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Controlling Increased Added Value in SMEs in Developing Countries

Increasing added value is one way to attract and retain clients. Businesses that put value for their products and services frequently find themselves reselling them by higher margins than those that just promote the unprocessed trash used to produce the goods. Adding worth can be as simple as including free shipping or offering a money back guarantee, but can also consist of more intangible benefits just like outstanding customer care.

Creating added value is an important aspect of organization and is an important contributor to economic progress. It permits businesses to compete in markets where competitors may not have the methods or ability to remain competitive on price alone. It might be an important element of a competitive strategy that enables companies to satisfy the demands and expectations of shoppers and generate new marketplace segments.

The challenge for managers in SMEs in developing countries can be to manage increased added value with no increasing the sales selling price or item costs. This is especially difficult in markets where increase in added value triggers a decrease in profit and refinement price grades. To handle this problem the conventional paper presents a model that considers added value, income and development costs.

Additional value of the product is the difference among its value and its total production costs. It includes sales revenue, the price of buying bought-in materials and under one building production costs. Added value is important for competition mainly because it represents the profitability of a business and is an indicator of economic progress.