Value Potentials in Innovation, Resources, Strategic Networks and Blocks

Abstract

The present globalizing world of business has been witnessing the emergence of unprecedented kinds of markets. These new kinds of markets post significant challenges to the world of learning and decision-making managers, entrepreneurs and alike. To confront these challenges, this paper investigates the potentials of value creation and value capture at the firm level from different perspectives. By employing systems methodology and the logical reasoning that parallels the one commonly used in mathematics and natural science, this paper establishes 16 formal propositions on value creation and value capture from the respective perspectives of market competition, innovation, resource, inter-organizational network, and direct association of sellers and buyers. In particular, this work points out (1) when innovation provides additional potentials for value creation; (2) when resources’ latent values can be practically made visible through value creation; (3) how markets’ mutual forbearance and relatively sustainably increased profitability are positively related, (4) why a firm’s systemic hole position offers advantages and profitability to the firm, (5) how a firm’s profitability is positively affected by its membership in a strategic block of increasing market influence; and (6) when a firm creates and maintains convenient platforms it will readily create and capture values. This paper concludes with some practically reliable general recommendations and a few topics and directions for future research.