Added value

• The transformation process takes inputs and turns them into outputs
• Every business has a transformation process
• The aim of the transformation process is to create more value
• What are some examples of inputs in the transformation process for a hairdresser?

  Time, wages, equipment
• Understanding customer requests is a way for a hairdresser to add value during the transformation process
• Delivering good customer service is an intangible way for a hairdresser to add value
• Steps in the pizza-making transformation process

  1️⃣ Process ingredients

  2️⃣ Use skilled labor

  3️⃣ Create consistent quality

  4️⃣ Branding and packaging
• What is added value calculated as?

  Sales revenue minus input costs
• If a business sells 1,000 units for £20 each and input costs are £5,000, the added value is £15,000
• Building a brand can enable a business to charge higher prices and add more value
• What is one way to add value in a product-based business?

  Higher quality features
• Operating efficiently lowers unit costs, enabling a business to add more value
• Supermarket pizzas are cheaper than branded pizza delivery services because they add value differently
• Branded pizza delivery services add value by creating a branded experience
• What is the role of automation in pizza manufacturing?

  Efficiency and quality