Value creation (firm's view) and value capture (customer perspective) for new product development.

1. Idea Insights from GNPS
Value Creation and Value
Capture in NPD
Episode 15-16
www.globalnpsolutions.com/idea-incubator/
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2. Idea Insights from GNPS
New Product Development
• Companies conduct NPD projects to:
• Increase market share
• Grow revenues
• Improve capabilities
• New products provide value to:
• Consumer (value capture)
• Manufacturer (value creation)
www.globalnpsolutions.com/idea-incubator/
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3. Idea Insights from GNPS
Value Capture
• Value capture
• Also called consumer surplus
• Difference between perceived value and price paid
• Customers want to maximize value captured
• Consumer wants to pay as little as possible
• Producer wants customer to pay as close to reservation price as
possible
www.globalnpsolutions.com/idea-incubator/
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4. Idea Insights from GNPS
Value Creation
• Pricing model
• Price too high, customers leave
• Price too low, potential profit decay
• Hard, accounting numbers
• Value creation = price – cost
• Value creation may be greater than, equal to, or less than
customer value capture
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5. Idea Insights from GNPS
Business Models
• Three elements to a business model:
1. Customer value proposition (value capture)
2. Profit formula (value creation)
3. Key capabilities (value creation)
• XXX
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6. Idea Insights from GNPS
For More Information
• See the full post at the Idea Incubator Blog
• www.globalnpsolutions.com/idea-incubator/
• Free registration
• Contact me!
• 1-281-280-8717
• info@globalnpsolutions.com
• 2323 Clear Lake City Blvd., #180-177
Houston, TX 77062
www.globalnpsolutions.com/idea-incubator/
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