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An introduction to value creation

Value creation is one of the business model components that describes what the company is offering to whom.
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Hello in this video, I will tell you something about value creation, if you remember the business model canvas than the part that is about value creation are the four building blocks that are most to the right, which includes both the value proposition, the customer segments, the channels and the customer relationship. And sometimes the value creation as part of the business model is also referred to as the value proposition only. But what value creation really is about, and it makes it really interesting to look at, is that you need to find out how you actually can match your offers as company like your products or services or a solution with the demand of the customer.
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What is it that you have and that you can do that the customer really wants from you? And it’s actually really important that you find something that makes you unique, something that is different from your competitors, and that is something that the customer is really willing to to buy from you and really is looking for.
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So you can either, of course, be better than others or you can be more cheaper than others, or you just are in there like, for example, a location that no one else is, and where there’s really a demand for something that you offer and all those choices that you need to make here in the part of the value creation are somehow connected to strategy consideration. Because when it comes to strategy, you also try to differentiate yourself from others.
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And you can do that either by, like diversify and say, OK, I’m the one that is that is better and that do things with higher quality and and like the best products, or you try to be the one that is more cheaper and say, OK, but my strategy is about like being the cheapest one, and that’s why the customers are actually choosing you. They look for a hotel and because they are not maybe it’s not so important how nice it is. It’s more about like that. They use the cheapest one. Then you can compete on this as well.
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There’s also a third type of strategy that you can use, and that is more the niche strategy where you just do something that no one else is doing and you don’t really have this like close competitors and you just do something in a certain location or maybe in something that is not provided by someone else here. And based on this like strategy consideration, you really need to think how you can make very good choices around your business model and the things that you offer and how the customer actually should get to know this.
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And it’s really, really important that you really think about how the customer both will get to know about the things that you are doing, how they actually recognize you, how you will communicate with them, how you reach out with them, and how you really show that this value that they do is really important. And one thing that is also important to consider around this value creation is, that not all the times. it’s only one business model that you will work with. Sometimes you will have several business models at the same time, you will have something very solid product, and then you will add services maybe to it or have like different products that you sell in different ways.
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And then it’s really important in this aspect of the value creation that you think about, how can they go along with each other, how do they fit to each other and how can they solve different purposes around this? And one one tool that we will introduce as well is the value proposition. And there the focus is really on how can the the office of the company or the business and the organization really be matched with the customer needs and and benefits.
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And it’s also really the place where you need to be creative and where you really can try to work with new things and really think in a different way outside the box that you really can create something new, innovative and make a good, good start for your business model and really think about how to create value for the customer.

In this video, Wiebke will go through the basics in value creation. She talks about how to match your company’s offers with your customers demand, how to find your unique advantage and how to let your customers know about your offers.

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