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7 Types of Value Creation

 , April 28, 2017
Value creation is an activity that produces a benefit to people. It is the basis of all economic activity with the exception of rent seeking. It is common for businesses to view strategies, processes, practices, technologies, products and services in terms of value creation. For example, looking at the value difference between process inputs and outputs. The following are basic types of value creation.

Information

Information that is actionable, timely, accurate and credible has value. For example, an accurate weather forecast allows people to plan their weekend. Meaningful knowledge that isn't timely or actionable can also have significant value.

Needs

Functions and features that fulfill customer needs. Customer needs are based on the subjective evaluations of customers. They include both basic physical needs such as food and desired items such as diamonds.

Experiences

Intangible benefits such as an activity that is enjoyable.

Objectives & Goals

Processes and practices that achieve objectives and goals. For example, studying may achieve an objective such as passing a test. This may be related to a goal such as graduating with a degree.

Reliability

Products and services that work as expected in a wide range of conditions over time. For example, a bicycle might work reliably with minor maintenance for more than 5 years.

Quality of Life

The things that make communities happy, healthy, fulfilled, peaceful and prosperous such as a clean environment, quality education and adequate healthcare.

Risk

Things that reduce risks such as safety features.
Overview: Value Creation
TypeBusiness Models
Economics
DefinitionAn activity that benefits people.
Related ConceptsBusiness Models
Quality
Reliability Engineering
Customer Experience
Product Development
Rent Seeking
Customer Needs
Quality of Life
Knowledge

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