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Well its a matter of prospective. Value for a shareholder is usually the opposite of value as a consumer. You also have to remember the subscription model that
by mox1 10y ago
Well its a matter of prospective. Value for a shareholder is usually the opposite of value as a consumer.
You also have to remember the subscription model that these razors run under. Gillette will happily give you a shaving handle + 1-2 cartridges for free, the theory being you are then locked into their system. Thus "value" is created for them, on expectations of future revenue.
- klodolph 10y agoI think that we are confusing two different things here—the creation of new value (making a razor) and the transfer of value from one person to another (paying money). Both are value, but only one is the creation of value. Gillette creates value by making razor blades, their lock-in is a technique to ensure that more value (in cash) is transferred to them in exchange for the value that they have (razors). So value is not created for Gillette, but existing value is transferred to them.
- smallnamespace 10y agoAnother way to look at it is that the razor blades are not valuable in and of themselves, only when they are put in the hands of the consumer and used. Gillette has not 'created value' when it made a razor blade, only created the potential for value which is then crystallized when a consumer buys the item with the intent to use it. Similarly, a consumer who buys a razor blade has not created value at the time of transaction, but actually accrues value over time as it is used.