Value Capture Research Articles

Competing with Theories: Using Awareness and Confidence to Secure Resources and Rents

An assumption of factor market efficiency is often used to grant primacy to firms’ existing unique and valuable resources as the source of economic rents. But this assumption is difficult to reconcile with observed market outcomes. For instance, five of the six companies with the highest global market capitalization in 2022 were upstarts in their industries with few resources at their origins. More surprising, three of these entrants were assisted by incumbents with vastly superior resources in assembling the resources they required. In this paper we explore how entrants compete with theories to secure resources from incumbents and capture rents. We introduce a modeling approach in which theories with causal logic generate awareness of valuable potential future states and shape the beliefs about payoffs and probabilities associated with these states. We combine work in the theory-based view and value capture theory to distinguish among three distinct sources of economic rents that are potentially available to entrants: awareness rents, confidence rents, and resource rents. We explore the circumstances under which these three types of rents are available. By exploring the role of theories and awareness in value creation and capture, our paper seeks to deepen our understanding of how entrants both attract resources and secure rents.

Leveraging Six Values for Company Performance: Adaptation of Sustainable Business Model Innovation Strategies in Chinese Electric Vehicle Brand Enterprises

Business model innovation is crucial for enhancing company performance. This study aims to investigate the relationship between the six dimensions of sustainable business model innovation and company performance among Chinese electric vehicle brands. A structural equation model is constructed based on a comprehensive literature review and hypothesis development. Using PLS-SEM, this study empirically analyzes questionnaire data collected from the top 12 electric vehicle brands in China to explore the relationship between these six core dimensions and company performance. The results indicate that innovation in “value proposition to customers”, value creation, value delivery, and “value of residual” have a significantly positive impact on the performance of Chinese electric vehicle brands. However, value capture innovation and “value of after-sales service” innovation were not found to be statistically significant. This paper provides an in-depth analysis of the mechanism through which sustainable business model innovation impacts company performance, enriching the theoretical foundation of academic research in this field and broadening its practical applications in management.

Military conflicts and the performance of state-owned enterprises: a study of Ukraine’s aerospace, defense, and electro-engineering industries before and after the 2014 Crimea and Donbas occupation

Abstract This study addresses the under-researched role of state-owned-enterprises (SOEs) in global value chains/production networks (GVCs/GPNs). It examines how the economic performance, foreign trade, and value capture of Ukrainian firms – classified by ownership, position in GVCs/GPNs, size, and diversification of their customer base – have evolved following the Russia’s occupation of Crimea and parts of Donbas in 2014. The study reveals significant differences in the distribution of SOEs, private, and foreign enterprises between the aerospace/defence and electro-engineering industries. Overall, since the Russian aggression in 2014, the aerospace and defence industries have outperformed electro-engineering firms, largely due to strong state support. The study concludes with broader observations that while even intensive mutual trade could not prevent the war, the war does not necessarily lead to a complete cessation of mutual trade.

Value capture for nonprofits. The case of museums’ new business models

Utilizing a framework of innovation categories adapted from the private sector, this article sheds light on both the creation and capture of consumer value within the context of nonprofit organizations, specifically museums. With government budget cuts increasingly straining museums’ core resources, there is an urgent need to reassess their traditional business models. While museums have historically focused on innovation for value creation, opportunities for value capture remain underexplored. This study aims to elucidate the opportunities and constraints surrounding the evolution of nonprofit business strategies, offering insights into how museums can navigate the challenges posed by shrinking resources. By encouraging a shift toward unconventional thinking, we propose that nonprofits can discover new pathways to sustainability and resilience in the face of financial adversity.

Pivoting B2B Platform Business Models: From Platform Experimentation to Multi-Platform Integration to Ecosystem Envelopment

The landscape of digital servitization in the manufacturing sector is evolving, marked by a strategic shift from traditional product-centric to platform business models (BMs). Manufacturing firms often employ a blend of approaches to develop business-to-business (B2B) platforms, leading to significant reconfigurations in their BMs. However, manufacturing firms frequently encounter failures in their B2B platform development initiatives, leading them to abandon the initial efforts and/or pivot to alternative platform strategies. Therefore, this study, through an in-depth case study of a leading wind turbine manufacturer, articulates a three-phase pivoting framework for B2B platform BMs with corresponding platform development and strategic orientation. Initially, a manufacturer focused on asset-based product sales, supplemented by asset maintenance services, follows an emergent platformization strategy, characterized by the rise of multiple, independent B2B platforms catering to diverse functions. Next, focusing on the imposed customer journey strategy, the firm shifts towards an imposed and strategic multi-platform integration into an all-encompassing platform supported by artificial intelligence (AI), signaling a maturation of the platform BM to combine the wide range services into an energy-performance-based contract. Finally, the last step of the firm’s platform BM evolution consists of a deliberate open platform strategy to external stakeholders and enveloping its offerings in a broader platform ecosystem. The study showcases advanced AI applications that process wind farm, wind turbine, and blade data, signifying a transformative leap toward value capture via platform ecosystem. The paper advances B2B platform BMs and digital servitization literature, highlighting a progressive approach's efficacy and strategic pivoting.

From tenants to subscribers: Digital experiments in residential rent extraction

Rent relations from landed property are increasingly being leveraged for experimentation with new forms of value capture via digital technologies. Inspired by platform corporations, real estate actors are constantly trialling innovations for deepening and extending residential rent extraction. This paper sheds light on these mounting experiments using the case of co-living, a real estate sector with a strong elective affinity to corporate capitalist technology. First, it documents attempts to optimise the rent-generating potential of real estate assets themselves via spatial surveillance and dynamic pricing. Second, it highlights efforts to establish forms of techno-economic enclosure beyond the limits of buildings via housing memberships and subscriptions. In so doing, the paper contributes to an emerging body of literature on the intersection between digital and residential rentierism.

Using a rough-fuzzy DANP technique for analysis of the key factors affecting the development of a green business in the machinery manufacturing sector

In the field of machinery manufacturing, green transformation has become an essential objective for corporate governance. Implementing environmentally conscious practices not only contributes to ecological preservation and sustainable growth but also strengthens corporate reputation, lowers operational expenses, and fosters innovation. Despite these advantages, further investigation is required to identify the key factors influencing Green Business (GB) initiatives within the machinery manufacturing industry and to evaluate the practical significance of the strategies essential for advancing sustainable development. Additionally, it is crucial to determine which strategies enable firms to gain and sustain a competitive edge. Currently, the industry lacks a comprehensive methodology and an integrated framework for GB models. This study addresses this gap by systematically identifying critical indicators shaping GB practices. The rough-fuzzy Decision-Making Trial and Evaluation Laboratory (DEMATEL) technique, combined with the Analytic Network Process (ANP), referred to as DANP, is employed to analyze the interrelationships among these indicators and to assign relative weights. The use of a rough-fuzzy-based approach not only synthesizes expert judgments but also accommodates information uncertainty. The findings indicate that “green value realization” is the most pivotal dimension of the GB model. Moreover, “green value capture,” “green value proposition,” and “sustainable value creation” emerge as the three primary areas for enhancement. This study offers a strategic roadmap for decision-makers in the machinery manufacturing sector to progress towards GB practices. By embedding green transformation strategies into manufacturing operations and supply chain management, enterprises can promote sustainable development and reinforce their market position.

What keeps the market ticking? The role of third‐party audiences and cognitive embeddedness in shaping competitive dynamics in luxury watchmaking

AbstractResearch SummaryCompetitive dynamics between firms and buyers are shaped by mutually understood conceptual systems that enable market interactions. Third‐party audiences, such as the media, play a crucial role in shaping market structure and evolution by facilitating the development of these conceptual systems. Although they do not directly engage in contractual bargaining, third‐party audiences stabilize perceptions and facilitate market interactions by cognitively embedding competitive dynamics. Our study examines the coreness of firms within the semantic network of firm names as relayed by the media. We find that higher coreness positively impacts auction prices. This effect is moderated by firm visibility and the tone of media coverage. Our model is tested using a unique dataset from the luxury watchmaking industry.Managerial SummaryWe demonstrate that a firm's performance is shaped not only by how prominently or positively it is featured in the media, but also by the relational context in which it is mentioned. Firms that are frequently mentioned alongside other key industry players are perceived to be the core of the industry, leading to higher auction prices for their products. The effect is strengthened when a firm enjoys frequent and positive media coverage. For managers, our findings underscore the importance of understanding how and why the media associates their brand with others, as this can enhance its value in secondary markets, and thus potentially boost value capture in primary markets. Our analysis explores the luxury watchmaking industry, a setting that is rarely studied.

Global value and wealth chains in contemporary capitalism: Editorial introduction

This introduction to a special section on global value chains and global wealth chains elaborates on the concept of entanglement as a way to understand dynamics of value capture, accumulation and inequality in contemporary capitalism. The authors first review the analytical framework they have proposed for analyzing entangled chains based on two dimensions: 1) the relative importance of intangible versus tangible assets; and (2) the primary strategy of lead firms – specifically, whether that strategy is oriented towards value creation or wealth accumulation activities. They then briefly discuss the four papers comprising this special section which collectively advance our knowledge of how production and finance are imbricated in the global political economy.

Alignment of digital health value propositions to business models in sub-Saharan Africa

Orientation: Digital health delivers value in the form of efficiency, efficacy and transformation by automation and strengthening of global health care systems, according to the World Health Organization. Yet, sub-Saharan Africa’s (SSA) health care systems still experience an evident misalignment between their business models (BMs) and digital health value propositions. As a result, digital health interventions (DHI) are duplicated for similar purposes; several pilot projects hardly reach country-wide implementation and health security remains unattainable, in the Fourth Industrial Revolution era.Research purpose: The study aims to conduct a scoping review highlighting how the value-add propositions of DHI could align with health care system BMs in SSA.Motivation for the study: The study was informed by the need to address the impact of health care business models on adopting Digital Health and advanced Industry 4.0 technologies for Health Security in the sub-Saharan Africa (SSA) context.Research design, approach and method: The paper followed Arksey and O’Malley’s five-stage scoping review guide to identify publications on the value propositions of DHI in health care systems of SSA.Main findings: There is limited scholarly work focused on how sub-Saharan African health care system BMs cater to DHI in relation to the fast-paced advancements in technology. Drivers of value-add creation, inhibitors of digital health value capture and the requirements of BMs that support the value propositions offered by DHI were discussed.Practical/managerial implications: Findings can assist health managers to redirect the trajectory of integrating digital health value propositions interventions in SSA health care systems towards redressing recurrent challenges that inhibit technology adoption.Contribution/value-add: The paper highlights how the value-add propositions of digital health should be aligned to BMs of health care systems in SSA to ensure duplications are addressed and provide a move towards wide-scale implementations.

Vertical Integration versus Open Innovation? From Winner Takes it All to Winners Make it All

This study explores the dynamics between the extremes of open innovation (OI)—from inclusive co-creation to exclusive vertical integration (VI). This analysis addresses the management issues of how Tesla and Porsche manage value capture and value distribution in the e-mobility industry through their contrasting approaches and strategic shifts between OI and VI. It develops a novel theoretical model juxtaposing the OI mode from open to closed with the value chain position from horizontal to vertical. Analyzing Tesla and Porsche’s strategic moves offers a paradigm shift for OI practitioners. Our model can enable enhanced value capture through greater openness and more inclusive value distribution through proactive inside-out strategies in core technology areas. Instead of positioning VI and OI as static polar extremes, a novel combination of VI and OI can realize untapped potential.

How to deploy the PSS towards a circular economy in housing? A multiple-case study

Transitioning to a circular housing economy necessitates innovative business models informed by Circular Economy (CE) principles. Yet, a business viewpoint is almost absent from the current circular housing discourse. Of various applicable business approaches, the Product-Service System (PSS) has frequently been put forward due to its resource reduction capacity. Nonetheless, its practical application within the realm of circular housing remains an uncharted territory. To address this knowledge gap, this study employed a multiple-case study, investigating the practices of five frontrunners in the field through interviews and document analysis. The findings informed an empirically grounded framework of 14 guiding principles that provide actionable knowledge for deploying the PSS for a CE in housing across the value proposition, value creation and delivery, and value capture components of the business model concept. Additionally, the findings highlighted the role of intermediary-led collaborative value networks as catalysts for PSS and CE implementation in housing. Beyond these theoretical contributions, the findings and framework presented herein can serve as a dependable point of reference for practitioners in their quest to explore and capture the potential of the PSS towards a CE in housing.

The social shaping of biotechnological innovation. The case of Covid-19 protein vaccine in Cuba and the US

AbstractLike other technologies, vaccines are socially shaped by socio-economic, political and organisational factors. Property rights, value capture strategies and public innovation policies guide research teams in the biochemical design of vaccines, with inevitable consequences for their price and accessibility. The Covid-19 pandemic provided an opportunity to analyse this institutional shaping process and its consequences for global public health from a political economy perspective. Indeed, the same type of invention, a recombinant protein vaccine, was simultaneously and originally developed in the US and Cuban biopharmaceutical industries and in the field of philanthropic Open Innovation. The article shows, through empirical research that collected direct testimony from scientists and privileged observers of the vaccine development fields, how certain norms and values characteristic of the US industry (financialization, assetization and de-risk) created a path dependency in the use of proprietary and experimental biotechnologies that made the US vaccine Nuvaxovid more expensive and complex to produce, but no more effective and safe than Abdala, Soberana 02 and Corbevax. In addition, the institutional constraints of the US biopharmaceutical industry on radical innovation, even within a mature biotechnology platform such as protein vaccines, would have resulted in a competitive disadvantage for Nuvaxovid, which was as expensive as an mRNA vaccine but less rapid to market and less reliable in delivery. The case of protein vaccines against Covid-19 thus shows how the institutional architectures of techno-scientific capitalism create not only inequalities but also inefficiencies, and that an innovation path with excellent results is possible even in competition where the market is not the dominant order of worth.

AI-enabled smart manufacturing boosts ecosystem value capture: The importance of servitization pathways within digital-intensive industries

Understanding successful pathways for manufacturers to capture value within the service ecosystem framework is a recent and still nascent area of research that requires further investigation and growth. Within industrial settings, artificial intelligence (AI) constitutes an enabling technology that can be integrated across a network of products and systems, driving the transformation of these service ecosystems. From this perspective, this study proposes that the symbiotic convergence between AI-enabled smart manufacturing, which facilitates process and product enhancements, and servitization, which enables product availability and customization, contributes to a higher level of ecosystem value capture. To address this issue, a research model employing Smart Partial Least Squares was developed to examine the interplay between these constructs. By using survey data from a purposively selected sample of servitized manufacturing firms, the findings reveal the synergistic effects of integrating AI-enabled smart manufacturing and servitization. Furthermore, the results indicate variances across industrial sectors, and highlight that in digitally-intensive industries, service business models have undergone more substantial transformations, fostering accelerated ecosystem development streamlined by customization. Conversely, in digitally-augmented industries, where inputs are digital but products are predominantly analog, digital capabilities are primarily confined to production processes.

Exploring the virtuous circle of societal value creation and capture by non-profit organizations from a Bourdieusian perspective

ABSTRACT For non-profit organizations, the way that societal value is created, captured and articulated remains ambiguous. While value creation is well-established in the literature, the understanding of value capture, particularly in its non-economic dimensions, is in its nascent stages. However, understanding value capture beyond its economic dimension is crucial, as it impacts the capacity to create more societal value. Drawing on Bourdieu’s theory of forms of capital (economic, social, cultural, and symbolic), this research proposes a theoretical framework to explain societal value creation and capture for the non-profit sector, illustrated by the case study of Doctors Without Borders.

Involving lead users in firm’s standardization strategy within action groups: evidence from smart robotics

PurposeThis research explores how firms manage the complex technologies standardization in action groups. It considers the strategic issues that technology producers face when involving lead users in architecture design. Drawing on the multi-mode standardization literature, this study addresses two dilemmas regarding value creation and appropriation by technology producers within coalitions. The first dilemma is how to create value by developing solutions in compliance with industry standards. The second one is how to appropriate value while ensuring the technology sharing with action groups. The answers to these two dilemmas contribute to filling the research gap on value creation and appropriation in multi-mode standardization.Design/methodology/approachThe research focuses on technology producers participating in action groups where lead users play a crucial role. We conducted a qualitative analysis based on the standardization experience of a Japanese company specializing in smart robotics. Data are collected through semi-structured interviews with key actors. Action groups are defined operationally as a set of stakeholders including competitors of the technology producers, component suppliers, end users, services providers, research centers and academia. The case study is suitable for highlighting specific aspects of the standardization process during its manifestation. It reveals how firms create and appropriate value, providing details about its standardization strategy.FindingsOur findings show that smart robotics standardization is drivn by collaborative models, where the two dilemmas of value creation and appropriation are evident. Firstly, the case revealed that standardization is lead users oriented. Secondly, lead users’ involvement is crucial to customize technologies. Thirdly, the firm’s position is to share a part of the value with the members. The IPR policy is a matter of interest within action groups, since the collaboration is based on open innovation models to share patents and licenses related knowledge.Research limitations/implicationsThis research has some limitations attributable to the limited generalizability of the results due to the qualitative analysis. In addition, this study considers the perspective of technology producers, but should also take into account the perspective of both collective actions itself and the lead users. Findings have some implications in the strategy negotiation. Participating in action groups is not enough to ensure a competitive advantage. Involving lead users is of strategic importance to acquire a competitive advantage. Lead users contribute to the producers’ technology design, helping firms to differentiate solutions from the industry standard and create value from customized technologies.Practical implicationsThis study helps practitioners understand the competitive side of collective actions, clarifying the value capture and appropriability in standardization. The research provides insights to policymakers and standard development organizations committees when they are called to harmonize standards considering the fallouts on the sector’s competitiveness. Findings suggest appropriate property rights policies to manage the issues related to the value appropriability and technology sharing, recognizing action groups members for their contribution in value creation.Originality/valueThis study shows how firms deal within action groups with the two dilemmas of variety versus technology conformity and property rights versus technology sharing. It fills the research gap in collective actions, emphasizing the perspective of the individual firm in the group rather than the coalition strategy itself. This topic highlights the crucial role of lead users within action groups in managing the two dilemmas, offering a new perspective for understanding critical issues of multi-mode standardization. Reflecting on mechanisms and tools to manage the two dilemmas allows firms to protect their competitive advantage in coalitions.

Neoliberal urban segregation and property tax: A critical view of Santiago, Chile

Urban property taxes are primordial land value capture mechanisms that can potentially redistribute public income to underprivileged areas in a city. However, in Santiago, Chile, a city with considerable socio-spatial segregation correlated with significant disparities in municipal budgets, social welfare, and intergenerational reproduction of wealth, the property tax system is weak to address this issue effectively. This study analyses the potential redistributive capacity of property taxes in Greater Santiago, comparing the evolution of real estate surplus values with municipal budgets. These results show that a 2% increase in property taxes would suffice to equalize per capita municipal budgets, essential to redistribute social welfare. In Chiles’s neoliberal planning framework, we argue that weak property taxes are critical for the intergenerational reproduction of wealth and poverty in different municipalities. Property as capital is efficient for capturing unearned value in the long term and obtaining rental income, two mechanisms of inequality reproduction, as property accumulation is only feasible if it is not progressively taxed. In sum, this analysis of property taxes in Santiago contributes to the theoretical understanding of passive mechanisms of inequality reproduction in a neoliberal system and empirical support for a progressive increase of property taxes.

A blueprint for success? Exploring business models of additive manufacturing ventures

Additive Manufacturing (AM) was expected to be the next great technological revolution, yet the predicted market growth has fallen short by 40%. Using a proprietary, cross-sectional data set of 350 ventures in the AM field founded between 2000 and 2017, this study analyses AM companies from a business model perspective. Specifically, we explore which value delivery and value capture mechanisms are decisive for AM venture success, measured via their operational and ownership state. We reveal that targeting the B2B market and selling via partner networks significantly increases firm survival likelihood. Further, applying a recurring revenue model increases the likelihood of an IPO. Our main contributions are two-fold: first, our research complements the business model literature by evaluating value delivery and capture in the AM entrepreneurial space, revealing that customer segments, sales channels, and revenue models are key to venture success. Second, we provide business model design guidelines to entrepreneurs as well venture capitalists in the AM field.

Research on business model innovation of SMEs in the industrial internet era: building theory from the case of PAYA

Purpose Aside from grappling with technological advancements, enterprises in the industrial internet era are embracing business model innovation to align with the evolution of the industrial internet. However, a gap persists in the existing research regarding the strategies and methods available to small and medium-sized enterprises (SMEs) for executing business model innovation. Therefore, this paper aims to explore the connotation, characteristics and logic of business model innovation for SMEs in the industrial internet era. Design/methodology/approach To explore the business model innovation logic of small and medium-sized enterprises in the era of industrial internet, the paper adopts a longitudinal single-case study approach, with PAYA, a medium-sized enterprise in the electromechanical industry, serving as the subject of research. It systematically analyzes PAYA’s business model innovation, centering on four key elements of the business model: value proposition, value creation, value delivery and value capture. Findings The study proposes two types of business model innovation, namely, “Migration” and “Expansion”, and explains the logic of business model innovation for SMEs in the industrial internet era: faced with a rapidly changing market environment, entrepreneurs put forward the value proposition through the insight of the market environment, then enterprises conduct technological innovation to support the value creation by their own unique experience and knowledge, and then improve the legitimacy of the market by expanding the influence of market acceptance of the new business model to promote the value delivery, and finally capture the economic value and ecological value. Originality/value The types and logic of business model innovation proposed in this paper contribute to supplementing and developing the theory of business model innovation and meanwhile have important reference value for SMEs in the industrial internet era.

Implementing circular business models for the second‐life battery of electric vehicles: Challenges and enablers from an ecosystem perspective

AbstractThis study adopts an ecosystem perspective to provide a detailed understanding of key challenges and enablers for implementing circular business models for electric vehicle battery second life. Although academia and practitioners believe electric vehicle (EV) batteries' second life is a potential solution, the commercial implementations are still far away. A crucial step toward such implementations is to identify the key challenges and enablers of circular business models. The criticality of this step is even more evident when approaching second life business models from an ecosystem perspective, where multiple stakeholders are involved in the creation, capture, and delivery of value. This research conducts an explorative study with 15 companies in the EV battery ecosystem and identifies nine categories of key challenges and seven categories of key enablers. Based on priority dimensions (short/long term) and the responsible entity (firm/ecosystem related), the study proposes a guiding framework to address challenges and enablers. The study contributes to the circular business model innovation and ecosystems literature related to the EV battery second life.