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Define capture4/15/2023 Maximization (the approach taught in most business schools) means that business should attempt to capture as much value as possible. There are two dominant philosophies behind value capture: maximization and minimization. Movies are great, but would you pay $5,000 for two hours of entertainment? Capture too much, and your prospects won't bother purchasing from you. The more value you capture, the less attractive your offer becomes. People buy because they believe they're getting more value in the Transaction than they're spending. In order to be successful, you need to capture enough value to make your investment of time and energy worthwhile, but not so much that there's no reason for your customers to do business with you. If you're able to offer another business something that will allow them to bring in $1 million of additional revenue and you charge $100,000, you're capturing 10% of the value created by the transaction. Value Capture is the process of retaining some percentage of the value provided in every Transaction. If it doesn't, the business will have a difficult time generating enough resources over time to continue operation. Josh Kaufman Explains 'Value Capture'Įvery business must capture some percentage of the value it creates in the form of revenue as Profit. Create as much value as you can, so your captured value is worth it. An organization should capture as little value as possible, as long as it remains Sufficient.Īs long as you bring enough to cover your needs, there's no need to capture every cent. An organization should try to capture as much value as possible. There are two major approaches to Value Capture:
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