Value creation per unit is calculated based on three main factors they are:
Price –p and
Cost of production –C.
Value creation is defined in many ways that increases the value of the product produced by a company where consumers or customers are willing to pay more money to the product they are manufacturing. Value creation is in related to competitive advantage as the value creation differs in many ways from company product to product and from industry to industry and it depends on many factors. By focusing more on visibility and centrality; …show more content…
Functional level strategies are those where they are aimed to improve the ability to attain quality, customer responsiveness, superior efficiency and innovation. Distinctive capabilities, organizational competencies, are various factors which can contribute to functional level strategies. Amazon is one of the company where we can take as a best example where amazon started its company to sell audio books online then it started selling music video albums and later on it has been selling almost all the products that are used in a daily routine it has introduced many things in its online to purchase products with one click button, fast delivery with amzon prime etc.
A. Producing large number of quantities of products will reduce the unit cost of the product; economics of scale can be achieved by selling in large number of quantities for lower price. There are number of costs that are kept on the items which are one time like cost of land, manufacturing unit, machinery, cost of labor etc which are one time investment, by increasing the sales of the products that the company is producing that will save cost of …show more content…
Innovation is one of the most important sources of competitive advantage where innovative products or processes give a company advantage. Also developing or creating new innovations more frequently may lead to uncertainty and technology may be compromised.
In order to sustain innovation and make profits we need consider the following
• Products should be designed based on customer needs that can drive the company into success rather than manufacturing the products and customer doesn’t like.
• R&D and marketing should have close communication so that the end product is developed based on the needs and don’t’ need to redevelop again that are missing.
• Development team should be given enough time to research and develop the product that is functioning as expected rather than delivering the product to customer and customer comes back saying it’s not working as expected.
A. Customer relations are important in each and every company because that’s how the company business can be successful in the market. If the end product has not satisfied by the end user the company will be unsuccessful in the market and no one will buy the products from the company. Having good relations with customers will bring in new customers and the current customers have good faith in the company so that if there is any other new product that’s newly introduced by the company so that customers will try to purchase the products with the faith they have in as the company produces trust worthy