In the 1980s, Nutrasweet, a division of Monsanto, had a patent on Aspartame, a low-calorie sweetener. Knowing that Nutrasweet’s European patent was set to expire in 1987, the Holland Sweetener Company built what is economic value creation a plant in the Netherlands in 1986. Nutrasweet lowered the price of aspartame from $70 per pound to $22 per pound and entered into long-term contracts with its principal buyers, Coca Cola and Pepsi.
Social entrepreneurship is a phenomenon that affects the economic growth of the country. Higher economic growth leads to a higher rate of employment and better living standards for the people in the society. To understand the impact of social entrepreneurship, this study examined the role of social entrepreneurship on sustainable economic growth and value creation among tour operators in China.
- This study focuses on social entrepreneurship and its impact on innovation, sustainable economic growth, and value creation.
- The incumbent has the choice to accept the prospective entrant as a competitor or modify its conduct (pricing, investments, etc.) so as to deter entry.
- This study adopted a quantitative design and a deductive approach to analyze and examine the proposed hypotheses.
- If the entrant’s cost, CE, is in between (as in Case C), the incumbent chooses a limit price, PI.
Moreover, innovation as a result of social entrepreneurship is also a significant factor that contributes to value creation. Social innovation boosts value creation which in turn improves the living standard of the society. Moreover, the value created by social entrepreneurship is generally in terms of social value. Also, higher sustainability ensures value creation through social entrepreneurship (Bozhikin et al., 2019).
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At the turn of the 20th century in the United States, fears about the growing power of business combinations raised questions that led to more rigorous enforcement of antitrust laws. The Great Depression of the 1930s was another such moment, when prolonged unemployment undermined confidence in the ability of the capitalist system to mobilize resources, leading to a range of new policies in democracies around the world. The classic method that economists use to estimate how much people value an economic good is to look at the price they pay for it.
Customer Satisfaction and Loyalty
Additionally, creating customer journey maps, studying competitors, and employing predictive analytics all contribute to a comprehensive understanding. Social listening and cross-functional collaboration enhance this process further. The integration of data from various sources and the establishment of feedback loops ensure that this understanding remains dynamic and up-to-date. Armed with this knowledge, businesses can tailor their offerings and strategies to deliver exceptional value, ultimately fostering long-term customer loyalty and business success. Value creation definition is at the core of every successful business success.
The first hypothesis (H1) of this study posited that social entrepreneurship has an effect on sustainable economic growth. These results are harmonious with the findings of Palacios-Marqués et al. (2019) who opined that social entrepreneurial activities have been devised to reduce social problems; as a result, it boosts sustainable economic growth. Social entrepreneurs are responsible for developing strategies to mitigate social issues, which helps to accelerate sustainable economic growth.
These aspects are significant for the decision-makers to design procedures to induce innovation (Al-Qudah et al., 2022). First, the study aimed to examine the role of social entrepreneurship on sustainable economic growth and value creation. The findings greatly contribute to the literature on social economics and sustainability because few studies were conducted in this regard.
Studies have argued that policies related to sustainable economic growth accelerate through innovation; as a result, a win-win situation is created for the public and organizations (Hao et al., 2021). Regarding the influence of innovation on economic growth, the policies for the countries are devised to promote innovation so that sustainability can be enhanced. The existing literature also confirms that sustainable economic growth is a complex phenomenon; however, innovation is a critical factor that can accelerate this process (Dauda et al., 2019). Moreover, countries are devising strategies to enhance sustainable economic growth for achieving competitive advantage.
What Is Economic Value?
When an individual buys a good, they give up a given amount of money in return. Thus, the price that a person pays for a good provides one way to quantify the economic value of that good. Economic value is the value that person places on an economic good based on the benefit that they derive from the good. It is often estimated based on the person’s willingness to pay for the good, typically measured in units of currency. The economic value should not be confused with market value, which is the market price for a good or service which can be higher or lower than the economic value that any particular person puts on a good. The event participants raised the point that the majority of the technologies needed to realize this opportunity already exist.
To create, protect and sustain enterprise value, executives must do more—and consider both a diverse set of stakeholders and a broad set of intangible considerations such as resilience, societal changes and ESG opportunities. For businesses looking for innovative growth solutions, it’s no longer enough to focus on financial drivers of value. That’s not to say that business leaders should just dismiss the problem of externalities as unsolvable, or something to be solved on a distant day.
A variety of different consumer experiences often result from one product or service. Online communities allow end-users to share them with one another and exchange perspectives. Because value is so important to a Web site’s success, the topic likely will remain a major https://1investing.in/ focus for online marketers and the customers they serve. In the early 2000s, personalization and the formation of online communities were two other ways companies could create value on their Web sites, although the approaches had not been adopted on large scales.
Dutch Post (PostNL) Value Creation Model Example
The bottom panel in Figure 2 illustrates economic value creation and capture if a small company successfully disrupts the established company. In Christensen’s narrative, technological change plays a critical role. The established company is content in pursuing sustaining (or incremental) innovations whereas the small company experiments with radical (or discontinuous) innovations. When radical innovations are successful, the product’s distinct value proposition begins to appeal to the mass market. At some point, there is a role reversal with the small company at the top and the established company struggling.
This is especially true when it comes to issues affecting people who aren’t immediately involved with the company. A long-term value-creation focus suggests paying wages that are sufficient to attract quality employees and keep them happy and productive and pairing those wages with a range of nonmonetary benefits and rewards. Even companies that have shifted manufacturing of products such as clothing and textiles to low-cost countries with weak labor protection have found that they need to monitor the working conditions of their suppliers or face a consumer backlash. Inevitably, there will also be times when the interests of all of a company’s stakeholders are not complementary. Strategic decisions of all kinds involve myriad trade-offs, and the reality is that the interests of different groups can be at odds with one another. Implicit in the Business Roundtable’s 2019 statement of purpose is concern that business leaders have skewed some of their decisions too much toward the interests of shareholders.
Value Creation Chain (through an Organization)
Similar results were obtained by Méndez-Picazo et al. (2021) who exclaimed that the development of new products, innovation, and search for new opportunities positively impact economic growth which consequently influences value creation. Innovation is a power factor that is influenced by social entrepreneurs and helps to enhance value creation for the country or organization. The mediating role of innovation has been studied from different perspectives.