What is VALUE CREATION?

Value creation is the primary aim of any business entity. Creating value for customers helps sell
products and services, while creating value for shareholders, in the form of increases in stock
price, insures the future availability of investment capital to fund operations.
In simple terms value creation is defined as giving something valuable to receive something
more valuable.
Ex. “ Making products and providing good services can gain trust from the customers”.

To succeed in the bussiness we must create value to owners, employee, customers.
Value to owners – high returns consequently to owners makes the value.
Value to employees – Rewarding for their work, sometimes involving in decision making
can make value.
Value to customers – Providing better products and services to customers results in value.

Apart, value creation to stake holders is an important task. A stake holder is an investor. A stake
holder can be valued in different ways.
1.Innovation
2.Productivity
3.Design thinking

1.Innovation:
This is a completely new term to business. It fills an untapped customer needs. Ideally the builds
a new. It completely depends on Competitors, creativity, research new ideas, experiments etc.,
Ex. Researching about what customer need, and creating
2.Productivity:
It is the measure of efficiency of a thing ( it can be a person, machinery, Factory, system etc.,)
in converting inputs to useful outputs. It is the ratio of output to input.

Efficiency = OUTPUT / INPUT * 100
Ex. A Good car can be manufactured by a company if all the workers input is efficient

3. Design thinking:
   It is proven and repeatable problem solving protocol that any business or professional can
   employ to achieve big results. Design thinking combines creativity and critical thinking that
   allows information and ideas to be organized, decisions to be made, situations to be improved,
   and knowledge to be gained.
   Design thinking is human centered approach to innovation anchored in understanding customers
   need, rapid prototyping and generating creative ideas that will transforms the way you develop
   and process. The figure shows the process of Design thinking.

• 

Empathise : lt results in taking inputs from previous data and making decisions to overcome
the problems.

Define : It defines the problems in the current situation

Ideate : With a clear idealogy, with some inputs a concept is set.

Prototype : A sample model is created and released to test the concept or process.

Test : After releasing to market to test anaylsis is performed for the prototype that is released
to take an appropriate action.