Firm's Value Creation Process | International Business | From A Business Professor

Hello everyone. Welcome to Business School 101. In this video, we are going to study the firm’s general strategy and value creation process. A firm's strategy can be defined as the actions that managers take to attain the goals of the firm. For most firms, the preeminent goal is to maximize the value of the firm for its owners and shareholders. To maximize the value of a firm, managers must pursue strategies that increase the profitability of the enterprise and its rate of profit growth over time.

[@avasteinman6953]

I think the idea of maximizing the value of a firm is very interesting to me. It is something you cannot really see or put numbers on, so I was very intrigued while watching this video on how best to do this. It is first about profitability and profit growth. High value is so important because that means costumers are willing to pay more if they view that product to have high value. The 4 functions of primary activities was very interesting to me. Specifically, the way you build a product and how you market it and how that correlates to your profit.

[@joshuaplunkett4888]

This video really helped me understand the many layers and factors that contribute to the growth of value of firms. This video is a must-see for any potential business owners, and this video encapsulates the knowledge that it takes to create business value.

[@BradenWheat1864]

This video gives great examples of how a firm can increase their value, by taking multiple different routes. I have always looked at profits and profitability as the same thing, but this video shows how they can differentiate depending on which route the firm pursues. I feel that in business, this is a must know to understand how to get a business from barely profiting to creating substantial profits and profit margins in any industry, whether that be agriculture, oil and gas, or the automotive industry, a business can use this to refine their processes.

[@alexbrown4215]

This video does an excellent job at detailing the value creation process. I find it cool all of the different ways that companies can create and add value to certain things.

[@clinthuff8547]

Great overview of how a company can create profitability and profit growth. I think it is a fine line that company's have to decide to try to increase value or design a new product. Generally, the creation of a new product can be timely and expensive. However, trying to increase value of a product can incur costs such as marketing and redesign costs. Both options must be utilized to ensure a business is successful in maintaining profits.

[@GraceWatson13]

I liked how this video incorporates topics that I have learned in other classes. This video expands on those topics, which I found helpful. From this video, I learned the importance of consumer surplus. I think consumer surplus is important because customers do want to feel as though their purchase was at a lower price than what they expected. I feel that a good example of this is Amazon. Many people take to social media to share the deals or lower prices they have found on Amazon.

[@violettakhisamova1066]

Consumer surplus and value creation is a very important topic for me as of being a marketing major. I was unsure of these terms before, but now I have a precise understanding of the concept. Yet, I think understanding of these concepts is very important for a lot of business majors, but just the marketing. Because knowledge on how to develop a proper profitable price is the key concept in business field.

[@garretttaylor2888]

The goal for most firms is to maximise the value of the firm for shareholders and owners. This is a great way to think and base your teams goals off of.

[@HaleyW15]

I can attribute this video to my job at Ferguson Enterprises, a residential/commercial/industrial construction product and service company that covers 8 industries. Several strategies to maximize value are encouraged such as reducing costs to the company by having sales representatives order products directly from a manufacturer rather than from a stocked distribution center. That way there is less handling by the company’s employees and a truck and driver will not have to be utilized. The vendor would ship the product via UPS or through a different courier to the customer, themselves. Primary activities can be observed when managers monitor associate-customer phone call quality or when they request feedback from associated regarding job practices. There are many positions for support activities such as working in the warehouse in logistics, to human resource management, to IT support or oppressions coordination.

[@meredithprince860]

I like to think I'm a fairly good business-minded person and enjoy learning ways for companies to become more profitable in such a competitive market. It makes sense that a company would need to focus on making their product seem more desirable and valuable to the consumer and that they should be concerned with lowering production costs too.

[@amandameyers7654]

I find it interesting that the video mentioned that to increase profitability, you should increase the value. When I think of increasing the value, I think of also increasing the dedication and the more innovation that comes with it. The more valuable something is, I feel that the more important it is, so you are willing to pay more for it. Although not everyone values things at the same level. This is why you must have the value creating process so you can meet that middle ground.

[@jakerhodes6517]

I found this video to be very well organized and thought out. The information presented was easy to understand. Thank you!

[@notnow1165]

This helped me understand how economic principles I learned in principles relate in the complex role internationally.

[@tylercopeland4938]

This is an interesting topic because it is the fundamental concept that drives markets as a whole. This is like a more in depth version of supply and demand, taking into consideration individual prices and breaking down the perspective of each respective party. It is the pulling force that drives circulation in our economy.

[@Jgwwth]

This video was very interesting. I really enjoyed the refresher on consumer surplus. It has been awhile since I've last viewed the material. It makes sense when thinking about some of the things I've purchased and paid less than I was willing to spend.

[@katef9145]

I loved this VIDEO! It helped further my understand how companies can create value, which I will take into consideration in my current job. I must learn how to create that value because we are service industry that is all about customer satisfaction. Loved this video!

[@TimesRollingENT]

I think that is pretty crazy that the production cost of Beats headphones is only 15, yet they sell for hundreds of dollars. The things we do not know about the things we buy. This is very insightful!

[@khadejahjones1473]

A thing that stood out to me in this video is consumer surplus. I remember learning fundamental parts of this video (Support Activities and Primary Activities) in the economic classes I took during my Freshman year at UT Tyler. I always found consumer surplus very cool and a fun bonus for the consumer. One of my favorite examples to use where I've experienced consumer surplus is when I go to Walmart to get gas. I'm prepared to pay the amount of gas that is advertised on the roadside gas station board. But when I get to the pump, the price is usually a few cents cheaper than what is posted. In that instance, the cents I did not have to pay was my consumer surplus. Though it was not much, I still benefited from it. Also, this video helped the average customer appreciate the value that firms offer. It is much more work than one would assume. There is a lot of research and dedication that comes with creating value.

[@jonathanmccowin6495]

This video was interesting because I'm currently experiencing this as I develop my future career. Artists often ask how to create value out of the content that they push on a consistent basis.

[@meganarmstrong342]

The video was super clear and i was able to understand it well. My favorite topic from the video was probably consumer surplus. It will help me a lot in the future to understand it.

[@jackberry8674]

This video did a great job explaining how firms create value. It really goes to show that a company must plan, lead, and have great strategy to be successful.

[@kyanaalvarez2911]

I learned a lot about this video and found many takeaways to be interesting. I liked how the example of Beats headphones were used to explain the average production cost. It gives you a better understanding of the whole process of the production.

[@clairemounce7180]

Rad Video! This video did very well in informing me how managers make the decisions they need to help the growth and value of a firm. In explaining how complicated it can be in finding a way to satisfy the needs of both their consumers and shareholders, which financially can be a very difficult goal to accomplish.

[@pjcotto5133]

This video provided key information about customer surplus and overall was very helpful!! - Felipe Cotto / PJ

[@ChristianJFraser]

You did an amazing job at explaining everything in the video. I had no knowledge of how and why businesses/firms created their value, but thanks to your easy explanation I know why now! This video was very well done.

[@jacquelinegonzalez1026]

I learned about value creation process in economics but this video clearly defined different approaches and strategies I was not fully informed of. for example I was aware of the four major functions of a firms value creation process but I was not aware of supporting activities that are included in the value chain.

[@irielamontoya4376]

I learned from this video that firms need a solid strategy in order to be successful in their business venture which is very interesting and helpful knowledge to me as a business student. I really enjoy watching the Business School 101 videos because they are simple enough to understand within a short time.

[@carsonsouter6356]

The beginning of this chapter I had no idea or knowledge on how businesses created their value. But this video does an amazing job explaining it and showing how it’s done. This video is very well done and super informative

[@cadehollingsworth5021]

I really like this videos. Some of these videos I had know knowledge about and others ones that I had some knowledge about really went into more detail gave me a better understanding.

[@guadalupemorales7983]

As a company creating value for your products is essential. This video gives great information on how and why to do that. Creating value makes it easy to pass the value on to the customer. Once the customer has that same value for the product they become loyal customers sending you more business.

[@ethanhunter5229]

The value creation process is a great playbook for firms to increase revenue and profitability, any future potential business owner would be able to leverage these ideas to scale their own business and become more profitable to potentially beat competition.

[@stirilm2817]

This absolutely essential for anyone planning to do any form of sales. Understanding the value to the consumer to develop a proper profitable price is key. Yet another amazing video that seems so simple but expresses some complicated ideas in such an understandable format.

[@lesliereyes3026]

In this video, I learned what stems from enterprise valuation and how they make a strategy to maximize their company's profits. This video is very helpful to people entering the business world.

[@breannamcgowan7780]

Learning about the Primary and Support Activities within a company was very interesting. These different departments really do depend on each other to ensure the businesses success. It is fascinating to dive into the many checks and balances these firms must face through the different product stages.

[@CorinDanks]

Customer service is a very strong way in creating a value for your business. When you have great connections with your employees as well, word tends to get around and grow your business as a whole.

[@bonniepope7755]

Going into college I was unsure and the term consumer surplus and value creation. Now after watching the video I have a good grasp on the concept. I also learned the 4 major functions of primary activities, as a consumer I have participated in these steps. In the support activities steps information systems is something I was familiar with prior to this course, yet I was given a deeper insight than what I knew.

[@lakeshiapooe5727]

I enjoy learning amazing business strategy on how things are analyzed perfectly. It shows how much work has to be put into a business to create value.

[@jalenhollie1497]

This video was very informative. My favorite thing is the consumer surplus and how it can create value for a customer and make them feel good. I got a good deal on a flight round-trip and was very happy with it and made me wants to purchase more tickets for a future date.

[@EthanSukiennik]

I found it very interesting how companies are able to add perceived value to their products. The fact that beats headphones only cost $15 to produce but sell for more than $100 was crazy to me.

[@katelynballard1683]

These videos always help me grasp concepts easier than any other videos. I am a visual learner and I feel like they are so helpful.

[@hallyepeden1709]

This video explains the firms value creation process very well. It helped me understand more of the background of the firm value creation and how all different companies and department work with each other in helping each other out. The video explains the different elements as primary and secondary and how they wok together for the business to be successful in the business world.

[@Blakeman252]

All things considered, it is interesting to see just how many different ways that firms can create value for themselves. The video did a great job exploring those.

[@explorerofthedeep]

Very useful video for considering what value means, especially comparing and contrasting with different accounting strategies

[@rebeccastanly5478]

I found the valuation process interesting and how businesses work together to create this value. Great Presentation video

[@stephengibel5418]

Learning about value creation is really interesting, especially on how much the company creates value is dependent on the consumer. Also putting value in the product in different ways, such as adding or subtracting features can cause consumers to buy more or less of your product. Right now, I own an iPhone 12, but I’m probably not going to get the brand new iPhone 15 or any in the near future because it doesn’t seem like they are very different than my current phone, so I do not as much value to the new phones because my phone already does everything I need it to do.

[@farrahanderson9295]

The Business 101 videos help me to retain more information through visual learning. I am understanding the lessons more by watching these videos. The examples on some of the videos, such as the flight example, are very helpful, also. I am a business major and the VPC example was very helpful, also.

[@marshahenderson4480]

As an accounting major, the majority of my classes have focused on manufacturing companies. I appreciate that, in this video some time was taken to point out service industry's R&D activities.

[@MaxineDePalma]

I recall learning about value creation in economics class as it relates to prices and supply and demand. This was a very conceptual discussion, so I found it interesting to learn about how firms create value and reduce costs through primary and support activities. It was very helpful to hear about the many ways a company can increase profitability by how they structure their value chain.

[@aydanerkin41]

This video was interesting. It started by saying consumers dictate value of a company and because of that, businesses are able to increase costs even creating a profit. I've always considered that and wondered how that concept actually worked. It was also interesting to see how different aspects of a business have to work together for a company's value.

[@coleteichgraeber2460]

This video was super interesting! I found it very interesting to learn how a firm can add perceived value to the products and services they offer. I was amazed at the cost it takes companies to produce items as opposed to their retail price like the beats from the video.

[@Malc.banks21]

The valuation creation process is an interesting topic. As an accounting major, I have always wanted to dive deeper into this field. Because the goal of a firm is to maximize its shareholder's value. This video shows how all of the different departments in the business work together to creat this value.

[@BusinessSchool101]

Very interesting and valuable input, thanks.

[@alexusmiley3094]

This video was very interesting to me. I have always had the idea that when you are buying something you are paying more than what it cost to make but when I heard about the difference between the average cost it is to make beats vs how much they are selling for I was shocked.

[@user-ym3fo8io3k]

I have heard the term value creation throughout my time in college but hadn't fully grasped the meaning till now. Value creation is measured by the difference in value of a product to the average customer and cost of production per unit. Value creation is such an interesting topic that can be used in every field of work.

[@tayseerali9635]

The value chain diagram stands out as very versatile for other forms of business besides production firms. If there was a service firm for instance: instead of R&D and Production, there may be service workers, specialists, and other active roles. Depending on the organization, there may be a wider or shorter chain, but overall the value chain diagram is universal for mapping an organization's primary and support activities.

[@snehuspatel]

In today’s globalization market, it’s very important for any firm to keep their product up to date and provide best service to survive in the market. One of the local banks started zero-dollar monthly fee for no minimum balance for child saving accounts. The bank send postcard to every single home about the benefit and once the customers open the account, they started sending monthly kids activity postcard where kids can play games such as crossword, Sudoku, mase, and etc. The bank also offers quarterly kids’ activities. This new product and service by bank attract more customers and have increase the value.

[@ethanhernandez15]

Understanding how firms create value is good to know, but I believe focusing on how banks create value could help people understand how they effect the economy. For instance, how the collapse of the the Silicone Valley Bank/Signature Bank/First Republic Bank/Credit Suisse revealed the weakness and faults of modern banking. I recall watching a video for an econ course where they described banks reporting having a higher amount of wealth than they actually do, so when the people or the government come to take out a loan, there is not enough money which causes a run, which in turn closes the bank a la Black Tuesday 1929.

[@fabiomizukai7709]

Thank you very much!

[@willkuczkowski2401]

To maximize shareholder profits, using the firms value creation process is key. If we do not do that then the business can flounder and fall under, it is very crucial.

[@user-mf7sb9iw2j]

By effectively managing each of these elements of the value creation process, a company can create products and services that meet customer needs, generate revenue, and create value for all stakeholders.

[@charlottemounce739]

Value creation process is very similar to creating differentiation in a company's products and services. Companies need to figure out what value they are bringing to consumers that they cannot get from a different company. Essentially, companies need to figure out what they are going to be marketing to their customers and what value they can bring that is not accessible or as easily accessible from another company.

[@jorgemunoz6827]

The value of evrything is all dictated by the consumers. It explains why businesses always strive to make sure that their customers are happy. With a bad image of a business the firms value will drastically drop.

[@jamessawyer2133]

Strategy is a highly important element of any business venture. Firms are incentivized to maximize their own value for their shareholders. I enjoyed learning about the value chain of a firm within this video and how you can categorize different elements as primary or secondary.