Value Migration

What Is Value Migration?

In marketing, value migration describes the flow of economic value from obsolete business models to models better suited to satisfying consumer priorities. Value migration is a type of marketing approach or strategy that focuses on the task of discerning what a customer needs and then developing a new product or adapting an older product that will meet those needs. This approach makes it possible to anticipate changes in the needs and wants of customers and be prepared to meet those needs as they arise. In the process, the company is able to shift or migrate to a newer way of doing business that keeps the operation relevant to what is happening in the market now and in the future. There are several benefits associated with value migration. Gaining and maintaining a competitive advantage is one of the most common advantages arising from using this type of marketing strategy. By constantly thinking of where consumer demands and preferences will move next, it is possible to stay ahead of competitors, sometimes seizing business opportunities and creating a presence before others begin to notice a newly developing avenue to a niche audience. This type of value migration is especially pronounced when a company is able to project the popularity of an emerging technology early on, and adapt its products for use in that new technology. An example would be paper companies who made copy paper in the middle 20th century but envisioned the advent of the desktop computer and home publishing, and adapted their product line to meet those needs before those markets actually began to grow.

What is Value Migration Innovation?

The criticality of value migration in identifying investment opportunities is relatively less understood, in our view. In this report, we study the framework in detail, try to understand its role in driving investment returns, highlight several case studies, and attempt to identify investment-worthy stocks based on this theme. From global viewpoint, value migration has been evident in the Technology (rapid product development, shift towards new technologies), Commodities (low cost production), and Retail (low cost distribution) industries, to name a few. From an Indian perspective, the shift from public sector undertakings (PSUs) to the private sector has been very evident. Value migration from the unorganized to the organized sector as incomes and aspirations rise is underway in several industries. We are also providing contribution margin analysis by well educated experts.

What Are the Types of Value Migration?

Value is interdisciplinary and, in a broader context, is responsible for forming and bonding the expected configuration of the business model. A business model may allow for capturing value or losing it through inconsistency. It can capture value from customers and other stakeholders, such as investors. If a business model is consistent, then stakeholders believe in it and it attracts value. In practice, many business models are volatile, that is, unstable and highly susceptible to many factors, which make them incapable of ensuring success. This issue is an important area of scientific exploration, inasmuch as the issue of the volatility of business models and the associated negative consequences, in particular the migration of value, have been discussed to a limited extent. If you need product bundling then you should contact our top experts.

What Are Three Stages of Value Migration?

The methodological basis of this model is the assumption that at a given point in time a company may be going through one of the three migration stages:

• value inflow
• value stability
• value outflow

It is worth noting that while the inflow and outflow phases are obvious and intuitively comprehensible, the stability phase is a kind of a theoretical construct. The three stages of migration model were derived from the concept of product lifecycle. Companies’ business designs, as well as their products or services, go through lifecycles, from entering a specific market to reaching maturity to leave it, and, in the final phase, to disappearing altogether.

Value Inflow

Net present value (NPV) is a method used to determine the current value of all future cash flows generated by a project, including the initial capital investment. It is widely used in capital budgeting to establish which projects are likely to turn the greatest profit. The formula for NPV varies depending on the number and consistency of future cash flows.

NPV=(1+i) t

Cash flow−initial investmentwhere: i=Required return or discount rate t

=Number of time periods

Stability

Competitive equilibrium with stable market shares and stable profit margins.

Value Outflow

This Value Shift approach and other models can be tools to quickly understand where you and your competition fits within the market spaces you covet and more importantly, help you see the dynamic potential shifts and movements within it. By mapping out the potential shifts, one can then develop several strategies and sometimes tactics that will both counter competitors and compliment your own advancements.

What Are The Benefits Of Value Migration?

Value migrates in the life cycle of business models. The ability to appropriate value in terms of the business model being used is particularly important in terms of management theory and practice. Value appropriation is part of a value migration process, as is value retention. This cycle of the flow of values from the creator to recipient, and subsequently to shareholders, creates a logical system based on traditional economics. In classical economics, a business model is a tool for increasing the value for shareholders. In this approach, the investment attractiveness of business models, which attracts strategic value and capital, is crucial. The logic of value is changing, especially new concepts such as the sharing economy, network economy and, more broadly, digital economy. The classical economy is based on maximizing value for an enterprise, often at the expense of another enterprise, most often a competitor. It is different in the case of a new approach to cooperation between entities, namely the sharing economy. Here, the system of relationships between enterprises is quite different. Sharing between enterprises is defined as cooperation consisting of borrowing unused goods and services that are expected to be shared with other enterprises. It also applies to investing and using goods and services together with another company. Value configuration is most important, both in the context in the classical economy and a network paradigm. What made Uber, Airbnb, eBay, TaskRabbit and all the other sharing-economy companies possible is the combination of Big Data analytics, low-cost cloud storage, the prevalence of social media and the widespread use of mobile devices. In the sharing economy, value proposition should be suited to low-income consumers, which can allow companies to co-create value with consumers.