8.10 Key Activities

Key Activities are those a company must engage in to make its business model work. Every business model requires Key Activities, and they naturally differ depending on the business model type.

For Microsoft, the Key Activities include software development and marketing. Dell depends on supply chain management. A consultancy company will concentrate on problem solving.

Key Activities can be important in any business building block, but are especially prominent in the following:

Production

Production activity dominates the business models of manufacturing firms, be they related to design, manufacture, delivery or quality control.

Problem solving

Consultancies, hospitals, and other service organizations typically focus on problem-solving activities, requiring in turn knowledge management and continual staff training.

Platform/network

Creating or maintaining platforms can be a key activity. Visa's business model requires a common platform between banks, merchants and customers. Microsoft must supply a reliable operating system to support third-party software products. eBay's platform is its auction site and software. Platforms have to be maintained, extended and promoted.

Relevant Case Studies

Apple makes tablet computers and smart phones.

Commerce Bancorp provided banking services.

Lotus makes software.

Fiat makes motor cars.

Dell makes computers.

GlaxoSmithKline makes drugs.

Cisco makes routers and other IT equipment.

Liquidation auctions excess supplies.

SIS Datenverarbeitung provides information technology products and services.

Questions

1. What are key activities? How do they differ from key resources?
2. Name the three areas where key activities become important.
3. Describe first mover advantage in terms of key activity.
4. What key activities are employed in selling on the Internet?

Sources and Further Reading

1. Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers by Alexander Osterwalder and Yves Pigneur. Wiley 2010.