Value Creation and Capture: Competitive Strategy

This note introduces the basic concepts of value creation and value capture, which are used as the building blocks for many other concepts, tools, and frameworks in Competitive Strategy. Defining these concepts allows us to think and talk more precisely about Competitive Strategy. They also allow us to make progress in our understanding of what strategies might actually work, and which are doomed to fail. In this note, we will also define some other concepts such as value creation strategies, willingness to pay, and the productivity frontier.