Insights on Value Creation

Creating value in large businesses is fundamentally different than creating value for small businesses. In this post, I shed some light on the differences while also giving some insight into similarities in the value chains.


In large businesses value creation is more defined in that the value created for shareholders and customers. In this scenario, value capture which follows value creation, is where the business receives payments from customers through obstructing the efforts of competitors to attract those payments. Value capture is fundamental to profitability and sustainability. Priem (2007) asserted that value is created by offering benefits that prompt payments from inclined consumers. Given this context, businesses of any size require the following of customers to create value:

  • Tendency toward paying for an innovative benefit

  • Tendency toward paying more for a perceived benefit

  • Tendency toward paying less for previously available benefit


Business leaders as well as strategists view value creations as innovation that establishes or enhances the customers perception of the valuation of benefits for consumption. Customer-centric value creation is focused on enhancing ​​the use value and reducing the exchange value to increase the perceived value. For consumers their value perceptions are fluid and not linear, in addition to possibly being created alone or with social (comparative) contexts (Häikiö, Koivumäki, 2016).


Conversely, the consumers value experience is substantially important to a business, as it is the primary method for increasing the payments received from customers. In order to remain ahead of competition, strategists must plan the allocation of available skills and use them in the execution of the strategic plan for the purpose of alignment with the vision of the business.

Here is a video about the slight differences between creating perceived value for consumers and capturing value for providers


Human resources play a significant role in influencing value creation and its imperative that managers organize human capital in a future-oriented manner to absorb future talent shortages as well as build a culture of knowledge sharing within a value driven organization (Ganaie, Haque, 2017).


In small businesses, where resources are limited and competition is hyperactive, business leaders have to be creative in their approaches to value capture and creation. Small business processes are less defined and in some cases more chaotic because the leaders are undergoing continuous learning from their customers. Consequently, business strategies emerge from the “aim-act-learn-adjust” lifecycle, combined with a high level of focus on customer satisfaction. Further, business leaders seeking to develop value creation capabilities with customers, must ensure they exhibit strong ownership of the overall direction of the multifaceted approach to innovation. To explore current capabilities for existing customers and exploit new and emerging capabilities to attract new customers involves risk and ambiguity. Business leaders in small business must also exhibit a high level of orchestration skills to manage the allocation of resources to maximize value creation opportunities (Chew, 2012).