To better manage the expectations of business owners and key stakeholders, it is critical to define the dominant value creation strategy at the very beginning of any business modeling exercise.
This creates focus. And focus is one of the most important success factors in business.
The chosen strategy lays the foundation for the business model and sets clear reference points for:
margin profile
key value drivers
performance metrics
Revenue-based strategies
This is the most common type of value creation strategy. Such businesses sell value through:
quality
service
product differentiation
product innovation
brand and advertising
The core focus here is the customer’s willingness to pay and to come back. This strategy works when a company is able to monetize value rather than discounts. Examples:
Apple — design, ecosystem, and superior user experience
Tesla — product innovation and direct-to-consumer sales
Nike — brand, storytelling, and community
Asset-based strategies
Here, the focus shifts to how efficiently a company uses what it already has on its balance sheet.
Key levers include:
fixed assets
working capital
intangible assets
A strong example is Zara, which uses working capital as a strategic advantage (I previously wrote about this in the context of cash management (How Zara, Fortum, and smart CFOs win the liquidity game).
Another illustrative case is the hospitality industry, where value is created either:
through ownership of unique assets (location, building, heritage), or
through excellence in asset management (asset-light models).
An asset-based strategy ultimately answers the question: what makes this business rare and difficult to replicate?
Cost-based strategies
This is not about cost cutting, but about deliberate allocation of resources to areas that generate the highest return.
Key levers include:
R&D
design
production
marketing
distribution
customer touchpoints and support
A classic example is Ryanair, where strict cost discipline is the foundation of the entire business model.
Financial-based strategies
Financial strategy is not always about money. It is about trust, risk, and time.
A company may have a strong product and growing revenues - and still destroy value through:
expensive capital
suboptimal capital structure
poor timing of financial decisions
At the same time, a well-designed financial architecture can multiply value even without operational miracles.
This is why many investment funds demonstrate exemplary:
capital discipline
capital allocation skills
long-term thinking
Financial-based strategies operate at the level where companies with similar operating performance can be valued very differently.
In one investment fund I worked for, one of the key value creation levers was a capital structure designed so that:
ROE was optimal for investors
founder control was maximized
cost of capital was minimized
Capital allocation talent - deciding when to invest or divest, whether to buy growth or build it organically, whether to reinvest or distribute dividends - is particularly valuable in such investment-driven environments.
In my practice, I often see the same pattern: issues with growth and company value almost never start with numbers, but with an unspoken or internally inconsistent strategy. When the strategy is clear, numbers stop being a source of anxiety and start working for the business - not against it.
