VALUE CREATION

Value creation within a business takes place over time and is influenced by the external environment, relationships with stakeholders and various resources. The process is of interest to the organisation itself as well as external parties such as stakeholders and society. The amount that value is created, destroyed or transformed is determined based on the various capitals of a business. The six capitals are: financial, manufactured, intellectual, human, social and relationship and natural. Not all capitals are equally relevant in all organisations. Thus, in the case of Anchor Management, our business model places a strong focus on the natural form of capital – fish.

The essential part of any value creation process is the higher value of outputs in comparison to their inputs. Focusing on the utilisation of fish, the value of the anchovies only increases as it follows the production process from being caught to being processed and packaged. In other words, due to the labour, finance and manufacturing contributions made to bring the anchovies to a ready-to-sell state, they are undoubtedly of a higher value at the end of the process. However, the tinned anchovies are not the only output to come from this process. Negative outputs such as pollution from fishing ships and delivery vehicles, wastage from the processing plant and other emissions destroy value for the entity. 

Key consequences with regards to the natural capital of Anchor Management can be divided into internal and external outcomes. These can be further divided into positive and negative in relation to their overall effect on the value of the business. A strong fishing season will internally improve employee morale (human capital), create bigger profits (financial capital) and better the organisations reputation (intellectual capital). Externally, stakeholder confidence will be boosted with a potential increase in customer satisfaction and brand loyalty (social and relationship capital). However, the very same season can possibly be categorised as overfishing and have a destructive effect with regards to the natural capital and weary environmentalists (social and relationship). Furthermore, this could entail larger tax payments and possible financial penalties, having a greater negative effect on value creation of the business. 

Therefore, it is important to consider the effect of all value creation processes on the relevant capitals and their net effect on the business as a whole. The aim is to achieve more capitals increasing value than those decreasing. The harvesting of fish by Anchor Management is the primary focus of our business model and is thoroughly evaluated to ensure maximum value is created.