But, if another bakery down the road had cakes with value adds, like chocolate cake with a caramel center, or a vanilla cake with cherry cream layers, or angel food that had blueberries baked in, that differentiator might make some waves, if done well. The demand for plain cakes didn't stop existing, but some of it will be siphoned off by the value-add bakery, which has little to no competition because their value add makes their products unique (Plus, they can now charge more).
What are the elements of value-adding in business?
Adding value to an offering involves three elements, and all must be present for work to truly be a value add to the product or service being created or distributed. These are:
- Direct contribution. Direct contribution just means that the company is doing something to directly affect the product. This doesn't include things like paying the janitor or buying snacks for marketing meetings.
- Transformation. The product or service is changed into something that's even more desirable or useful to a customer.
- Consumer perspective. The consumer ultimately decides what items are truly value adds.