IMD professor Stefan Michel says that many businesses don’t actually know how. “Many companies spend a lot of time on innovating, in a sense that they create more value for customers,” he argues. “What they often miss is to think about how to capture that value.”

Michel studies marketing and strategy at the Switzerland-based business school. Through his research, he created a framework for defining the value of your innovations.

In this episode, he explains how to apply his framework — whether you’re developing new business ideas or formulating a strategy to compete with a new entrant in your market. He also discusses how value-capture works in the real world — drawing on examples from companies like Nespresso and Google.

Key episode topics include: strategy, innovation, value-based pricing, pricing, value capture, Nespresso, Google, new revenue streams, growth strategy.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.