Value Added – GCSE Business Studies Revision

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  • Value added is the difference between what the company pays for raw materials, and what they sell their products for
  • I’d have trouble buying pieces of gold and selling them for more than I bought them for – I’d have to make them into phone cases or something
  • A business has to buy things and add value to them then sell them and make a profit
  • Like this:
    1) Buy something
    2) Add value
    3) ????????? <– Sell it
    4) PROFIT


  • Value can be added by:
  • Turning raw materials into something useful
  • Making the product appealing to customers
  • Packaging the product in a better way

Water Company

  • Before it can sell bottled water to you, a company has to:
  • Extract the water from the spring, volcano or whatever
  • Purify the water
  • Make the bottle
  • Make the bottle cap
  • Print the label
  • Assemble the bottle
  • Transport everything
  • Advertise its water to get a good brand name
  • All to make a simple bottle of water
  • There are lots of places to add value

Adding Value Using Celebrities

  • Companies use advertising and celebrities to make their brands cool and popular
  • This means people will be willing to pay more for their product than they would for one that isn’t endorsed by a celebrity
  • Thus value has been added!
  • It’s like “We’ll take this screwdriver set and put a singer on it!”
    “Ooh, yes please! I’d pay hundreds!

About Matt

I like writing, filmmaking, programming and gaming, and prefer creating media to consuming it. On the topic of consumption, I'm also a big fan of eating.
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