Value Creation
The firm’s value creation is the difference between V (the value of a product to an average consumer) and C (the costs of producing that product) (P = the price that the firm can charge for that product given competitive pressures) 
Profits can be increased by 
Using a differentiation strategy - adding value to a product so that customers are willing to pay more for it 
the higher the value customers place on a firm’s products, the higher the price the firm can charge for those products
Using a low cost strategy - lowering costs