Value innovation is created in the region where a company’s actions favorably affect both its cost structure and its value proposition to buyers. Cost savings are made by eliminating and reducing the factors an industry competes on.
Buyer value is lifted by raising and creating elements the industry has never offered. Over time, cost are reduced further as scale economies kick in due to the high sales volumes that superior value generates.
Value innovation is more than innovation. It is about strategy that embraces the entire system of a company’s activities. It requires companies to orient the whole system towards achieving a leap in value for both buyers and themselves
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