The resources which are important to the organization and create a value proposition in service to its customers and deliver the product to the customers are called key resources. These types of business resources are crucial and are important to have for your business in order for it to succeed. It is usually based on tangible and intangible resources.
They are also considered as important assets of the company in particular which are required to create the final product and are usually differentiated from the competitors by few key resources. Key resources involve the operational and business which define the kind of material the business will need and all type of materials that the business needs to employ. These aspects play a very crucial role in getting the value to the business and help in achieving minimum value a business needs to have in order to deliver to its customers.
The types of business resources will impact the sustainability of the organization along with its profitability. For example, if the organization achieves double the sales target decided, and the company starts to grow rapidly, then the company will keep on growing only if you understand what key resources are and which key resources are impacting increased demand.
Hence it is essential that you should be able to tell whether the physical resources that you have will be able to fulfill your expectations or no. Along with physical resources, you should also be able to tell if the current human resources will be enough or if you would be needing additional talent to be recruited in the company in order to meet the requirement of the business.
The types of business resources are divided into four different types :
- Physical Resources
- Human Resources
- Intellectual Resources
- Financial Resources
1) Physical Resources :
These are considered as tangible assets which the organization uses to create value offering and value proposition to its customers. Physical resources may include the equipment, buildings, inventory, the manufacturing plant and distribution network which are extremely crucial for the business to function properly.
Physical resources are important for the functioning of the organization since without things like equipment and inventory and manufacturing plant it is difficult for the business to function. While these are required for the business which has a tangible product offering, for the business which has intangible services as an offering, there would not be the requirement of a manufacturing plant, distribution network, etc.
But in fact, there will be a business process that needs to be followed for the delivery of the service to the end customer. It is also is ensured that the organization updates itself with the latest resources available in order for proper and efficient functioning. Physical assets are usually considered stable in nature but they do come with a life post which they need to be replaced by the organization. For example, any company would not build a new manufacturing plant but it would add the modern facilities which would make the existing plant more modern does update itself without practically moving the existing resources.
2) Human resources :
Employees are considered in the most underrated Assets of any organization. They are important for the functioning of any organization without which the activities of an organization will come to a standstill. Human resources are even more important in the industries which provide services since a great deal of creativity and knowledge is required in those domains.
Human resources are also important in customer service and as troubleshooters to understand the nature of the problem the customer and provide customized solutions. For example, the truck drivers of FedEx are human resources which combine in the physical resource like trucks to deliver the products to the customers of FedEx and create an experience unique to FedEx.
The same is the case with customer service representatives of Apple and Google who provide an excellent troubleshooting service and after-sales support coupled with the human factor. Pharmaceutical giant Novartis is highly dependent on people for its sales and for its research and development.
Qualified scientists who are people work for innovative ideas and new medicines to cure diseases and efficient sales team which is comprised of Human resource helps to sell the medicines to the end customers which are doctors. Hence when human resources are coupled with technology like and physical resources organization turns out to be more productive and better performing.
3) Intellectual resources :
These are the types of business resources which are nonphysical and intangible in nature like patents of the product, brands of the organization, copyright over important materials and even the partnerships. Customer data and customer knowledge and even the talent in the organization as a form of intellectual resource.
Once they are developed the can offer unique advantages to the organization. Southwest Airlines which is the leading airlines in the aviation sector has often emphasized that people are the biggest assets and they always try to keep their employees happy, who in turn will serve the customers and make sure that they are happy.
They follow the philosophy that a happy employee will create a happy customer. Similarity Google is known to hire the best and talented people in the industry. Google is also known to pay very well to their employees and retain the talent. Companies like Microsoft and Apple are also known to recruit the best in the industry and pay them accordingly so that employs do not think of leaving the organization.
Intellectual talent also extends to the patent department. Innovative companies like Apple often file for patents for their innovative products. The patent is also another important factor in the pharmaceutical industry where the companies have to file a patent for a particular medicine as soon as it is developed.
From the year 2000 companies have realized the importance of intellectual resources and it can be seen clearly through the increasing patents being filed all across the globe. A number of patents filed by Google grew by 170 % you as that of Apple grew by 60% in the same time period. Hence patents are seen as major business driver and growth driver for the organizations.
4) Financial resources :
These often include cash, credit, and lines of credit along with the ability to have options of stock plans for the employees of the organization. Most of the businesses have financial resources on a regular basis but few companies will have extremely strong financial resources such as the banks which are based entirely on financial resources and use them as a key resource.
Similarly, insurance companies work entirely on financial bases and use finance as the ultimate resource for the organization. For example, in the case of a mobile manufacturer, the physical resource would be the Assembly materials such as glass, hardware parts, plastic and other materials which are assembled by robots.
Another important resource would be intellectual property resources like patents and even customer intelligence. Who was the earlier one can be filed by the organization the latter would be very useful for knowing their preferences and to offer discounts and special deals for repeat customers or repeat purchases from the same customer.
Another important type of business resource would be a human resource who would help to assemble the parts by in been incorporated in certain steps of assembly. Human resources are also important to overlook the entire process and to avoid errors if any. In terms of financial resources, the mobile manufacturer which require capital investment right from infrastructure to inventory to procuring raw materials, assembling them and marketing them to the customer.
The second classification of types of business resources according to the types of businesses :
All businesses can generally be categorized into three types. All these categories have a business with a common resource requirement. These three categories are as follows:
1) Product-oriented businesses:
The organizations which focus all their functions on making and selling a product are called product-driven businesses. More often than not these products have unique characteristics and a customer segment which is willing to purchase. Resources for these businesses are human as well as intellectual scenes usually these organizations require intellectual property and expertise in their particular industry and domain. The creator of famous mobile game Angry Birds, Rovio is one such example.
2) Scope driven businesses :
These types of business resources work on providing a value proposition to a specific segment of customers. For example, an organization which aims to specialize in being IT service provider for all the pharmaceutical companies within the area would be categorized under scope driven business. These types of business resources have resources and their intelligence which are well developed and cater to the target customer segment. They also have a standardized set of processes and infrastructure in a few cases such as service centers which cater to specific needs.
3) Business is based on infrastructure :
As the name suggests these types of businesses secure profitability by the leveraging they developed as well as implemented infrastructure. For example, telecommunication industry provides a huge investment to develop the infrastructure related to telecommunications in a country and then gets the rewards for many years to come with only minor investments in the systems to keep them updated. Wholesalers and retailers are also classified as infrastructure driven businesses since they depend on their infrastructure which is established to maintain the long-term profitability.
This article by Hitesh Bhasin first appeared on Marketing91
