How are value-added activities characterized?

Value-added activities are characterized by the fact that customers are willing to pay for them. These activities enhance the product or service in a way that provides additional value to the customer, which can lead to a greater willingness to pay a premium. For example, adding features, improving quality, or streamlining services all contribute to greater customer satisfaction and justify increased prices.

In contrast, activities that do not add value are often seen as costs that do not contribute to the end product’s appeal or functionality. Understanding which activities are deemed value-added is crucial for businesses as it allows them to focus on processes that improve their overall service delivery and profitability. As a result, successfully identifying and managing these value-added activities can significantly influence a company's competitiveness in the market.