Free «Value Creation» Essay Sample

Value Creation

The purpose of any company is to create value for shareholders, employees, and customers. Creating value for shareholders ensures the future availability of investment capital and thus, sufficient funding of operations, and it helps to sell services and products to customers. Companies should provide customers with compelling reasons in order to make their first acquisitions and next orders.

Nowadays, the World Wide Web has become an important mediator between consumers and producers. It influences the most important channels in the supply chain, including customer support, advertising, and processing procedures. There are many opportunities to create value online, as products transfer between manufacture’s assembly line and re-sellers, individual customers, or other end-users.

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Investigation of value creation has pointed out its three unique parts: transference of different products or groups together; delivery of information in faster and more convenient way than through other means; formation of simulations or alternatives to the elements of the online purchase, involving the ability to talk to others and the physical handling of products.

Opportunities for creating value depend on the way of cooperating with customers. The companies usually create value by concentrating on two types of connection with customers: user-focused and buyer-focused interactions. As a rule, the buying process is more powerful and convenient for customers in the buyer-focused interaction, while user-focused interactions include notices about product updates, value-added information about the service or product, and online technical support. Some companies also create value on the basis of the special purposes of their customers and provide supplementary information for them.

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Customer co-creation is another approach to value creation, which implies that customers are involved in the evolution or development of the service or product. There is also potential development for value creation when companies assist clients in the removal of undesirable products. Besides helping customers, this kind of interaction produces promotion, pricing, and leasing opportunities for sale.

To conclude, online community is a channel for value creation. Although several approaches have been adopted for value creation, buyer-focused and user-focused interactions remain the two leading ways for companies of providing information and support.

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