Oscar Hilt Tatum IV holds a postgraduate business degree from the University of Oxford’s Said Business School. Also the founder and lead partner at iPoint Capital Partners, Oscar Hilt Tatum IV steers the private equity firm in creating value in its portfolio companies.
Value is what attracts customers to a business and makes stakeholders eager to transact with a business. In many ways, therefore, value is not fixed or tangible but exists in the mindset of the client or stakeholder.
Businesses often seek an understanding of what value means to their customers, then strive to deliver it. Businesses can create value in three ways:
1) Create new value. This requires that a business break into a new sector. Businesses can create new value by going after a new market segment or tapping into a demand for a new product. For example, a business seeking to increase membership can create new value by opening a new category of membership to include vendors who sell in that industry.
2) Create more value. More value is created when the purchase price of a product or service is kept the same but more is delivered, when the purchase price is lowered but the same quality is delivered, or both. Here, the focus is on the quantity - such as added features in a phone or levels in a game.
3) Create better value. As the name implies, better value is based on pre-existing value. However, unlike more value, which focuses on increasing quantity, better value focuses on increasing quality. For example, journals create better value by launching an online forum to encourage discussion, and cleaning companies achieve this end by cleaning apartments beyond competitors’ standards, thus improving the quality of their service.
Hilt Tatum is CEO of Oxford Consulting Group - International business consulting