Learn more about strategy with this collection
Why happiness is the ultimate goal
The importance of creating value
How to create wealth in the modern era
Strategy is simple
A strategy is a plan to create value. Value for customers, value for employees, value for suppliers. It is planning for the future.
Strategy doesn't begin with a focus on profit. Financials, profitability, return on investor capital is the result of strategy. It is not the starting point.
28
418 reads
Value explained
Value is the difference between a willingness to pay and a willingness to sell. This can be shown with a value stick.
- At the top, we have a willingness to pay.
- At the bottom, we have a willingness to sell.
The difference between the two is the value the company creates.
The value is split in three ways:
- Some go to customers. (The difference between willingness to pay and price.)
- Some go to employees (the difference between willingness to sell and compensation.)
- The middle wedge is the margin of the company.
31
174 reads
How to create more value
We can create more value in two ways.
- By increasing the willingness to pay. It describes the customers. It's the most a customer would ever pay for a product or service. Value can be created by focusing on "customer delight".
- By decreasing the willingness to sell. It is the least amount of compensation an employee would accept and still work for this particular company. ]t is a measure of the quality between what someone is looking for in work and what a company can offer.
27
118 reads
Ways to raise willingness to pay
- Product quality. The higher the quality, the more appealing the service, the higher the willingness to pay.
- Product complements. A compliment is a product or service that supports willingness to pay. For example, razor and razor blades, or printer and printer cartridges.
- Network effects. The more popular the product, the more widespread its adoption, the greater my willingness to pay.
27
111 reads
How to lower willingness to sell
Two ways to be more attractive in the market for talent:
- Pay more money. When you pay more money, you will be more competitive in the marketplace for talent.
- Make the job a better job. Create more attractive working conditions, for example, better training plan, more generous promotion rules, working some days from home.
27
117 reads
IDEAS CURATED BY
Other curated ideas on this topic:
6 ideas
What Makes a Great Leader?
Harvard Business Review
8 ideas
6 Ways to Look More Confident During a Presentation
Harvard Business Review
4 ideas
What Having a "Growth Mindset" Actually Means
Harvard Business Review
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Personalized microlearning
—
100+ Learning Journeys
—
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates