Final answer:
The key difference between value analysis and value added is that value analysis aims to reduce costs without affecting the desired functions, while value added focuses on enhancing a product's features and its market value.
Step-by-step explanation:
One of the key differences in value analysis and value added is B. Value analysis seeks to reduce cost whereas value added seeks to increase market value. Value analysis involves evaluating a product or service to reduce costs without affecting its functionality, quality, or customer satisfaction. On the other hand, value added refers to the enhancement of a product or service before offering it to customers, aiming to elevate its market value and make it more appealing to consumers. By adding features or improving quality, companies can add value that justifies a higher price point in the market or differentiates the product from its competitors.
Contrary to the other options like cost reduction in value analysis being aimed at bundling components (A) or value added seeking to add quality component only (C), or that value analysis changes the product value while value added seeks to reduce cost (D), the core distinction lies in the objectives of reducing costs for value analysis and increasing the perceived market value for value added.
An understanding of both these concepts is essential for firms looking to optimize profits, as it combines perspectives on cost with an analysis of sales and revenue and fits into the broader context of market structure analysis.