GLOSSARY
Value creation
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Value creation is the process of generating and delivering benefits to customers that exceed the cost of production, resulting in a positive impact on the business's financial performance and market competitiveness.
What is Value Creation?
Value creation is at the core of every successful business. It involves providing products or services that satisfy customer needs better than competitors and at a price that justifies the cost of production.
Why It Matters
By focusing on creating value, startups can attract and retain customers, differentiate themselves in the market, and build a strong foundation for growth and profitability.
Examples
- Netflix revolutionized the entertainment industry by offering a vast library of content at an affordable subscription price, creating immense value customers.
- Tesla's innovation in electric vehicles not only addresses environmental concerns but also provides superior performance, safety, and user experience, driving value creation in the automotive sector.
Related Concepts
- Value Proposition: The unique value that a product or service offers to customers, defining why they should choose it over alternatives.
- Customer Value: The perceived benefits that customers receive from a product or service, influencing their purchasing decisions and loyalty.