Value Creation and Value Capture Alignment in the Shift to Open Business Models

David Sjödin, Vinit Parida, Marin Jovanovic, Ivanka Visnjic

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Abstract

This study argues that the shift to open business models relies on aligning value-creation and value-capture activities through interactive processes that involve both provider and customer. Yet, little is known about how such processes unfold. To address these research gaps, this study examines how provider-customer relationships unfold by examining innovation processes for outcome-based services (OBSs). Data from two successful and four failed OBS relationships within the manufacturing and process industry delineates three phases in the shift to open business models – defining value potential, designing value delivery, and delivering value improvements. The success or failure of each phase stems from the alignment between value-creation and value-capture activities specific to that phase, rather than a focus on value creation in one phase and value capture in another. Stated more precisely, the process model shows that the provider and the customer engaged in OBS relationships interplay between: 1) revising the value-creation logic and assessing the value-capture potential, 2) formulating value-creation processes and constructing value-capture mechanisms, and 3) enhancing value-creation activities and regulating value capture. This OBS process model contributes to the literature stream on open business models and servitization by showing that both providers and customers need to be actively involved in managing the dynamic interdependencies and ensure alignment between value-creation and value-capturing activities in the shift to open business models and OBS.
Original languageEnglish
Title of host publicationAcademy of Management Proceedings 2019
EditorsGuclu Atinc
Number of pages1
Place of PublicationBriarcliff Manor, NY
PublisherAcademy of Management
Publication date1 Aug 2019
DOIs
Publication statusPublished - 1 Aug 2019
EventThe Academy of Management Annual Meeting 2019: Understanding the Inclusive Organization - Boston, United States
Duration: 9 Aug 201913 Aug 2019
Conference number: 79
http://aom.org/annualmeeting/

Conference

ConferenceThe Academy of Management Annual Meeting 2019
Number79
CountryUnited States
CityBoston
Period09/08/201913/08/2019
Internet address
SeriesAcademy of Management Proceedings
ISSN2151-6561

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