The [[Value process framework]] captures the three main levers that influence a company's [[Value creation]] and [[Value capturing]]. These three levers are:
# [[Perceived use value]]
# [[Costs]] for creating this value
# [[Competitive discount]], which reduces the customers willingness to pay and reduces profit.

In order to create a [[Sustainable Competitive Advantage]] a company needs to fulfill the following requirements with respect to value creation and value capturing:
* Value creation:
** A company must create value by providing customers with a perceived use value that exceeds the production costs.
** Only if this value is greater than the value created by the strongest competitor does the company have the opportunity to provide a higher consumer surplus while still capturing value in the form of economic profit.
* Value capturing:
** Furthermore: in order to limit the amount of [[Competitive discount]], the consumer surplus needs to unique. This uniqueness can be achieved, for instance, through exceptional quality, a strong brand image or fast time to market. Only uniquess leads to a reduction in the number of competitors.
In order to sustain the competitive advantage over time it is also important that this consumer surplus is imperfectly imitable or substitutable.

The [[Integration of porters five forces and the value process framework]] gives a complete picture of companies inherent potential to capture profit.

Part of [[Strategies for E-Business]]
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businessmodelling_public
created
Thu, 23 Sep 2010 18:47:13 GMT
creator
dirkjan
modified
Thu, 23 Sep 2010 18:47:13 GMT
modifier
dirkjan
tags
Article
Business
M8
Modeling
creator
dirkjan