Value creation

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In 100 words or more respond to statement below about value creation

Business begins with value creation. It is the purpose of the institution: to create and deliver value in an efficient enough way that it will generate profit after cost. Because value creation is the starting point for all businesses, successful or not, it’s a fundamental concept to understand. In the broadest terms possible, value is created through work. This work could be mechanical (cutting a tree down and turning it into lumber) or creative (creating a logo or writing a paper). Of course, not all work is value-creating. The purpose of a business is to create value (through work), sell or trade it to customers, and capture some of that value as profit. As we look at the changes in the way our economy has created value in the past 100 years, we’ve shifted from a focus on huge mechanical production during the industrial revolution to more creative and customized production through the information age. Software and related services dominate more and more of value creation.

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