HBR On Strategy

Don’t Just Create Value. Capture It.

Oct 16, 2024

Stefan Michel, a professor of marketing and strategy at IMD Business School, dives into the essentials of not just creating but capturing value in business. He argues that many companies miss the mark by focusing solely on innovation without a strategy to capture that value. Michel shares a framework for defining the value of innovations and highlights real-world examples from companies like Nespresso and Google. He discusses value-based pricing, collaborative strategies, and the need to rethink innovation for enhanced competitive advantage.

13:26

Episode guests

Stefan Michel

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Episode notes

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Quick takeaways

Businesses must not only focus on creating value for customers but also develop strategies to effectively capture that value.

Implementing a value capture framework requires collaboration and ongoing discussions among cross-functional teams to adapt to market changes.

Deep dives

Understanding Value Capture

Many businesses excel at creating value for their customers but struggle with capturing that value effectively. This oversight can stem from a lack of systematic thinking regarding how to leverage the created value. A framework has been developed that categorizes 15 different strategies across five categories to help organizations better define and implement methods for value capture. These categories include changing the price mechanism, altering who pays for the product or service, and adjusting when and how value is communicated to customers.

Intro

2min

Capturing Value in Business Innovations

6min

Optimizing Value-Based Pricing

4min

Collaborative Strategies for Value Capture

2min

Rethinking Innovation for Value Capture

3min

Creating value is table stakes for any business. But is your organization also capturing the value you create?

IMD professor Stefan Michel says that many businesses don’t actually know how. “Many companies spend a lot of time on innovating, in a sense that they create more value for customers,” he argues. “What they often miss is to think about how to capture that value.”

Michel studies marketing and strategy at the Switzerland-based business school. Through his research, he created a framework for defining the value of your innovations.

In this episode, he explains how to apply his framework — whether you’re developing new business ideas or formulating a strategy to compete with a new entrant in your market. He also discusses how value-capture works in the real world — drawing on examples from companies like Nespresso and Google.

Key episode topics include: strategy, innovation, value-based pricing, pricing, value capture, Nespresso, Google, new revenue streams, growth strategy.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

· Listen to the original HBR IdeaCast episode: Focus More on Value Capture (2014)

· Find more episodes of HBR IdeaCast

· Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org

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HBR On Strategy

Don’t Just Create Value. Capture It.

Episode guests

Podcast summary created with Snipd AI

Quick takeaways

Deep dives

Understanding Value Capture

Innovative Examples of Value Capture

Applying the Framework in Business Strategy

Remember Everything You Learn from Podcasts