Introduction
Value creation is one of the key concepts in organizational management. It is defined as adding value to a product or service to satisfy customer needs and generate profits for the organization. To understand what creating value means, it is essential to focus on three main aspects: meaning, prerequisites, and consequences. The meaning of creating value lies in the fact that the organization should produce goods and offerings that fulfill customer demands and simultaneously produce revenue (Hein et al., 2019). It is essential to understand that creating value is not limited to producing goods but can also include improving the quality of customer service and optimizing processes within the organization.
How to Create Value for Brand and Products
The prerequisites for creating value involve analyzing the market and customer needs. Organizations must understand what their customers need and what changes may occur in the market in the future. Only then can they create products and services that will be successful in the market.
The consequences of creating value lie in the organization’s ability to generate profits (Freudenreich et al., 2020). If an organization can create value for its customers, they will be willing to pay more for its products and services, increasing profits. Creating value is measured in organizations using various indicators.
One of the leading indicators is the profit the organization earns from selling its products and services (Madden, 2020). Another important indicator is customer satisfaction. Customers who are satisfied with the products and services receive value from them, and the organization creates value (Willumsen et al., 2019). Other indicators can be used to measure creating value, such as the costs of producing the product or service, the time spent making it, and others. Choosing the right indicators that accurately reflect value creation within the organization is essential.
Conclusion
In conclusion, creating value is a vital process in an organization’s successful operation. To create value, it is necessary to understand customer and market needs and manage all processes within the organization effectively. Optimizing production processes, improving customer service quality, and implementing new technologies and working methods that will help increase efficiency and customer satisfaction are essential.
References
Freudenreich, B., Lüdeke-Freund, F., & Schaltegger, S. (2020). A stakeholder theory perspective on business models: Value creation for sustainability. Journal of Business Ethics, 166, 3-18.
Hein, A., Weking, J., Schreieck, M., Wiesche, M., Böhm, M., & Krcmar, H. (2019). Value co-creation practices in business-to-business platform ecosystems. Electronic Markets, 29, 503-518.
Madden, B. J. (2020). Value creation principles: The pragmatic theory of the firm begins with purpose and ends with sustainable capitalism. Wiley.
Sjödin, D., Parida, V., Jovanovic, M., & Visnjic, I. (2020). Value creation and value capture alignment in business model innovation: A process view on outcome‐based business models. Journal of Product Innovation Management, 37(2), 158-183.
Willumsen, P., Oehmen, J., Stingl, V., & Geraldi, J. (2019). Value creation through project risk management. International Journal of Project Management, 37(5), 731-749.