09.03.2021 / 17:01
Value creation is the primary aim of any business entity. Creating value for customers helps sell products and services, while creating value for shareholders, in the form of increases in stock price, insures the future availability of investment capital to fund operations. From a financial perspective, value is said to be created when a business earns revenue that exceeds expenses.
When broadly defined, value creation is increasingly being recognized as a better management goal than strict financial measures of performance, many of which tend to place cost cutting that produces short-term results ahead of investments that enhance long-term competitiveness and growth. As a result, some experts recommend making value creation the first priority for all employees and all company decisions. "If you put value creation first in the right way, your managers will know where and how to grow; they will deploy capital better than your competitors; and they will develop more talent than your competition,".
The first step in achieving an organization-wide focus on value creation is understanding the sources and drivers of value creation within the industry, company, and marketplace. Understanding what creates value will help managers focus capital and talent on the most profitable opportunities for growth.
Although the intangible factors that drive value creation differ by industry, some of the major categories of intangible assets include technology, innovation, intellectual property, alliances, management capabilities, employee relations, customer relations, community relations, and brand value. It is important to note that investments made to enhance intangible assets (research and development, employee training, and brand building, for example) usually provide indirect rather than direct benefits. In this way, focusing on value creation forces an organization to adopt a long-term perspective and align all of its resources toward future goals.
For attracting Azerbaijani youth, the Center for Economic Reforms Analysis and Communication, initiated by the British Council in partnership with the University of Newcastle, invites you to register for the Big IDEA competition.
The competition consists of 4 categories:
• Climate change
• Digital Technology
• Social Impact
• Creativity
Each team has to decide which category they want to enter, depending on their idea.
It is important to register at the link https://creativespark-bigidea.uk/ to participate in the contest.
Extra information on Value creation https://www.youtube.com/watch?v=pIeMO032fPA
