Added Value. Today… Understand what added value is Understand why added value is used in a...

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Transcript of Added Value. Today… Understand what added value is Understand why added value is used in a...

  • Slide 1
  • Added Value
  • Slide 2
  • Today Understand what added value is Understand why added value is used in a business
  • Slide 3
  • What is Added Value? It is the difference between what a business pays its suppliers, and the price that it is able to charge for the product/service. Materials are bought, business costs are paid (eg suppliers, electricity) Product or service is sold to the customer Something is added
  • Slide 4
  • Sources of Added Value Businesses can add value to their product/service by doing something with the raw materials and providing something different. Task Make a spider diagram with all the different ways you can think of that a business can add value
  • Slide 5
  • Sources of Added Value Think of all the reasons why a business can sell a product or service for more than what they paid for it in the first place. Quality Speed of Service Design Branding Unique Selling Point (USP) Convenience
  • Slide 6
  • Sources of Added Value QualityDesignConvenienceSpeedBranding USP (unique selling Point)
  • Slide 7
  • Example of Added Value Ingredients purchased Ingredients made into a chocolate bar Chocolate bar sold to customers 30p per bar + 20p per bar 1.20p per bar Value Added = 70p per bar of chocolate
  • Slide 8
  • Example of Added Value Ingredients purchased Ingredients made into a meal; caf furnished Meal sold to customers 3 per meal + 6 per meal 15 per meal Value Added = 6 per meal
  • Slide 9
  • Importance of value added Every business must add value to survive and be successful The higher the added value, the more likely it is that a business will survive, grow and be successful in the long term
  • Slide 10
  • Complete the activity ticking the correct column for each statement, is the action adding value?
  • Slide 11
  • Complete the worksheet by showing how the three businesses could add value.
  • Slide 12
  • Jacob Simms is a solo singer who tours the country appearing at concerts and revues. Select ONE answer. The added value of his singing is: A the total cost of putting on the concerts minus the revenue earned from selling tickets B what he makes in fees plus his costs such as petrol and hotels C the total cost of his concerts at which he appears minus what he has to pay to concert hall owners D the revenue he earns minus what he spends
  • Slide 13
  • Jacob Simms is a solo singer who tours the country appearing at concerts and revues. Select ONE answer. The added value of his singing is D the revenue he earns minus what he spends
  • Slide 14
  • Which two of the following might be a source of added value for a farming business? A Quality of products grown on the farm B The wages of the farm workers C The profit earned by the farmer D Speed of delivery from harvesting to the customer E The receipts from the sales of the farm produce
  • Slide 15
  • Which two of the following might be a source of added value for a farming business? A Quality of products grown on the farm D Speed of delivery from harvesting to the customer
  • Slide 16
  • Why is added value important for the survival of a business? Select one answer It is important because. A added value allows a business to target its customers successfully B added value always means a better quality of product C a business that has value added is one that is likely to make enough money to make a profit D all businesses have to have a unique selling point
  • Slide 17
  • Why is added value important for the survival of a business? Select one answer It is important because. C a business that has value added is one that is likely to make enough money to make a profit