Value Creation Process Innovation, Renovation and Continuous Improvement

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Back to the core: what is value and how do firms create value? Simply put, anything that offers benefit is value and different firms are the sources of different value. For instance firms like Intel, GSK, and Boeing create value on technology, research and engineering dimensions. If one looks at Dell, Indigo or Flipkart their “corporate DNA” relies on efficiency and speed as the Latest Mailing Database major determinants of value. Other firms like Coke, Microsoft Windows, Google and Porsche rely on customer experience, aspiration and sheer hedonistic brand appeal as value drivers in the marketplace – even though each of them spends loads of money on R&D. Some firms are endowed with the ability to perform on several dimensions. Apple is known for its aesthetic capabilities (designed in California), works with Foxconn ,the world's biggest contract manufacturer (Made in Taiwan), is focused on efficiency; and known for its expertise in managing customer experience and mastery over branding See Figure

2). Screen Shot 2016-04-16 at 5.52.08 PM Here the value creation is due to innovation on all three dimensions; renovation and integration brought together in one firm Apple. Samsung adept at semiconductors and display technology integration as well as integration of customer-facing process (design, supply-chain and marketing) integrations. It is another firm that has excelled on several dimensions keeping cash registers pleasantly ringing across global markets. Lesson to note here is; a firm could attain exemplary performance if it strives to excel on all dimensions through consistent innovations. This increases hurdles that competitors have to clear to gain competitive advantage and therefore creates market positions that are more sustainable. Of course, companies need to maintain leadership in geographical markets.While Apple dominates in the West, Samsung has been able to hold on to Asian markets. Lesson 2: Create Future Value However, it appears everything does not always go in favour of Apple. During early second half of 2013, even though its operating income went up, the stock value of Apple came down.

In the same period, Google had registered positive growth on both the metrics. At a broad level both the firms differ on product portfolio – one is a hard product based firm (i-Phone, i-Pad) and the other predominantly is a software Android) and service based firm search, ads. They both compete on OS.This seems to be a replay of the story in the mid-1990's where it was Apple Mac) versus Wintel and a very large number of PC manufacturers and hardware partners winning the war. Can Apple withstand attacks from Android and handset partners? Perhaps another weakness of Apple is over-reliance on i-Phone as a value-generator while Google is diversified across multiple markets. In any case, the valuation charts and ratios of both the firms have a different story to reveal See Figure 3.the valuation charts and ratios of both the firms have a different story to reveal (See Figure 3.the valuation charts and ratios of both the firms have a different story to reveal See Figure 3.