Value Creation Mechanisms Research Articles

Innovative Circular Business Models in the Olive Oil Sector for Sustainable Mediterranean Agrifood Systems

Considering the large amounts of harmful waste produced in the Mediterranean olive sector, entrepreneurial initiatives creating value from olive waste and by-products via circular bio-economy approaches are reviewed. These circular business models aim to enhance the functionality use of olive trees beyond traditional patterns for value creation. The study focuses on business drivers and value creation mechanisms, and specifically on conversion pathways of olive waste towards new value propositions. In total, 41 cases are analyzed mainly according to the Business Model Canvas components with NVivo, based on data gathered from an extensive online search mainly of company websites and reports, online articles, research project reports, professional websites, and newsletters. Results indicate that some innovative businesses have emerged specializing in the domain of olive waste valorization, driven by environmental concerns and mainly focusing on bioenergy production. However, the overall olive biomass potential yet seems to be under-valorized. A more radical and systemic change will be needed for effective implementation of circular business models contributing to sustainable development in the Mediterranean olive sector, with adequate subsidies, common regulations, more collective actions for creating economies of scale, and marketing strategies to increase consumer awareness for bio-based products.

Who owns the mud? Valuable leftovers, sociotechnical innovation and changing relations of production in artisanal gold mining (Burkina Faso)

AbstractThe expansion of artisanal gold mining has contributed to agrarian change in most of the global South—including West Africa: the sector offers interesting examples of technological and socio‐economic change, reflecting broader dynamics in the political economy of mining. In this article, we rely on our multisited ethnography to show how innovations in gold processing—particularly, the shift from mercury‐based to cyanide‐based techniques—reconfigured power relations and organizational patterns in the artisanal mining sector in Burkina Faso. We show that, in the context of structural transformations and pressure from powerful actors, the mechanisms of value creation, the definition of property rights and the relations of production remained open for negotiation and redefinition. Bringing attention to new scenarios opened by the shift to cyanide for processing gold—a transformative factor in many gold mining areas across the world—our analysis contributes to a broader reflection on the nexus between the trajectories of sociotechnical innovation and the ongoing power struggles in the informal economies of resource extraction.

Value Creation Analysis: Semiconductor Intellectual Property Business Models and Dynamic Capabilities

Semiconductor intellectual property (SIP) represents a crucial component of integrated circuit design activities. However, many small SIP firms fail to create value and adopt a viable business model. This article aims to investigate the value creation mechanism within the SIP business by drawing on the business model and dynamic capabilities views of the firm. First, the authors classify the forms and types of SIP from a technology and market perspective. Analyzing ten leading SIP firms, three SIP business models based on resources, competencies, and strategies are then identified. Dynamic capabilities are then linked to the selection and implementation of classified business models. Findings of the study suggest that existing SIP business models primarily favor large vendors. Keystone business model is proposed as a possible successful business model for small vendors. Consequently, this article provides insights and opportunities for leveraging the SIP ecosystem and business model innovation for small firms in the industry.

Сервитизация промышленности: новая реальность

A significant increase in the use of services is observed for some industries in GVCs (Global Value Chains). The paper has shed light on important dimension of the servitization which is the sale and export of services by manufacturing firms, often bundled together with goods. Firm-level data confirm that many firms are involved both in the production of goods and services and that there are complementarities between these activities. Not only manufacturing firms are involved in the distribution, transport and logistics services needed for their international operations in GVCs but also, they provide installation, maintenance, repair services as well as a variety of other business support and complementary services that increase value for their customers. The servitization has important policy implications, particularly when taking into account the fact that trade in services is generally more restricted than trade in goods. As the lines between goods and services are blurred, economic policy today might be more challenging than in the past, particularly for companies moving to new business models that imply more interactions with customers and a more intensive use of digital technologies. Services themselves are split into different modes of supply for which there are different levels of economic policy. A closer look at the mechanisms of value creation in the case of services suggests that there are still the needs of new economic policy addressed at business models described as value networks or value shops. As technologies become more disruptive and more companies move to ‘servicified’ GVCs, the need for a more consistent international economic policy regime, particularly at the multilateral level, will become more urgent.

Identifying Value Creation Patterns for Smart Services

In manufacturing industry, digital services that build up on product’s data are gaining significantly in importance. These so-called smart services induce a profound change in value creation for involved stakeholders. Due to new value creation structures and mechanisms, the planning of value networks for smart services becomes a highly sophisticated matter. This paper aims to facilitate the strategic planning of value networks for smart service providers by presenting a collection of value creation patterns. These patterns were identified in a combined approach that includes a comprehensive literature analysis, a best practice review, and a validation in four case studies.

The Economic Value and Valuation of Architectural Heritage

This study reflects the authors’ vision on the value of architectural heritage. The theories of value are examined, and the most explicit theory is identified from a practical point of view. From our perspective, the theory of entropic value is the most explicit theory from the point of view of detailing the reasoning process on the source of value, the value, and the measure of the value. The method of goods real value estimation is explained based on the analysis of the value creation mechanism, according to the entropic value theory. The analysis of the particularities of the architectural heritage from modern theory valuation perspective allowed authors to formulate methodological proposals for value estimation of real estate with cultural, architectural and historical value.

Social Value Creation in Institutional Voids: A Business Model Perspective

The literature on Base of the Pyramid (BoP) strategies emphasizes that creating social value requires collaborative, multi-stakeholder business approaches. However, there is limited understanding of how businesses can successfully coordinate such value creation processes in the developing economies that face significant institutional voids. This study adopts a business model perspective for analyzing social value creation processes that span organizational boundaries. We introduce a novel, theoretically grounded business model framework that helps conceptualize social value by locating the various loci of value creation, and the stakeholders that partake in creating and capturing this value. We subsequently analyze the mechanisms of social value creation in M-Pesa, a renowned boundary-spanning mobile money system that has advanced financial inclusion among tens of millions of users in Kenya. The results show that information and communications technology can help advance social value creation by reducing the cost of coordinating boundary-spanning business models that integrate diverse societal stakeholders. The results further point to uneven distributional outcomes in self-governing social value creation strategies where the focal firm plays a coordinating role.

Renewable energy from the solid-state anaerobic digestion of grape marc and cheese whey at high treatment capacity

Globally, wine production annually generates some 11 million metric tonnes of grape marc (GM) while the cheese-making industry releases over 200 million m3 y−1 of effluent. Where value-creation mechanisms are absent, such wastes may be channelled to landfills. The study aimed to evaluate the bioenergy potential of the combined treatment of such wastes. Digestion of feedstock at a ratio 3/1 GM/CW (w/w) was conducted in unstirred conditions at 45 °C, following optimisation through the Taguchi Method. Cumulative biogas and methane yields were 0.601 m3 gas kg−1 VS and 0.363 m3 CH4 kg−1 VS, respectively. Firmicutes and Bacteroides mediated hydrolysis and acidogenesis, thus providing metabolites to Methanosarcina. Co-digestion can potentially generate 1330 GW h and 482,000 Mt CO2-equivalents avoidance. Wine and dairy industries jointly present a case for value-creation through a circular economy, thereby reducing the dependency on non-renewables, renewing commitment to the Paris Agreement.

A Method for Building Service Process Value Model Based on Process Mining

With the emergence and development of servitization, more and more enterprises are turning from product focus to service focus. Service is customer-oriented, and driven by customer requirements. Value is the goal pursued by all actors in the service. In order to analyze the mechanism of multi-actor collaborative value creation in the service process, this paper proposes a method for building a service process value model, based on process mining. Driven by the raw data and an event log of service activities and processes in the real world, stored in the service system, the method uses process mining techniques and combines domain knowledge to describe the construction steps of the service process value model at the conceptual level. We focus on the specific processes and activities in the service, and mainly consider the value creation of the activity. The model proposed in this paper aims, to reflect how service actors co-create value in the actual execution of service processes, and to help service actors achieve their value goals. We use a case study inspired by an industrial case to validate our idea. Moreover, we develop a new plug-in, based on the α-algorithm for ProM, to realize the model construction in the case study.

The evolution of cooperation in the face of conflict: Evidence from the innovation ecosystem for mobile telecom standards development

AbstractResearch SummaryHow does interfirm cooperation in innovation ecosystems evolve in the face of conflict? We theorize that conflict propels firms to reconfigure cooperative relationships while maintaining and even increasing cooperation with aggressors because cooperation is the primary mechanism for value creation in such ecosystems. To empirically test our arguments, we study patent litigation and subsequent cooperation between mobile telecommunications firms within the 3GPP standards development organization. We find evidence of a dual cooperative strategy in the face of conflict: while cooperation increases between litigants, defendants also enhance cooperation with others to steer standards away from aggressors. We also highlight the contingent roles of technological complementarities and relational position underpinning cooperation after conflict. Our findings demonstrate that in innovation ecosystems, cooperation with adversaries persists despite conflict.Managerial SummaryFirms in innovation‐driven industries cooperate to develop interoperability standards and compatible technologies. Yet, cooperative firms may disagree about what constitutes fair, reasonable, and non‐discriminatory terms for licensing intellectual property. Thus, conflict and patent litigation arise even as firms cooperate to build technologies and industry standards. We find that in innovation ecosystems, firms commonly increase cooperative efforts in response to conflict. Less‐connected firms or those with valuable complementary technologies will likely expand cooperation than well‐connected firms or technological competitors. Well‐connected firms may pursue alternative cooperative opportunities. We suggest that defendant firms' managers can adopt a dual cooperative strategy: (a) identify private and shared benefits from the joint development of complementary technologies with aggressors and (b) invest in alternative technological partnerships to influence the direction of future standards development.

Data analytics and performance: The moderating role of intuition-based HR management in major league baseball

We propose that due to the decreased spectrum of available strategies (i.e., social simplicity) and simplified mechanisms of value creation (i.e., causal clarity) associated with a greater reliance on data-driven decisions in highly competitive and specialized industries, the positive effects of social capital for data analytics on firm performance will diminish when firms predominantly adopt data-driven decision-making in deploying human resources. Alternatively, the positive effect associated with social capital in data analytics is more profound when moderated by intuition-based (i.e., idiosyncratic knowledge) decision-making for managing HR selections. To test our hypotheses, we observed 30 major league baseball (MLB) teams over 6 years from 2009 to 2014 as the early phase of the ‘big data era’ that began as a result of PITCHf/x tracking systems in all MLB stadiums being implemented. Our findings suggest that the introduction of the system to all ballparks and resulting dispersion of specialized human capital across this industry facilitates firm specificity of data analytic knowledge to become generic overtime.

Destination branding and co-creation: a service ecosystem perspective

PurposeDrawing on the service-dominant logic and the institutional theory, this paper aims to explore the value-creating mechanisms of branding in the destination context and the brand co-creation process at and between different levels of a service ecosystem.Design/methodology/approachAn exploratory research design was used to generate qualitative data from 18 in-depth interviews with important stakeholders and investigate how and why brand co-creation is fostered in the service ecosystem.FindingsThe study proposes a stepwise process of strategic imperatives for brand co-creation in the destination context. It presents the multi-directional flows of the brand meaning across levels of the tourism ecosystem and thereby interprets stakeholders’ efforts to co-create sustainable brands that gain prominence in the global tourism arena.Research limitations/implicationsFuture research might validate the framework in a quantitative research setting. The extended analysis of the value-creating ecosystem could investigate the role of institutions and brand value propositions across levels.Practical implicationsAcknowledging their limited control over the brand co-creation process, tourism practitioners are offered step-by-step guidance to help shape a destination brand that may retain relevance in the tourists’ minds. Critical insights are provided into resource sharing between actors and subsequent responsibilities for a sustainable destination branding strategy.Originality/valueThe paper considers the significance of the various levels in the ecosystem and the underlying mechanisms of brand co-creation in a somewhat neglected branding domain.

Confucian business model canvas in the Asia Pacific: a Yin-Yang harmony cognition to value creation and innovation

ABSTRACT From an integrative view of paradox and culture, this research aims to elucidate the impact of cultural heterogeneity on the compositional structure of business models (BMs) in the Asia Pacific by focusing on the core BM content about the mechanisms of value creation and innovation. After a systematic review addressing the knowledge void, we refine the widely accepted, renowned model of a BM canvas to propose a new, indigenous Confucian BM canvas using the Yin-Yang harmony cognition as the underlying rationale for identifying the peculiar, innovative value-creating patterns of BMs in Confucian Asia. Our canvas encompasses three new building blocks: Social Legitimacy, Institutional Enabler, Institutional Disabler, that reflects the idiosyncratic Confucian cultural values and, thereby, can serve as a vital strategic map. Based on the insights distilled from this new canvas, we further suggest a novel ‘networked synergistic mode of innovation for value creation’ with an example of the electric motor industry in the Asia Pacific region. Theoretical, practical and policy implications are also discussed.

Strategizing the Co-Developments of Business Models and Ecosystems for Platforms

Business Models and Ecosystems represent two important theoretical lenses for understanding value creation (and subsequent value capture). Each perspective brings great insights to understanding platform firms. When explaining platform’s value creation and capture mechanism, strategy scholars tend to focus on just one perspective. While each perspective has usefully explained mechanisms for value creation and capture and acknowledged the conceptual significance of another, interactive aspect between them has been under-explored. We suggest that bringing the two perspectives together brings added insights, especially in the cases where complementors can both create and destroy value. This paper advances theory by offering a preliminary integrated framework . Building on interdependencies as foundations of both ecosystem and business model, it shows how platform entrepreneurs can choose to design different interdependencies on a same service. With each design choice having different implications for both scale and scope, entrepreneurs can co-develop both platform business model and ecosystem. The integral view offers theoretical insights on 1) platform competitive dynamics, 2) changes in value creations and capture mechanisms understood as business model / ecosystem changes, and 3) entrepreneurial opportunity formations.

Master of Puppets: How Common Ownership Interferes with Competitive Dynamics in Platform Markets?

Why does a company dominate certain markets with rigor while exiting other seemingly equally attractive ones? The answer to this question might lie in “who calls the shots at that company and the rest of the industry.” We investigate the implications of “common ownership”, which occurs when institutional investors simultaneously hold equity positions (i.e., minority shareholdings) in several (or all) natural competitors within a concentrated industry. We extend prior research on common ownership towards platform markets where the industry-wide value creation mechanisms significantly differ from that of the traditional markets due to the multi-sidedness. We provide a systematic explication and assessment of when and under what conditions common owners might have higher incentives to interfere with competitive dynamics toward profit maximization of the portfolio of the firms over which they have ownerships, rather than maximization of an individual firm’s profit per se. We distinguish between several platform characteristics across different institutional settings and suggest that—in comparison to the baseline scenario where platforms do not have a common owner (i.e., separate ownership)—the presence of common ownership in platform markets might lead to common owner’s interference, which might dramatically shape the competitive dynamics within the industry.

Anger as a trigger for information search in integrative negotiations.

Research has shown that anger can be both detrimental in negotiations (increasing the chance of impasse or conflict) and helpful to the angry person (by eliciting concessions from the other party). Much of this work has focused on a receiver's emotional response to anger. Yet little work has examined the influence of anger on information search, an important cognitive mechanism for joint value creation in integrative negotiations. We propose a cognitive approach: that negotiators facing an angry partner are more likely to seek out diagnostic information about their partner's preferences and priorities. In turn, this information should enable negotiators to reach higher joint gains. Across multiple studies, we find that negotiators facing an angry versus a happy counterpart seek out more information, which leads to increased value creation. We discuss the theoretical and practical implications of these findings. (PsycInfo Database Record (c) 2020 APA, all rights reserved).

The Processes for Creating Value in Natural Food Production in Contemporary Turkey

Turkey has a niche market based on healthy food consumption that has expanded over the last two decades. This has set the ground for a third sector, the noncertified natural food production that is separate from Certified Organic (CO) and Good Agricultural Practices (GAP). This study examines the value creation mechanisms in Turkey’s natural food production, revealing that women’s knowledge and labor and various discursive strategies appear as the fundamental elements for creating value in the sector. I argue that the creation and dissemination of a particular discourse about natural foods are just as significant as the material production of such food in creating value and accumulating capital. While material production is realized by appropriating women’s labor and knowledge, discursive production is achieved by romanticizing the past. This study is based on empirical data retrieved from a private-run farm located in the Nazilli district of Aydın, Turkey. I conduct in-depth interviews with the owner of the farm and the employees from diverse hierarchical positions. This study is also based on a basic content analysis of the narratives that circulate on the farm’s webpage and email group for trust-building.

Exploring interpretations of blockchain's value in healthcare: a multi-stakeholder approach

PurposeDrawing broadly from the technology frame (Davidson, 2002) and organizing vision perspectives (Swanson and Ramiller, 1997) which consider the business value of information technology as resulting from actors' efforts to make sense of new technology, the study applies Ojala's (2016) business model framework to examine how different sets of actors understand the value of blockchain within the healthcare sector.Design/methodology/approachTo include the perspective of different sets of actors, the research combines a systematic literature review to capture academic research, semi-structured interviews with blockchain experts, with an analysis of blockchain healthcare vendors.FindingsThe study finds a high degree of congruence between the perspective of different actors, with key sources of blockchain value concentrated around value proposition, particularly enhancing privacy and security; value capture, specifically cost savings, and value network, mostly enhancing data accessibility and reducing intermediation. Value delivery is the least emphasized value creation mechanism and concerns primarily improvements in supply chain transparency. Minor variations between actors' interpretations of value exist, mostly around the contribution of blockchain to support the value proposition and include the provision of social value, the creation of trust, supporting automation and improving employment.Originality/valueRecognizing that the value of new technology is as much the result of actors' interpretations, as the objective outcome of its deployment, this study takes a multi-stakeholder perspective to examine blockchain's business value and highlights new aspects of value associated with blockchain deployments. The findings include a value outcome framework that allows systematic comparisons between blockchain implementations across contexts.

The impact of renewable on-site energy production on property values

PurposeContrary to the traditional technology project perspective, real estate investors see building-specific renewable energy (on-site energy) investments as part of the property and as something affecting the property’s ability to produce a (net) cash flow. This paper aims to show the value-influencing mechanism of on-site energy production from a professional property investors’ perspective.Design/methodology/approachThe value-influencing mechanism is presented with a case study of a prime logistics property located in the Helsinki metropolitan area, Finland. The case study results are compared with the results of a survey answered by over 70 property valuation professionals in the Finnish real estate market.FindingsCurrent valuation practice supports the presented value-creation mechanism based on the capitalisation of the savings generated by a building’s own energy production. Valuation professionals see benefits beyond decreased operating expenses such as enhanced image and better saleability. However, valuers acted more conservatively than expected when transferring these additional benefits to the cash flows of the case property.Practical implicationsBecause the savings in operating expenses can be capitalised into the property value, property investors should consider on-site energy production when the return of on-site energy exceeds the return of the property. This enhances the profitability of on-site energy, especially in urban areas with low initial yields.Originality/valueThis is the first research paper to open the value-influencing mechanism of on-site energy production from a professional property investors’ perspective in commercial properties and to confirm it from a market study.

How Social Entrepreneurs’ Inner Realities Shape Value Creation

This paper empirically examines how social entrepreneurs’ inner realities – thoughts, feelings, self-awareness – shape the entrepreneurial value creation process. A qualitative research design was used to induce theory. Evidence shows social entrepreneurs engaged in practices that increased awareness of both positive and negative aspects of their inner realities. Positive aspects tended to enable generative value creation mechanisms and lead to positive social/environmental outcomes; negative aspects tended to interfere and lead to unintended negative outcomes. Key contributions include a fuller picture of the value creation process from multiple levels – individual, enterprise, wider environment – while considering social entrepreneurs’ exterior and interior dimensions.