Crowdsourcing is a process in which needed services, ideas, or other content is obtained by soliciting contributions from a large group of people (the “crowd”). This group of people may not have any association with the firm as do traditional employees and often form an on-line community. Crowdsourcing is used
As part of a continuing series, we have been investigating the economic tools deployed within an innovation process. You’ll recall that new product development (NPD) is usually managed through a stage-gate process to minimize risk and investment cost. NPD work is done in stages and plans for the next phase of work are reviewed for…
Value creation goes hand in hand with value capture in understanding the economics of new product development and pricing models. While value capture measures the perceived benefits less price paid from the consumer’s viewpoint, value creation includes the profit a firm incurs by adding value to raw materials to sell
Value capture refers to the perceived value that a customer receives from the benefits of using a new product or service relative to the price that he or she pays for the product or service. Value capture is defined as the consumer surplus, or as Value Captured = Benefit – Price.