Value and Costs = 'perceived value' (compared to price)higher perceived value and/or lower relative costs'value' should be seen relative to the costs

value for customers: direct and indirectdirect = create value for the customer as soon as they are employes high technology, better service, meaningful brand differentiation, ready availabilityindirect = effective cost control systems - only add value if applied to the price charged to the customer

value of resource must be assessed relative to the resources of competitorsit must serve to distinguish the product

see: the competitive triangle

„The more value customers perceive in a market offering relative to competing offerings, and the lower the costs in producing the value relative to competing producers, the higher the relative performance of the focal company A, compared to competitor B. Hence firms producing offerings with a higher perceived value and/or lower relative costs than competing firms are said to have a competitive advantage in that market. This can be illustrated by the ‘competitive triangle’. There is no one-dimensional measure of competitive advantage, and perceived value (compared to the price) and relative costs have to be assessed simultaneously. Given this two-dimensional nature of competitive advantage it will not always be clear which of the two companies will have a competitive advantage over the other. While the relationship between perceived value, relative costs and performance is rather intricate, we can retain the basic statement that these two variables are the cornerstone of competitive advantage.“