VPC Framework in Management

Balancing between Value, Price, and Cost

I first learned the VPC Framework (VPC: Value-Price-Cost) back in 2006 and the simplicity of the framework made an impression on me. I still revisit a few times a year to think about where our company is in the position within the framework and how we are investing our resources.

The concept is quite simple. Let’s start with the definition:

  • Value: This is the value your offering is creating and delivering to customers.
  • Price: This is the price you charge and customers pay for to acquire or use your offering.
  • Cost: This is the cost of creating and delivering your offering to the customer.

The differences between these elements create the benefits:

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