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Finding the value in your business Te kimi i te uara i tō pakihi

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Your strategy must help you to provide something your customers want, in a way that makes you money. Looking inwards at your business helps you identify where the value is, where the costs are, and which business activities are most critical.

Identifying where your value, costs and activities are

  1. Step01

    Determine the value in your business

    Some activities add more value than others. The value your activities add to your product or service is the difference between the price your customer is willing to pay and the inputs and effort it takes for you to create it.

    If you want to start delivering your products to your customers to add more value, the maximum price you can charge for delivery depends on what your customer is willing to pay. Say your average customer spends $5 to get to your store, the maximum you can charge for delivery is also $5. If you charge anything more, your customer would be better off picking up the product in-store.

    By finding the cost of all your activities, you’ll be able to see where most of your cost comes from. 

  2. Step02

    Find your activities that make or cost money

    To understand the value and cost of each part of your business, you first need to identify all the primary, supporting, unique and valuable activities that go into your products or services. Together, these activities are known as your value chain.

    Once you identify key activities in your value chain, think about the key resources you need to perform those activities better than your competitors. These resources could be finances, staff, skills, physical assets, or even your company culture.

  3. Step03

     Find your key resources

    Your business activities depend on the resources you use to do them. Think about whether each resource is valuable, rare, or hard to imitate. Resources can be physical (such as buildings, equipment or people) or non-physical (such as processes, knowledge or reputation).

  4. Step04

    Improve your bottom line

    Now you can identify your current advantages and possible future advantages. Future advantages might be competing better with other businesses on costs – this will involve finding your cost advantage or creating better products or services that give you an advantage over other businesses – this will involve increasing the value you create.

    Adding value to your product or service can increase your customers’ willingness to pay. This helps you to widen the gap between your costs and the price you charge customers.

  5. Step05

    Get the business on board

    If you decide to make a strategic change, think about how it might affect the rest of the company. You are more likely to get your employees to support change if they feel involved in decisions. 

    Your employees can also help create shared goals. This is part of the reason why giving your employees some responsibility for strategy work can work well.

    Your business’s ability to change depends on these factors:

    • Strategy – the actions a business might take to get a competitive advantage.
    • Structure – the way tasks and people are organised and coordinated within a business.
    • Systems – the formal and informal procedures used to manage a business.
    • Staff – employees and how the organisation recruits, trains, and promotes them.
    • Skills – the abilities of the business and what it does best in each area.
    • Style – the culture of a business, including widely held beliefs and the actions of managers and other leaders.
    • Shared values – things like the business’ vision, mission and values that give employees a sense of purpose.
    Use these steps to write your strategy statement
learning resource

Strategy planning worksheet

Use this worksheet as you work through the steps above. It will help you record all the outcomes of the steps.

Download our strategy planning worksheet

Primary and supporting activities

Your business’s primary activities contribute directly to the products or services you sell. They usually include:

  • inbound logistics – receiving, storing, handling materials
  • operations – building or developing your product or service
  • outbound logistics – distributing your product or service
  • marketing and sales – branding, advertising, promoting, pricing and quoting
  • post-sales service – providing support for your product or service.

Your business’s supporting activities only contribute indirectly to the products or services you sell, but they are still important enough to justify their cost. They include:

  • infrastructure – services like gas, electricity, internet and business banking
  • staff – hiring, training, paying and motivating your people
  • technology – keeping on top of tech to support your business better
  • procurement – getting what you need to produce your product or service.

It can be hard to identify the cost of supporting activities in your business, but it’s still important to analyse them as part of your value chain. As long as you can identify your most important secondary activities, that will be enough to understand your value chain better.

Find your cost and value advantages

To find your cost advantage examine the costs associated with each activity in your business. Explore your competitors’ activities to understand their costs and compare the costs of your competitors’ activities with the costs of the activities in your value chain.

You may not be able to find out exactly what competitors do or what costs they have, but you may be able to see clues that suggest how they do things differently. 

Each activity has a value to your customer that is different to what it costs you in money. Consider how each activity contributes to your customers’ willingness to pay for your product or service and the price you can charge. You can do this by asking customers what they value about your product or service, for example, through a survey.

You can also look at what your competitors do, including how they do things differently to you or to each other, and if they do something better that makes their customers willing to pay more.

Analyse how each activity creates value for customers, and study differences in competitors’ activities to examine why their customers are willing to pay more.

LAST REVIEWED: 12th June 2025

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