Creating value is not enough …

You need also to capture some of the value you create.

Value creation is defined as the perceived benefit to the customer.

For a B2C business, it could be an offering that enhances the quality of the customer’s life.

For B2B business, it could be an increase in profitability.

Offering a useful product or service alone is not sufficient.

The pricing and cost structures will have to accommodate sufficient value capturing.

Your company could create a lot of value without becoming valuable itself.

This means that even very big businesses can be bad businesses.

Example the U.S airline companies : Serve millions of passengers, create a hundred billion dollars value each year, but in 2012 the airline made only 37 cents per passengers trip.

Google in the other side, creates less value but captures more value.

Google brought 50 billions dollars in 2012, but it kept 21% of those as a margin profits — more than 100 times the airline industry’s profit margin that year.

The airlines compete with each other, but google stands alone, google is a monopoly business.

The dynamics between these two strategic imperatives (create value and capture value) for achieving sustainable success for any company is critical.

If you want to create and capture lasting value, don’t build an undifferentiated commodity business. Be different, stand alone and build a monopoly.

All good companies are different: Each one earns a monopoly by solving a unique problem. All failed companies are the same: they failed to escape competition.