Business Model Canvas - Building Blocks - 06 - Key Resources

Key Resources = most important assets required to make a business model work

The Key Resources of a Business allow an enterprise to:

• create and offer a Value Proposition
• reach markets
• maintain relationships with Customer Segments 
• earn revenues

Depending on the type of business model we need different kind of Key Resources. For example:

• Microchip manufacturer requires: capital intensive production facilities
• Microchip designer focusses more on: human resources.

Key Resources can be:

• Owned or,
• Leased by the company or,
• Acquired from Key Partners

Questions to ask ourselves while thinking about Key Resources:

• Our Value Propositions require what type of Key Resources?
• Our Distribution Channels require what type of Key Resources?
• Our Customer Relationships require what type of Key Resources?
• Our Revenue Streams require what type of Key Resources?

These are some ways to categorize Key Resources:

• Physical:
• Key resources are physical like: manufacturing facilities, buildings, vehicles, machines, systems, point-of-sales systems and distribution networks.
• Retailers like Walmart and Amazon.com rely heavily on physical resources, which are often capital intensive.
• Walmart has an enormous global network of stores and related logistics infrastructure.
• Amazon.com has an extensive IT, warehouse and logistics infrastructure.
• Intellectual:
• Intellectual Resources are like: Brands, Proprietary Knowledge, Patents and Copyrights, Partnerships, and Customer Databases
• These are increasingly important components of a strong business model.
• Intellectual resources are difficult to develop but when successfully created may offer substantial value.
  
• Consumer goods companies such as Nike and Sony rely heavily on Brand as a Key Resource.
• Microsoft and SAP depend on software and related intellectual property developed over many years.
• Qualcomm - a designer and supplier of chipsets for broadband mobile devices, built its business model around patented microchip designs that earn the company substantial licensing fees.
  
• Human:
  
• Every enterprise requires human resources, but people are particularly prominent in certain business models.
  
• Example: Knowledge intensive and creative industries.
• Pharmaceutical company like Novartis relies heavily on Human Resources. Its business model is predicated on an army of experienced scientists and a large and skilled sales force.
  
• Financial:
• Some business models call for financial resources and/or financial guarantees, such as cash, lines of credit, or a stock option pool for hiring key employees.
  
• Ericsson, the telecom manufacturer provides an example of financial resource leverage within a business model.
  
• Ericsson may opt to borrow funds from banks and capital markets, then use a portion of the proceeds to provide vendor financing to equipment customers, thus ensuring that the orders are placed with Ericsson rather than competitors.