I was recently approached to speak at a corporate summit aimed at understanding how a plastics manufacturer could find accelerated growth in a commoditized market. Challenged by a crowded competitive landscape and an unclear vision of product differentiation, this resin producer was looking for ways to build out from their core.
By definition, value creation is any process that creates outputs that are more valuable than its inputs. There are a number of companies that have successfully migrated to more profitable business models and channel strategies by providing customers with products and/or services that are the basis of productivity. For example, additive manufacturing technologies (AMT) have become more relevant in industrial environments in the recent years. The main goal for companies using new manufacturing technology is to generate added value for the customers and to raise the process efficiency in the whole value creation system. The value creation system not only includes production and logistic processes, but also represents how a company creates, sells, and delivers products.
Some companies choose to invent and innovate organically. This, however, can be costly and time consuming. Value creation can also take the form of vertical integration. By acquiring downstream processes or services, companies can create greater customer satisfaction. An important question for corporate strategists is whether a company should participate in one or more activities and industries along the value chain. Should they only manufacture products or go further by engaging is after-sales service? What brings more value to your clients?
And let’s not ignore the impact of digital! Digital capabilities such as e-commerce platforms can significantly improve traditional customer-supplier experiences. Additional advances in automation, big data and analytics, and the Internet of Things (IoT) are creating additional opportunities for substantial gains along the entire industry value chain.
You may think the answer to the original question is a roll of tape, but I see otherwise. To me, this represents value creation. Take an adhesive, apply it to a substrate, and you have created a product that serves a multitude of applications.
At Match Point Strategies, we seek to create value for our customers. Looking for a greater competitive edge? We are ready to explore business options with you!