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Social Media Assignment Value Creation
12 Pages2951 Words121 Views
Added on 2020-05-08
Social Media Assignment Value Creation
Added on 2020-05-08
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Running head: VALUE CREATIONValue CreationName of the StudentName of the UniversityAuthor’s note
1VALUE CREATIONTable of ContentsIntroduction......................................................................................................................................2Literature Review............................................................................................................................2Theoretical background............................................................................................................2Value Creation..........................................................................................................................3Value Creation Spheres............................................................................................................5Impact of Social Media in Value Creation...............................................................................5Value Outcomes.......................................................................................................................7Value Creation and Competitive Advantage............................................................................7Conclusion.......................................................................................................................................8References........................................................................................................................................9
2VALUE CREATIONIntroduction The primary objective of a business organization is to create value for the customers.Value creation helps the organization to sell products as well as services to the customers andcreate value for the shareholders (Austin and Seitanidi 2012). It creates value for theshareholders as the price of the stock increases and insures future availability of capital in orderto help in the funding of operations. According to financial perspective, a business is said tocreate value by earning revenue over its expenses. This is considered to be a traditional concept.This traditional concept is no longer valid in the present generation. Value creation in the presentgeneration is based on intangible drivers such as people, idea, brand and innovation. This report discusses about the concept of value creation in details by analyzing literaturereviews. It critically analyzes the theoretical background of the concept of value and gives aproper description of value creation. It gives an overview of the value creation spheres. Itdiscusses about the roles played by the service providers and customers in creating value. Thisreport also discusses how brand communities on social media will help in creating value. Thisreport explains the process of value creation along with value outcomes. Literature ReviewTheoretical backgroundAccording to Gronroos and Voima (2013), value is considered to be an elusive concept.In the recent times, the concept of value has become more experimental. Value creation can beconsidered to be a process that aims at increasing the well being of the customers. According toStandvik, Holmlund and Edvardsson (2012), independent services and products do not create
3VALUE CREATIONvalue for the customers. There can be incidents where the products that are sold by the companyhave good quality and features. But the service providers do not behave in a proper manner. Inthis type of situation value is not created. Interrelationship between products and servicesdetermine the value that is created. Customers do not simply focus on the economic andfunctional benefits. They also focus on other dimensions like social, emotional, environmentaland ethical dimensions. Laroche et al. (2012), social networking websites can be used forcreating brand community that will play a positive role in creating values for the customers.According to Acharya et al. (2012), LBOs or leveraged buyouts have the ability to create valuethrough powerful incentives and high leverage. Gummerus (2013) explained the value can becreated by gaining competitive advantage. Innovation plays a significant role in creating valuefor the customers (Chemmanur, Loutskina and Tian 2014). Innovation helps organizations togain competitive advantage and economic growth over a long period. Value CreationValue can be created by the combined actions of the customer as well as the serviceprovider (Gronroos and Voima 2013). Earlier only product oriented dimensions were consideredfor creating value. In the present times, service oriented dimensions are also given importance.Value is said to be created during the period of usage. The process of value creation bycustomers is non linear. Customers have the ability to create value in the brand communities byusing four processes (Laroche et al. 2012). These four processes are social networking,community engagement, impression management and use of brand. The brand of thecommunities plays a significant role in creating value. Businesses aim to create value and delivervalue in an effective manner so that this value will help in generating profit after the cost. Valueis said to be created through a process that is irreversible in nature. There are several ways to
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