Competing by adding value

Do businesses compete by adding value?

Businesses that add a lot of value are half as likely to have to compete on price as businesses that rely on their core product or service.

The more a business adds value, the more confident it is about dealing with competition. Only 12% of businesses that add a lot of value compete on price. That compares to 23% of businesses that don’t add value.

Those who add a lot of value are also more likely to compete on innovation – 11% do so, compared to only 5% of those who don’t add value.

Overall, 77% of businesses see added value as a key competitive tool, but only 7% say it’s the most important one for them.

There is also evidence of a link between competing on added value and growing fast: 22% of businesses who say they compete mainly on added value also say they’ve grown rapidly this year. That compares to 14% of businesses overall.

Also, businesses that add value and use design as well are less likely to feel threatened by UK competition. Only 18% of those that add value and appreciate design see the threat as high, compared to 40% who add value but don’t appreciate design as much.

Using design as a strategic business tool can help businesses to enhance their core offer. The Design Council has a bank of case studies which demonstrate the impact that design can have on business performance.

For more on the benefits of adding value, see Adding value through design.