THE SECRET TO SUSTAINING A BUSINESS

- Corrina Marieanne

Why do people buy iPhones? In the everlasting battle between Apple and Android, one
thing has been established. The hype and brand power that Apple has over Android phone
manufacturers is one of the big (if not the main) reasons behind its continuing popularity.
But why? Android phones are more flexible and functional. What is it that Apple brings to
its customers that drives its popularity? That thing is value. I’m not talking about value
for money, although I'm sure that many will come to defend that too. I’m talking about the
feeling of satisfaction that their customers get with an Apple product. Like it’s worth it.
They have worked hard at making their customers happy. This process or action of giving
satisfaction is called value creation.
Value creation can be thought of as a three-pronged fork with a twist. Each of them needs
the other two to stay up. The middle prong is the customer, the other two are the
employees of your venture and the stakeholders. Obviously, if you create value for your
customers, it’ll convert into sales and revenue for your company. But you can’t generate
value for your customers without your team. Create value for your employees and they’ll
reciprocate. You can’t deliver excellent products and services without your employees’
dedication, talent, hard work and creativity. If you don’t create value for them they will feel
as if they have no reason to contribute and this can have adverse effects on you and your
venture.
The third and equally vital prong are the stakeholders or investors. For them, value
creation implies providing steady returns on their investment. This involves both revenue
growth and impressive profit margins, resulting in growth in the entity's stock price, thus
guaranteeing the inflow of capital to provide finance for operations. This happens when the
customers buy products/services.

"Traditional methods of assessing organizational performance are no longer adequate in
today's economy," according to ValueBasedManagement.net. "Stock price is less and less
determined by earnings or asset base. Value creation in today's companies is
increasingly represented in the intangible drivers like innovation, people, ideas, and
brand."

In strictly financial terms, value creation occurs when an enterprise's profits exceed its
expenses. However, in a broader context, value creation is identified as actions that not
only increase the worth of a company's products and/or services, but also its business,
consequently creating distinguished market value for the brand. Value creation has started
becoming a better management goal than financial performance. Financial goals place
greater importance at cost-cutting and short-term goals for investments made. Value
creation, on the other hand, aims at sustaining growth in the long term and keeping up
with the competition.
Creating value is a better vision-driver than the narrow approach of traditional success as
it does not limit the company to actions that may prove harmful in the future and will be
difficult to undo or reverse. Traditional methods also set up a mindset of limited or small

dreams which will constrict the flow of innovation and ideas. Thus, value creation is a new
way of doing business which proves to be more sustainable in the long run.