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Econ: How Do Companies Add Value? 1 Views


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Description:

How Do Companies Add Value? Companies add value by improving the client or customer experience. This can be achieved by offering better quality services and goods, speedier deliveries, offering customized advice, simplifying communications and interactions, and better flexibility with substitutions and returns.

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Transcript

00:00

And finance Allah shmoop How do companies add value All

00:07

right people think about the way people improve things Give

00:10

him you know that little extra Take ice cream Ice

00:13

cream is good but a Sunday is better The ice

00:17

cream palace charges four dollars fifty cents for two scoops

00:20

of ice cream but take those same two scoops and

00:22

add whipped cream chocolate sauce A handful of knots Bunch

00:25

colored sprinkles plunk a cherry on top Now they can

00:28

charge seven dollars fifty cents rights three dollars more Why

00:31

while they added value the whipped cream chocolate and sprinkles

00:35

make the tree way more special If Little Billy doesn't

00:37

get his sprinkles or his cherry on top well he's

00:40

going to throw a fit He's going to cry and

00:42

stomp his feet and generally make more than three dollars

00:45

of misery for his parents They might not think the

00:48

extra three bucks worth the stuff is worth the three

00:51

additional dollars it takes to turn ice cream into a

00:54

Sunday there But they definitely think it through the day

00:56

without a temper tantrum is worth those three bucks so

00:58

they fork over the money and it's likely all those

01:01

extra toppings cost the ice cream servers way less than

01:05

three dollars It was ah high margin product costume maybe

01:08

twenty five cents Fifty Send something like that huge contribution

01:11

of profits when they add on those three bucks worth

01:13

of stuff Okay next up What about water Well water

01:17

is fine It's cheap It keeps you alive But give

01:20

it that little extra and water becomes a health hydration

01:24

beverage Take water from the tap basically free Now add

01:27

some vitamin C powder Mix in some artificial blueberry flavor

01:32

and a little coloring Put it all in a bottle

01:34

and then slap a label on it Now you've got

01:36

Big Paul's bonus Health Hydration Beverage Five dollars seventy five

01:40

cents for a twelve ounce bottle Big value added big

01:43

profit margin to the cellar Well the concept of value

01:46

added describes the amount you increase the utility or the

01:49

quality or the value of a product to the buyer

01:52

through whatever process you deploy you get a product or

01:55

some raw materials You do something to it It gets

01:58

more useful or at least it gets generally better In

02:01

some way you've added value to it Turn warm secretions

02:05

into silk turns Silk thread in the fabric Turn silk

02:09

fabric into sheets You silk sheets to help give the

02:12

honeymoon suite at the Paluch a Ville Interstate Motel six

02:16

Cinderella Lodge It's special charm adding value all the way

02:20

at a back flap Toe prospector underwear There we go

02:23

Put satellite radio in your car Gee that's a good

02:26

one Add color to an old movie Good turn Pig

02:30

snouts and pigeon spleens in tow Hot dog Dodger Dogs

02:34

Put a bow on a puppy All value added situations

02:38

Or send Billy to stay with his grand parents for

02:40

the weekend so they can deal with his ice cream

02:43

addiction for a couple of days You know good luck

02:45

with that Definitely something his parents would consider value added

02:49

grandparenting Yeah can

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