Session 3: Creating value

Introduction

What is meant by a value delivery system and why is this important in starting a new enterprise? It is only by creating something that people are willing to pay for or support that you will make money and be able to sustain your enterprise.

In this session you will start to understand how your business can create value for you through delivering products and services for your customers.

Lanning and Michaels (1988) described a business as a means of delivering value. But for whom? The concept of value is an important one for many reasons and it goes beyond strictly financial meanings of cost or price. For example, sentimental value is nothing to do with financial value, and the price premium we are prepared to pay for an item with an exclusive brand goes beyond the cost of raw materials, and producing and delivering it to the end customer.

By now you should have recognised that all businesses start from an idea or arise from something that people want or need. In this session you will consider different ways of looking at how you can deliver value to users or customers.

By the end of this session, you will be able to:

• create and describe your business model as a foundation for creating value
• identify the kind of dilemmas that entrepreneurs face in setting up their business
• recognise why it is important to remain flexible and willing to adapt and change to be successful.