysis by creating a website focused on this topic.

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Key Resources In The Business Model Canvas: What To Include?

One of the more important (though at times trickier to define) sections of the business model canvas is the key resources section. Particularly for small and early stage ventures--there can be some confusion about what to include here.

So let's just get right to it.

What are key resources in the business model canvas?

In a nutshell, your key resources are those assets which are absolutely essential for your business model to work.

They describe all the valuable things that will be needed for you to actually deliver on the promise (or value proposition) you're making to your target customers.

For example, if you're selling items online, then a website, hosting and Ecommerce infrastructure are kind of essential resources for that model to be at all feasible!

In contrast, if you're running a B2B service company that does consulting work for other businesses, your key resources might be your team of expert consultants, and perhaps some specialized software or equipment.

Useful prompts for your key resources section

• What do you need in order to bring your value proposition to life?
• What are the necessary inputs for your business model?
• What assets or capabilities do you need to have in order to make your business model work?

Tying your key resources back to the core value proposition your business is making can be a useful way to check off your most important assets. Especially if you are projecting forward to some future value proposition, or considering a venture which doesn't quite exist yet--start by imagining a future where you are delivering on your value proposition perfectly, then picture the assets that would need to be in place to do so effectively.

Common types of key resources

Key resources come in a few common forms, and it's worth taking a moment to consider each of these larger categories when brainstorming your own business' key resources.

These are, according to Strategyzer :

Physical resources

Intellectual property.

• Bonus: Digital

A little more on each below.

Physical resources refer to assets like infrastructure, equipment, real estate, delivery vehicles, inventory and basically any assets that are grounded in the physical world; ie. made up of atoms,

For example, a coffee shop needs a location, brewing equipment, and (of course) coffee beans! Other examples of physical resources might be:

• A retail store needs shelves, registers and products;
• A food delivery like Deliveroo business needs vehicles (in this case bicycles!), uniforms and packaging materials; and
• A manufacturing business likely needs a factory, tools and raw materials.

In an increasingly online business world, intellectual property resources are incredibly valuable. This includes things like any patents, copyrights or other legal protections that you might have on your products or processes. But it also refers to your brand, proprietary software and systems and even data warehouses that you may have collected through business activities.

Human resources

Your human resources are, quite simply, your people power. This could be a team of in-house experts, your contractors, or even just yourself if you're a solopreneur. Understanding the role that human resources and talent will play in your broader business model is a key piece of the canvas; are you dependent on highly skilled talent (e.g. niche software developers?) or are you more dependent on a high volume of low-skilled workers (e.g. Deliveroo delivery drivers).

Financial resources

This could include investments, grants, lines of credit, or even just cash on hand. Other common financial resources are invoices (if you're selling on credit) or accounts receivable (if you're selling products or services before they've been paid for).

Some business models have higher capital demands than others, in which case being clear about the financial resources needed up front (and throughout) are essential--you can have all the other forecasts and projections going in the right direction, but if you run out of cash, everything will end in a hurry.

Digital resources

Not included in the original model, I've added this as a specific consideration for modern online businesses. While there's some overlap with the Intellectual Property resources, I think it's worth making a point of considering your digital resources that will be deployed (and secured) as your business model develops.

Things like:

• SEO and digital real estate: How much of the digital search space do you own? And how much can you realistically win?
• Virality: Do you have assets which are inherently viral, or access to channels which can go viral readily?
• Automation: If manufacturing facilities and systems are a key resources in physical space, thinking through areas of your business' digital knowledge processes that can be automated (and building or developing those systems) can also be considered a key digital resource in your business model.

Filling out the Business Model Canvas

We'll be adding to this series on filling out the Business Model Canvas in due course; in the meanwhile, if you'd like to duplicate an editable template of the business model canvas in Notion, you can do just that with the link above.

Happy business building.

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Key Resources: Business Model Canvas Explained

The Business Model Canvas is a strategic tool that allows businesses to visualize, design, and innovate their business model. One of the crucial components of this canvas is the 'Key Resources' section. This section is dedicated to the most important assets that a company needs to create and deliver its value proposition. These resources can be physical, financial, intellectual, or human.

Key resources are the strategic assets a company needs to operate and deliver its value proposition. They are the main inputs that a company uses to create its product or service, reach its customer segments, and maintain relationships with them. Understanding and identifying these key resources is crucial for any business model.

Types of Key Resources

Key resources can be categorized into four main types: Physical, Intellectual, Human, and Financial. Each of these categories has its own characteristics and implications for the business model.

Physical resources include tangible assets such as buildings, vehicles, machinery, and inventory. Intellectual resources are intangible assets such as patents, copyrights, and proprietary knowledge. Human resources refer to the skills, talents, and expertise of the company's employees. Financial resources include cash, credit, and other financial assets.

Physical Resources

Physical resources are tangible assets that a company uses in its value creation process. These can include buildings, machinery, vehicles, and inventory. For a manufacturing company, the physical resources might include the factory where the products are made, the machinery used in the production process, and the inventory of raw materials and finished products.

Physical resources can be a significant source of competitive advantage for a company. For example, a company with a strategically located factory might be able to deliver its products more quickly and cheaply than its competitors. Similarly, a company with a large inventory might be able to meet customer demand more effectively.

Intellectual Resources

Intellectual resources are intangible assets that a company uses to create value. These can include patents, copyrights, trademarks, proprietary knowledge, and brand reputation. For a technology company, the intellectual resources might include the patents for its technology, the proprietary software it has developed, and the brand reputation it has built over time.

Intellectual resources can be a significant source of competitive advantage for a company. For example, a company with a strong patent portfolio might be able to prevent competitors from copying its technology. Similarly, a company with a strong brand reputation might be able to charge higher prices for its products or services.

Importance of Key Resources

Key resources are crucial for a company's success because they enable the company to create and deliver its value proposition. Without the necessary resources, a company would not be able to produce its product or service, reach its customer segments, or maintain relationships with its customers.

Moreover, key resources can be a source of competitive advantage for a company. A company with unique or superior resources can differentiate itself from its competitors and achieve a competitive edge. For example, a company with a highly skilled workforce might be able to deliver superior quality products or services. Similarly, a company with a strong patent portfolio might be able to prevent competitors from copying its technology.

Role in Value Creation

Key resources play a crucial role in the value creation process . They are the main inputs that a company uses to create its product or service. For example, a manufacturing company uses physical resources such as machinery and raw materials to produce its products. A software company uses intellectual resources such as proprietary software and technical expertise to develop its software.

The quality and efficiency of a company's key resources can significantly impact the quality and value of its product or service. For example, a company with high-quality machinery and skilled workers can produce high-quality products. Similarly, a company with efficient processes and systems can deliver its services more quickly and cost-effectively.

Role in Revenue Growth and Innovation

Key resources also play a crucial role in revenue growth and innovation. A company with strong key resources can leverage them to create new products or services, enter new markets, or improve its existing offerings. This can lead to increased revenue and growth for the company.

For example, a technology company with a strong patent portfolio can use its patents to develop new technologies and products. A company with a skilled R&D team can use its expertise to innovate and create new solutions. Similarly, a company with a strong financial position can invest in research and development, acquisitions, or market expansion to drive growth and innovation.

Identifying Key Resources

Identifying the key resources of a company is a crucial part of the business model canvas. It involves understanding the main inputs that the company uses to create its product or service, reach its customer segments, and maintain relationships with its customers.

This process requires a deep understanding of the company's value proposition, customer segments, channels, customer relationships, and revenue streams. It also requires a thorough analysis of the company's operations, processes, and capabilities.

Understanding the Value Proposition

The first step in identifying the key resources is understanding the company's value proposition . The value proposition is the unique combination of products or services that a company offers to its customers. It describes how the company solves its customers' problems and meets their needs.

The key resources needed to deliver this value proposition are the physical, intellectual, human, and financial assets that the company uses to create and deliver its products or services. For example, a software company's key resources might include its proprietary software, technical expertise, and customer relationships.

Analyzing the Operations and Capabilities

The next step in identifying the key resources is analyzing the company's operations and capabilities. This involves examining the company's processes, systems, and infrastructure to understand how it creates and delivers its value proposition.

This analysis can reveal the key resources that the company uses in its operations. For example, a manufacturing company's key resources might include its production facilities, machinery, and raw materials. A service company's key resources might include its customer service personnel, IT systems, and customer relationships.

Managing Key Resources

Once the key resources have been identified, the next step is to manage them effectively. This involves ensuring that the resources are available when needed, used efficiently, and maintained properly. It also involves investing in the development and improvement of the resources to enhance their value and competitive advantage.

Effective management of key resources can enhance a company's performance and profitability. It can also improve the company's ability to innovate and adapt to changes in the market.

Availability and Efficiency

The availability and efficiency of key resources are crucial for a company's operations. The company needs to ensure that the resources are available when needed and used efficiently. This can involve scheduling and planning activities, optimizing processes and systems, and managing inventory and supply chains.

For example, a manufacturing company needs to ensure that its machinery is available and operating efficiently to produce its products. A service company needs to ensure that its customer service personnel are available and efficient in handling customer inquiries and complaints.

Maintenance and Improvement

The maintenance and improvement of key resources are also crucial for a company's performance and competitiveness. The company needs to maintain its resources in good condition to ensure their reliability and longevity. It also needs to invest in the development and improvement of its resources to enhance their value and competitive advantage.

For example, a technology company needs to maintain its IT systems to ensure their reliability and security. It also needs to invest in the development and improvement of its software and technologies to stay ahead of its competitors.

In conclusion, key resources are a crucial component of the business model canvas. They are the strategic assets that a company uses to create and deliver its value proposition. Understanding and managing these resources effectively can enhance a company's performance, competitiveness, and ability to innovate.

Whether they are physical, intellectual, human, or financial, these resources play a crucial role in the value creation process, revenue growth, and innovation. Therefore, identifying and managing these resources should be a top priority for any business.

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Business Model Canvas: Explained with Examples

Got a new business idea, but don’t know how to put it to work? Want to improve your existing business model? Overwhelmed by writing your business plan? There is a one-page technique that can provide you the solution you are looking for, and that’s the business model canvas.

In this guide, you’ll have the Business Model Canvas explained, along with steps on how to create one. All business model canvas examples in the post can be edited online.

What is a Business Model Canvas

A business model is simply a plan describing how a business intends to make money. It explains who your customer base is and how you deliver value to them and the related details of financing. And the business model canvas lets you define these different components on a single page.   

The Business Model Canvas is a strategic management tool that lets you visualize and assess your business idea or concept. It’s a one-page document containing nine boxes that represent different fundamental elements of a business.  

The business model canvas beats the traditional business plan that spans across several pages, by offering a much easier way to understand the different core elements of a business.

The right side of the canvas focuses on the customer or the market (external factors that are not under your control) while the left side of the canvas focuses on the business (internal factors that are mostly under your control). In the middle, you get the value propositions that represent the exchange of value between your business and your customers.

The business model canvas was originally developed by Alex Osterwalder and Yves Pigneur and introduced in their book ‘ Business Model Generation ’ as a visual framework for planning, developing and testing the business model(s) of an organization.

What Are the Benefits of Using a Business Model Canvas

Why do you need a business model canvas? The answer is simple. The business model canvas offers several benefits for businesses and entrepreneurs. It is a valuable tool and provides a visual and structured approach to designing, analyzing, optimizing, and communicating your business model.

• The business model canvas provides a comprehensive overview of a business model’s essential aspects. The BMC provides a quick outline of the business model and is devoid of unnecessary details compared to the traditional business plan.
• The comprehensive overview also ensures that the team considers all required components of their business model and can identify gaps or areas for improvement.
• The BMC allows the team to have a holistic and shared understanding of the business model while enabling them to align and collaborate effectively.
• The visual nature of the business model canvas makes it easier to refer to and understand by anyone. The business model canvas combines all vital business model elements in a single, easy-to-understand canvas.
• The BMC can be considered a strategic analysis tool as it enables you to examine a business model’s strengths, weaknesses, opportunities, and challenges.
• It’s easier to edit and can be easily shared with employees and stakeholders.
• The BMC is a flexible and adaptable tool that can be updated and revised as the business evolves. Keep your business agile and responsive to market changes and customer needs.
• The business model canvas can be used by large corporations and startups with just a few employees.
• The business model canvas effectively facilitates discussions among team members, investors, partners, customers, and other stakeholders. It clarifies how different aspects of the business are related and ensures a shared understanding of the business model.
• You can use a BMC template to facilitate discussions and guide brainstorming brainstorming sessions to generate insights and ideas to refine the business model and make strategic decisions.
• The BMC is action-oriented, encouraging businesses to identify activities and initiatives to improve their business model to drive business growth.
• A business model canvas provides a structured approach for businesses to explore possibilities and experiment with new ideas. This encourages creativity and innovation, which in turn encourages team members to think outside the box.

As an example, check out the Business Model Canvas for Netflix that we created to give you an idea of how it works.

How to Make a Business Model Canvas

Here’s a step-by-step guide on how to create a business canvas model.

Step 1: Gather your team and the required material Bring a team or a group of people from your company together to collaborate. It is better to bring in a diverse group to cover all aspects.

While you can create a business model canvas with whiteboards, sticky notes, and markers, using an online platform like Creately will ensure that your work can be accessed from anywhere, anytime. Create a workspace in Creately and provide editing/reviewing permission to start.

Step 2: Set the context Clearly define the purpose and the scope of what you want to map out and visualize in the business model canvas. Narrow down the business or idea you want to analyze with the team and its context.

Step 3: Draw the canvas Divide the workspace into nine equal sections to represent the nine building blocks of the business model canvas.

Step 4: Identify the key building blocks Label each section as customer segment, value proposition, channels, customer relationships, revenue streams, key resources, key activities, and cost structure.

Step 5: Fill in the canvas Work with your team to fill in each section of the canvas with relevant information. You can use data, keywords, diagrams, and more to represent ideas and concepts.

Step 6: Analyze and iterate Once your team has filled in the business model canvas, analyze the relationships to identify strengths, weaknesses, opportunities, and challenges. Discuss improvements and make adjustments as necessary.

Step 7: Finalize Finalize and use the model as a visual reference to communicate and align your business model with stakeholders. You can also use the model to make informed and strategic decisions and guide your business.

Use Strategyzer Business Model Canvas to visualize and design company’s business model in a simple, structured format.

What are the Key Building Blocks of the Business Model Canvas?

There are nine building blocks in the business model canvas and they are:

Customer Segments

Customer relationships, revenue streams, key activities, key resources, key partners, cost structure.

• Value Proposition

When filling out a Business Model Canvas, you will brainstorm and conduct research on each of these elements. The data you collect can be placed in each relevant section of the canvas. So have a business model canvas ready when you start the exercise.  

Let’s look into what the 9 components of the BMC are in more detail.

These are the groups of people or companies that you are trying to target and sell your product or service to.

Segmenting your customers based on similarities such as geographical area, gender, age, behaviors, interests, etc. gives you the opportunity to better serve their needs, specifically by customizing the solution you are providing them.

After a thorough analysis of your customer segments, you can determine who you should serve and ignore. Then create customer personas for each of the selected customer segments.

There are different customer segments a business model can target and they are;

• Mass market: A business model that focuses on mass markets doesn’t group its customers into segments. Instead, it focuses on the general population or a large group of people with similar needs. For example, a product like a phone.  
• Niche market: Here the focus is centered on a specific group of people with unique needs and traits. Here the value propositions, distribution channels, and customer relationships should be customized to meet their specific requirements. An example would be buyers of sports shoes.
• Segmented: Based on slightly different needs, there could be different groups within the main customer segment. Accordingly, you can create different value propositions, distribution channels, etc. to meet the different needs of these segments.
• Diversified: A diversified market segment includes customers with very different needs.
• Multi-sided markets: this includes interdependent customer segments. For example, a credit card company caters to both their credit card holders as well as merchants who accept those cards.

Use STP Model templates for segmenting your market and developing ideal marketing campaigns

Visualize, assess, and update your business model. Collaborate on brainstorming with your team on your next business model innovation.

In this section, you need to establish the type of relationship you will have with each of your customer segments or how you will interact with them throughout their journey with your company.

There are several types of customer relationships

• Personal assistance: you interact with the customer in person or by email, through phone call or other means.
• Dedicated personal assistance: you assign a dedicated customer representative to an individual customer.  
• Self-service: here you maintain no relationship with the customer, but provides what the customer needs to help themselves.
• Automated services: this includes automated processes or machinery that helps customers perform services themselves.
• Communities: these include online communities where customers can help each other solve their own problems with regard to the product or service.
• Co-creation: here the company allows the customer to get involved in the designing or development of the product. For example, YouTube has given its users the opportunity to create content for its audience.

You can understand the kind of relationship your customer has with your company through a customer journey map . It will help you identify the different stages your customers go through when interacting with your company. And it will help you make sense of how to acquire, retain and grow your customers.

This block is to describe how your company will communicate with and reach out to your customers. Channels are the touchpoints that let your customers connect with your company.

Channels play a role in raising awareness of your product or service among customers and delivering your value propositions to them. Channels can also be used to allow customers the avenue to buy products or services and offer post-purchase support.

There are two types of channels

• Owned channels: company website, social media sites, in-house sales, etc.
• Partner channels: partner-owned websites, wholesale distribution, retail, etc.

Revenues streams are the sources from which a company generates money by selling their product or service to the customers. And in this block, you should describe how you will earn revenue from your value propositions.  

A revenue stream can belong to one of the following revenue models,

• Transaction-based revenue: made from customers who make a one-time payment
• Recurring revenue: made from ongoing payments for continuing services or post-sale services

There are several ways you can generate revenue from

• Asset sales: by selling the rights of ownership for a product to a buyer
• Usage fee: by charging the customer for the use of its product or service
• Subscription fee: by charging the customer for using its product regularly and consistently
• Lending/ leasing/ renting: the customer pays to get exclusive rights to use an asset for a fixed period of time
• Licensing: customer pays to get permission to use the company’s intellectual property
• Brokerage fees: revenue generated by acting as an intermediary between two or more parties
• Advertising: by charging the customer to advertise a product, service or brand using company platforms

What are the activities/ tasks that need to be completed to fulfill your business purpose? In this section, you should list down all the key activities you need to do to make your business model work.

These key activities should focus on fulfilling its value proposition, reaching customer segments and maintaining customer relationships, and generating revenue.

There are 3 categories of key activities;

• Production: designing, manufacturing and delivering a product in significant quantities and/ or of superior quality.
• Problem-solving: finding new solutions to individual problems faced by customers.
• Platform/ network: Creating and maintaining platforms. For example, Microsoft provides a reliable operating system to support third-party software products.

This is where you list down which key resources or the main inputs you need to carry out your key activities in order to create your value proposition.

There are several types of key resources and they are

• Human (employees)
• Financial (cash, lines of credit, etc.)
• Intellectual (brand, patents, IP, copyright)
• Physical (equipment, inventory, buildings)

Key partners are the external companies or suppliers that will help you carry out your key activities. These partnerships are forged in oder to reduce risks and acquire resources.

Types of partnerships are

• Strategic alliance: partnership between non-competitors
• Coopetition: strategic partnership between partners
• Joint ventures: partners developing a new business
• Buyer-supplier relationships: ensure reliable supplies

In this block, you identify all the costs associated with operating your business model.

You’ll need to focus on evaluating the cost of creating and delivering your value propositions, creating revenue streams, and maintaining customer relationships. And this will be easier to do so once you have defined your key resources, activities, and partners.  

Businesses can either be cost-driven (focuses on minimizing costs whenever possible) and value-driven (focuses on providing maximum value to the customer).

Value Propositions

This is the building block that is at the heart of the business model canvas. And it represents your unique solution (product or service) for a problem faced by a customer segment, or that creates value for the customer segment.

A value proposition should be unique or should be different from that of your competitors. If you are offering a new product, it should be innovative and disruptive. And if you are offering a product that already exists in the market, it should stand out with new features and attributes.

Value propositions can be either quantitative (price and speed of service) or qualitative (customer experience or design).

What to Avoid When Creating a Business Model Canvas

One thing to remember when creating a business model canvas is that it is a concise and focused document. It is designed to capture key elements of a business model and, as such, should not include detailed information. Some of the items to avoid include,

• Detailed financial projections such as revenue forecasts, cost breakdowns, and financial ratios. Revenue streams and cost structure should be represented at a high level, providing an overview rather than detailed projections.
• Detailed operational processes such as standard operating procedures of a business. The BMC focuses on the strategic and conceptual aspects.
• Comprehensive marketing or sales strategies. The business model canvas does not provide space for comprehensive marketing or sales strategies. These should be included in marketing or sales plans, which allow you to expand into more details.
• Legal or regulatory details such as intellectual property, licensing agreements, or compliance requirements. As these require more detailed and specialized attention, they are better suited to be addressed in separate legal or regulatory documents.
• Long-term strategic goals or vision statements. While the canvas helps to align the business model with the overall strategy, it should focus on the immediate and tangible aspects.
• Irrelevant or unnecessary information that does not directly relate to the business model. Including extra or unnecessary information can clutter the BMC and make it less effective in communicating the core elements.

This example, the Business Model Canvas for a Restaurant , will give you a better idea of the dos and don’ts when it comes to creating a business model canvas.

What Are Your Thoughts on the Business Model Canvas?

Once you have completed your business model canvas, you can share it with your organization and stakeholders and get their feedback as well. The business model canvas is a living document, therefore after completing it you need to revisit and ensure that it is relevant, updated and accurate.

Check out the Amazon Business Model Canvas to identify key components of their business strategy, including customer segments, value propositions, and revenue streams.

What best practices do you follow when creating a business model canvas? Do share your tips with us in the comments section below.

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FAQs About the Business Model Canvas

How do i determine my value proposition, how can i build and maintain customer relationships, what should i consider when establishing partnerships in the business model canvas, how can the business model canvas help to analyze and optimize my business model, can i use the business model canvas for different types of businesses, how often should the business canvas model be updated or revised, how can i effectively communicate my business model to stakeholders using the business canvas model.

• Use clear and concise language
• Use visual-aids
• Customize for your audience
• Highlight key insights
• Be open to feedback and discussion

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Amanda Athuraliya is the communication specialist/content writer at Creately, online diagramming and collaboration tool. She is an avid reader, a budding writer and a passionate researcher who loves to write about all kinds of topics.

Profitable Business Models > Business Model Canvas

The Business Model Canvas Explained: Key Resources

• by  Joanne Moyo
• January 20, 2022

On the Business Model Canvas, the Key Resources segment refers to the supplies, assets, and materials required to deliver your value proposition to your customer segment. So, for instance, if you own a coffee shop, then coffee beans will obviously be an essential resource. However, you’ll need to look at your key resources in respect of the whole business model canvas.

Your key resources cannot be viewed from one angle. So a key question is: “what resources do you need to support other segments of your business model canvas?”

What are Key Resources?

So what is the definition of key resources? Key resources refer to the necessary products and services that increase your value proposition.    Essential key resources are crucial to the success of your business, without them your value proposition is compromised. Key Resources can be physical, financial, intellectual, human, and relational. It all depends on your business model.

The management of key resources is in-house, meaning it’s up to you to determine the resources necessary for your business to run. If you are working with a shipping partner who ships your products for you, some key resources for your business would be the technology, warehouses, and employees needed to ensure that operations go smoothly between your company and the Key Partner.

For example, during Netflix’s early years, one of its key partners was the United States Postal Service (USPS) who shipped DVDs via mail to customers. Some key resources for them were the technology needed to process all the DVD orders and update the inventory system and the employees at the logistic centers. When the DVDs were returned, they sorted and scanned the UPC barcodes on the special Netflix envelopes. Additionally, employees had to inspect the returned DVDs to ensure they weren’t broken or too damaged to play.   

Key resources can also evolve as the company grows and expands. Looking back at Netflix, in the early days, the company’s key resources were their DVD collection and cost-effective mail-order system. Today, Netflix’s key resource is undoubtedly the original content they produce. And the rights to stream online video content from the deals they brokered with some of the biggest production studios.

Types of Key Resources 

One way to think about the resources and assets your business depends on is to split them into four broad types.

• Physical resources

Physical resources are tangible assets used to create a value proposition. Examples of physical resources include inventory, equipment, point-of-sale systems, computers, machines, buildings, distribution networks, and manufacturing plants. All these enable your business to function.

An essential resource for Amazon, for example, is its fulfillment centers (warehouses), where they sort, pack, and ship orders. Without adequate infrastructure, Amazon would fail to keep up with the demands and needs of their customers.

What happens if inventory is not delivered on time? What happens to your business operations? 

You will need to make a comprehensive list of the physical resources you need for your business. This can help you plan for future emergencies, such as finding alternate equipment sources or gathering the names of repair companies. You must be aware of the physical dependencies of your company and its most vital components.

•  Intellectual resources

Most companies depend on specialized knowledge to maintain competition with other businesses. This type of knowledge can take many different forms: software algorithms, product manufacturing, intangible resources like your brand, intellectual property, partnerships, customer lists, and even product designs are valuable resources to factor into your Business Model Canvas.

Intellectual resources take some time and money to develop; such extensive measures should be taken to ensure that you own the rights to these intellectual resources. Filing for copyrights, trademarks, and patents is one way to do this.

Nike, for example, is heavily dependent on its brand to sell their products to a customer segment that is devoted to the brand. Similarly, Microsoft relies on software that has been tweaked and perfected over years of trial and error. Other businesses like Google have substantial intellectual resources such as softwares, patents, and trademarks and view these resources as a significant driver of business growth.

For example, the number of patents filed by Google between 2011 and 2012 grew by 170%. Apple’s patents grew by 68% in the same period.

•  Human resources

No matter what your business model looks like,  people will always be one of the most essential foundational resources. However, they are easily the most overlooked assets. Companies in the service industries specifically require a lot of human resources such as customer service representatives, software engineers, etc.

Uber, for example, is heavily dependent on the network of drivers that join the platform as employees. Another example is Amazon. Amazon truck drivers are essential human resources and combined with the trucks (physical resources), they deliver goods to Amazon customers.  

All you need to do for this section of the BMC is identify your ‘human resources’ and then figure out how to retain them and continue enabling their skills.

We may have a lot of automation nowadays. However, human capital is still the number one driving force for any business. Individuals trained in specific skills or those with market-related experience are crucial key resources.

•  Financial resources

Money is another crucial essential resource, and it includes things like cash and lines of credit. In fact, one of the primary reasons why some businesses fail is running out of money. Most start-ups fail because they are not making enough revenue (via revenue streams or funding) to sustain and grow their business.

Your business will need access to physical cash, a line of credit, or even a loan at support. Additionally, a sufficient flow of money is required to care for business obligations such as paying employees, rent, utilities, etc.

How to Define Your Key Resources

To identify the things your business can not operate without. A good exercise would be to think about your entire business model and determine the most crucial things required during a typical day of operation.

The following are some questions you can ask yourself:

• What tools do you need to produce your product or service?
• What are tangible and intangible assets required to market it to your customer segments?
• Would it increase your value proposition if you add this as a key resource?
• Would it decrease or compromise your value proposition if you remove this from a list of key resources?
• Does this resource give you an edge over the competition?
• What assets would enable you to attract more customers?
• What assets would make running a business much easier?
• What kind of trampolines you need in order to scale up your business?

All businesses face challenges regardless of how prepared they are. Understanding the resources your company needs for daily operations is crucial in insulating it from unforeseen obstacles.

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Key Resources in a Business Model Canvas

The process of business model creation and evaluation has become much easier recently, thanks to the appearance of various appliances like Business Model Canvas. It provides a framework for identifying and organizing the key elements of a business and how they fit together to create value.

Key resources are considered to be one of the crucial parts of any business model.

Today, let’s discuss in more detail how key resources are linked to the Business Model Canvas and define how they can influence the development of your business and contribute to its success.

What are Key Resources?

Physical resources, human resources, intellectual property, financial resources, network resources, defining your key resources, using key resources in business model canvas.

Key resources are the assets and credits that most businesses rely on when devising, delivering, and conveying value. Based on the aspect of work they influence, these resources can be grouped into different classes, like human resources, financial, physical, etc.

Key resources can also be categorized as tangible or intangible:

• Tangible resources are physical assets such as machinery, equipment, buildings, and inventory;
• The second type is more about something that is not materialistic, such as intellectual property, patents, trademarks, and customer data.

These resources are critical to a business model because they enable a company to perform key activities, create value for customers, and generate revenue. Without them, it would be practically impossible for a company to operate effectively and achieve its goals.

Identifying key resources requires a thorough understanding of a company’s business model, industry, and competitive landscape. In order to do that, a company has to determine its key activities. Only after doing that they can figure out which resources they need to perform these activities effectively.

For example, some of the assets that are essential for producing their goods are various raw materials, production equipment, and professional workers. For a software company, it would be necessary to gain access to the following:

• Specialized software development tools;
• A talented team of software engineers;
• Intellectual property such as patents and trademarks.

By using various Business Model Canvas, you can create a structured scheme identifying and organizing key resources. The canvas is composed of nine elements. Some of the main ones are key activities, customer segments, value propositions, and key partnerships.

In the lower-left quadrant of the canvas, you’ll find key resources side-by-side with key activities and key partners. This quadrant is the representation of all the resources and capabilities needed to create value for customers.

What are the Main Kinds of Key Resources?

Any business requires a number of key resources to operate effectively. So, now we want to present you with a list of some of the most common ones and describe their features.

Physical key resources are one of the crucial elements of any business model. First of all, they include substantial assets like various appliances, tools, and inventory. Plus, any company needs a building – a place where they organize their production and deliver their services to the customers.

We already mentioned that the usage of this type of resource is vital for manufacturing or transportation industries.

Physical key resources are also essential for companies involved in construction, mining, and agriculture , as most of their working processes require the usage of specialized tools and machinery. Additionally, they are crucial for businesses in the retail industry , where inventory, store layout, and displays act as an attraction for customers.

Physical assets are not limited to production or service delivery activities. Things like working spaces, furniture, utilities, and technological devices make it possible for any company to effectively perform its administrative functions as well.

For example, a financial services company requires access to high-speed Internet, computer systems, and a comfortable spot for work to conduct its operations and serve its customers.

No business can become outstanding without human key resources . You can call them a backbone in a way. They refer to the people who work for a company, including employees, contractors, and partners, and play a vital role in driving growth, innovation, and success.

Human resources are critical for companies involved in service industries such as:

• Healthcare;
• Consulting.

If a company wants to succeed in these industries and provide services of the highest quality to meet the needs and expectations of their customers, they need to hire workers that are professional, educated, skilled, and qualified.

For example, a healthcare company requires highly skilled personnel that are experts in their field in order to guarantee excellent patient care. Similarly, an education company requires talented teachers and professors to engage their students and make the learning processes effective.

Human assets are also really important for companies that provide their services for technology-based industries , like IT services, design, content creation, etc.

These companies require a proficient and talented team of software engineers, designers, and scientists to come up with fresh ideas and be the driving force of innovation in various fields.

Human key resources are not only about technical skills and knowledge. Creativity, leadership, and teamwork are some other essential features that are extremely valuable for any business.

These qualities are crucial for driving innovation, collaboration, and productivity and are a necessity for businesses looking to stay ahead of the competition.

For any business owner, one of the top priorities is the effective management of human resources. It involves the following:

• Identifying and attracting top talent;
• Providing opportunities for professional growth and development;
• Creating an environment that will motivate your employees and lead to a boost of creativity, innovation, and productivity.

Intellectual property (IP) is a valuable resource for businesses of all sizes and industries. It refers to the legal rights that protect all the unique products created by someone, like literary and artistic works, symbols, names, and designs.

Some of the forms of IP you might be familiar with are patents, trademarks, copyrights, trade secrets, and industrial designs. The main purpose of all these protection forms is to give companies the possibility to ensure their unique ideas and creations are preserved.

They prevent others from using them without permission or compensation.

For example, a software development company may hold a patent for a unique software algorithm or a trademark for its brand name. Similarly, a fashion company may hold copyrights for its clothing designs or a trademark for its logo.

• For any business that wants to remain competitive and relevant in the market and ensure the safety of their unique products and possessions, IP is a must;
• It gives businesses an opportunity to demonstrate their unique color, manner, and style and find customers that’ll resonate with it. It makes it possible to establish your differences;
• Moreover, IP can also serve as a valuable asset that businesses can monetize through licensing agreements, joint ventures, or other business arrangements. This can provide a valuable source of revenue for businesses and help them generate new income streams.

If businesses want to significantly increase the value of their intellectual assets , effective management of IP is not an option but a necessity. It involves identifying and protecting valuable IP assets, monitoring and enforcing IP rights, and developing strategies for leveraging IP for business growth and success.

Financial key resources are the lifeblood of any business. They refer to the financial assets that a company possesses, including cash, investments, credit lines, and other financial instruments.

No business can develop and reach success in this competitive and fast-moving world without a strong financial base. What are their main features?

• They provide the necessary capital for the expansion. Businesses can invest in the development of their employees and the creation of new products and services. It allows them to succeed in various marketplaces;
• Moreover, financial resources are also crucial for businesses looking to manage their cash flow and maintain financial stability . They enable companies to pay their bills on time, manage their debt obligations, and respond to unexpected financial challenges.

Business owners should pay more attention to the management of financial resources , as it’ll help maximize their financial performance and success.

This involves developing and implementing effective financial strategies, managing cash flow, and monitoring key financial metrics such as revenue, profit margins, and return on investment.

Monitoring key financial metrics is the compass that guides businesses through the tumultuous seas of economic uncertainty. It’s not merely about crunching numbers; it’s an art form that blends analytical precision with strategic foresight.

Savvy entrepreneurs recognize that these metrics are the pulse of their enterprise, revealing hidden opportunities and potential pitfalls alike.

By leveraging sophisticated financial tools and embracing data-driven decision-making, companies can transform raw figures into actionable insights, propelling them towards unprecedented growth and resilience in an ever-evolving marketplace.

Financial key resources are also critical for businesses looking to attract investors and secure funding for growth and expansion. Investors and lenders typically look for companies with strong financial fundamentals and a track record of financial success.

Therefore, businesses must demonstrate a clear understanding of their financial position and the resources needed to achieve their growth objectives.

In every business ecosystem, the orchestration of financial services stands as a cornerstone of success. The meticulous calibration of digital infrastructures is indispensable.

By enlisting the expertise of adept developers, businesses can significantly bolster their financial operations. This move not only enriches the technological prowess of a company but also amplifies its market stature through enhanced financial strategies and services, thereby achieving unparalleled operational excellence.

Our last but definitely not least point is network key resources . Today, the market is really globalized, and all industries are connected in some way with each other. So, creating a strong functioning network is essential if you want your business to succeed.

These resources are based on the connections and relationships that a business has with its suppliers, customers, partners, and other stakeholders in the industry.

There’s a variety of benefits effective network resources can provide any business. Some of the main points are:

• Increased access to new markets;
• Opportunities for collaboration and innovation;
• Access to new technologies and resources.

For example, a business that has a strong network of suppliers and distributors can quickly and easily source materials and products, reduce costs, and deliver high-quality products and services to customers.

Similarly, a business that has a strong network of partners and collaborators can tap into new sources of expertise, ideas, and innovation and develop new products and services that meet the evolving needs of customers.

Moreover, network resources can also provide businesses with a valuable source of information and insights into industry trends, customer preferences, and competitive dynamics.

Defining key resources for a business involves identifying the critical assets and capabilities that the business needs to operate, compete, and succeed. Here are some steps to help define your key resources:

• Identify your business model. First, identify your business model and the key activities that are needed to make it work. That way you’ll be able to figure out which resources you’ll need in order to reach all your objectives;
• Identify critical resources . Next, identify the critical resources that are necessary for the successful performance of your business. This might include physical assets like various tools and space for work, financial resources like capital and financing, human resources like expertise employees, and intellectual resources like patents and trademarks;
• Prioritize resources. Assess your resources and outline the ones that are the most important for the development of your business. This will help you designate your resources more effectively and efficiently;
• Assess strengths and weaknesses. Define the weak and strong points you currently have. By doing that, you can outline where you need to invest more resources or adjust your strategy;
• Plan for contingencies . Unexpected situations and various emergencies are practically unavoidable, so it’s essential to create a backup plan. An alternative strategy and action plan will decrease the risk of failing.

No Business Model Canvas (BMC) can function properly without key resources. This strategic tool allows companies to create, develop, and effectively operate their business models. In the BMC, key resources are the assets and capabilities that give businesses an opportunity to comfortably organize their work in all aspects and increase their productivity.

You can create your models yourself or you can use other companies for an advertisement:

• Start by determining the key resources that are essential for your business to function;
• Group them according to their type and importance;
• Ensure that they are aligned with your value proposition.

This will help you create and deliver value to your customers effectively.

To avoid any mishaps and emergencies, or at least to make their impact not as strong, think about some other strategies you might use in case the original one doesn’t work out.

Defining your key resources is an important first step in developing a successful business strategy. There are a few steps you need to take in order to achieve that:

• Identify your business objectives, short-term and long-term goals, and key performance indicators;
• Conduct a comprehensive audit of your business resources. This should include an inventory of your physical, human, and intellectual resources;
• Determine which ones are crucial for the success of your business;
• Prioritize them based on their importance and value to your business;
• Finally, develop a resource management plan that outlines how you’ll manage and optimize your key resources.

In order to make this process simpler and more organized, you can operate some of the newest tools, like Business Model Canvas.