Quote by Peter Drucker

Value added is a meaningless concept for a retail business, for a bank, for a life insurance company, and for any other business which is not primarily engaged in manufacturing.

Value added is a meaningless concept for a retail business,

Summary

This quote suggests that the notion of "value added" is irrelevant for businesses in sectors like retail, banking, and life insurance, where manufacturing is not the central focus. Unlike manufacturing industries that involve transforming raw materials into finished goods, these businesses focus on providing services and financial products rather than physical outputs. Therefore, determining the value added by these non-manufacturing businesses becomes complex and subjective, with no tangible products to evaluate.

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By Peter Drucker

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