Value creation and capture

The total value created by a company is the difference between its WTP and WTS. Strategies that lead to exceptional performance use three levers to produce differentiated value:

  • Create customer delight to increase willingness to pay.
  • Create improved work conditions to decrease employee Willingness to sell.
  • Improve organizational productivity in ways that are difficult to imitate.

There are only two ways to create additional value: increase WTP or lower WTS. Every significant initiative must either enhance customer experience (raise WTP) or make it more attractive for vendors or employees to work with you (lower WTS).

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