i). Added value is a value that is added to a product and/or service that makes a product desirable to a customer which translates into what a customer is willing to pay for that product and/or service. At some point then the effects of diminishing return come into play as what price each customer is willing to pay, i.e. Will result in a shrinking market of who are willing to purchase that product and/or service.
Example: The value-added chain for a tomato:
The farmer owns the land
A farmer tills the soil and adds fertile to the soil
The farmer plants the tomato seed
Farmer water the seed/plant
A farmer harvests the ripe tomato and packages it in cases and sells the cases
The price of the cases is dictated by the market, i.e. what the market will tolerate, and the farmer’s cost to produce the cases of tomato.
The farmer sells his whole crop to a wholesaler because the wholesaler has the network and infrastructure to break down and sell the crop in smaller quantities of 1 case to multiple cases depending on the customer which adds value to the customer who only wants one case.
Q1. How can you use social media to add value to a product and/or service if at all?
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ii). Toyota’s Total Quality Management (TQM) Kiazen is based on Deming’s 14 Points and has been instilled in Toyota culture since Toyota’s inception, which is one of the reasons for its success. The key to TQM is that it is part of an organization’s culture to really be optimally effective.
Q2. What is organizational culture?
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