Value Appropriation within a Business Network

Chris Ellegaard, Jens Geersbro, Chris Medlin

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This paper explores the interplay between value creation and appropriation of value by firms within a business network context. These two value processes are inter-linked. Collectively firms create a product of value to an end consumer and a part of that value is appropriated by each firm in the network. Value appropriation is composed of a number of different negotiation processes, value and cost moving between exchange parties and price making and taking spread across time. Value appropriation is a process. Value appropriation is important to a firm’s survival. Firms that appropriate a greater proportion of the value captured by the network, relative to their resource base and costs, will be more profitable. These firms are able to invest in new technologies, resources and business relationships to continually develop their network positions. Value creation in a business network is a result of individual firm efforts, either independently or in relationships. Equally, firms work alone and in groups to appropriate value. Understanding the dynamics and linkages between value creation and appropriation allows a better understanding of how value is created by business firms and by value nets. In the final sections of the paper we present propositions for further research and make recommendations for managers.
Original languageEnglish
Publication date2010
Number of pages17
Publication statusPublished - 2010
EventThe 4th IMP Conference in Asia - Kuala Lumpur, Malaysia
Duration: 6 Dec 20099 Dec 2009
Conference number: 4


ConferenceThe 4th IMP Conference in Asia
CityKuala Lumpur


  • Value appropriation
  • Value creation
  • Business relationship
  • Network

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