respond to each post with 150words
If a firm has created value, it is not always to capture the value. To create value, a firm must develop a strategy to sustain its profits once it offsets the investments over time. It is also important to discern different “value management” levels because which of these sources of value are accessible is dependent on the level at which the decision-maker operates (Straten, 2019). The strategy includes market input, market output, environment, and pricing strategies in addition to organizational capital and more. Creating value can also be described as giving a product or service of value to receive something of more excellent value in return. To capture value is to retain a certain percentage of the created value. The competition will bid up prices of the required resources in the factor markets and bid down prices in the output markets. (Brickley et al., 2016) When two firms plan to raise prices together, they generate less value. Because fewer people are buying items for more significant benefits than costs, they capture more value than they create.
The text has excellent examples of firms that have created and captured value, such as Walmart. To my understanding of this process, Amazon is a perfect example because it made a way that buyers can purchase a product and receive it the next day. Amazon has a diverse market. The prices for the products can vary. If a customer purchases more than one item for two-day delivery, it is more beneficial to buy from the site. As the guarantee became popular amongst consumers, the shipping moved to a guaranteed two-day service for an annual fee. While a yearly fee is now required, the cost is less than shipping charges to unlimited destinations. The organization utilized its resources and began to build warehouses in areas that received the majority of deliveries. Amazon increases its value because it can provide the same products quickly. After all, product warehouses are closer. This strategy ensured that consumers were still able to receive their product in the promised time. Since then, other retailers such as Walmart, Target, Best Buy began to offer similar services such as order online and pick up in-store and same-day delivery. While Amazon still wins for no contact delivery, customers were able to buy from their favorite stores. Amazon can capture the value because they remain number one in online sales.
If a firm has created value, they have to make sure that they put in the work to capture it. A way that a firm creates value is through work. There are a few ways a company can create value by marketing, service, and operations. With marketing, the company can persuade their customers to purchase from their company rather than the competitors. This can be by different sales or coupons they offer. For service, the company can show how they maintain the value of the products they are selling to their customers. Lastly, there are operations, by showing the transformation activities that change inputs into outputs that are sold to their customers (Jorgenson, 2015).
An example of an organization that creates value for its customers is Target. Target has different deals for all of its customers. They also offer products that are for everyone, and it is a one-stop-shop. They sell products from groceries, clothes, and electronics. They will also have different sales for their customers as well as having different coupons in their Target Circle program. This always the customers to clip different coupons and purchase products based on coupons they find. This helps Target gain more sales by offer coupons customers didn’t even know they needed for a certain product (O’Malley, n.d.).
Image preview for”if a firm has created value, it is not always to capture the value.”