CREATINGVALUEandCAPTURINGVALUE-Huntsville,.pptVIP

CREATING VALUE and CAPTURING VALUE CREATING VALUE Value Creation (also called Value Added) Value is created anytime an action is taken for which the benefits exceed the costs, or anytime an action is “prevented” for which the costs exceed the benefits. This applies to several aspects of production: quantity, quality, entry, innovation, method of production. Also applies to relationships between the firm and its employees, e.g., job safety. CAPTURING VALUE The concept of value creation says nothing about profit. The benefits are measured to the consumer; the costs to the firm—you can’t det