Life and Lessons for and by next CEOs

Academia, Strategic Management

Value Creation

History of business has taught us that, in order for a business to be successful, it has to deliver Economic value. It has to deliver something of value that another person is willing to pay for. In other words; It has to have a socially accredited form of value.

Value creation can take the form of any or a combination of the following twelve value offerings:

1.Product;
Selling a tangible object that has a demand, and produced internally or tasked to be produced.
2.Service;
Selling benefit by means of an action, based on a skill that is in demand.
3.Resale/Retail;
Selling a product at the viable and sustainable profit margin that was pre ordered and an inexpensive price and possibly in bulk.
4.Shared Resource;
Selling the use of a resource which can be shared by many clients concurrently without diminishing each clients experience.
5.Subscription;
Selling benefit on an ongoing bases and billing for the benefit on a reoccurring basis.
6.Lease;
Selling the temporary use of an asset on favourable terms.
7.Agency/Broker;
Selling the value of another business to and established or sourced client base for an agreed upon fee.
8.Audience Aggregation;
Selling access to an targeted, aggregated and established audience at an agreed fee structure.
9.Option;
Selling a guaranteed option for an agreed action in the future.
10.Insurance;
Selling the transfer of risk for an agreed series of payment based of a risk assessment analysis.
11.Loan;
Selling the loan of money for an agreed upon interest rate.
12.Capital;
Selling capital investment into business for an ownership stake in that business.

(Adapted from: Forms of Value – Josh Kaufman)

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