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Scopo insights.

Creating Value

11/11/2015

 
There is a common denominator when it comes to "why" a small business operates: the desire, and the need, to create value. Value is the monetary worth of a product or asset. Therefore, we say the "purpose" of a small business is to first, create value for its customers and, second, to appropriate some of that customer value in the form of profit, thereby creating value for the firm.

Value can be created in two ways: by production and by commerce. Production creates value by physically transforming products that are less valued by consumers into products that are more valued by consumers. Commerce creates value not by physically transforming products, but by repositioning products through arbitrage across time and space.

Consumers demand for value is calculated by price elasticity, which in part is representative through their responsiveness to changes in price or incomes. Small businesses can attract more customers if the value added to customer demand is greater than the purchase price paid by the consumer. But how do small businesses know what price can be charged to create maximum value for the firm?

At Scopo, we work with small business owners to help them achieve their goals and add value to their organization. We have the expertise and capabilities to develop winning strategies for our clients that can't be matched! Contact Scopo today to discuss your ideas and learn why "Your Scopo is Our Scopo!"

    Author

    Joe Immordino, MBA
    President, Strategic Advisor

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