Value capture

Abstract: Resource-based theory has tended to focus on the development and protection of valuable resources. What determines a valuable resource has received less attention. This paper addresses three related issues concerning value and valuable resources: what is value? how is it created? and who captures it? We have tried here to integrate different strands of the literature to address these questions. First, we argue that a distinction needs to be made between use value, which is subjectively assessed by customers, and exchange value, which is only realized at the point of sale. Second, we argue that the source of new use values is the labour performed by organizational members, and that firm profits can be attributed to this labour. Profit differences between competing firms derive from labour performing heterogeneously across firms. Finally, we argue that value capture is determined by the perceived power relationships between buyers and sellers.

Abstract: As an introduction to the special issue topic of value creation, we define value creation in terms of use value and exchange value and discuss some of the key issues related to its study, including the topic of value capture. Although the definition of value creation is common across levels of analysis, the process of value creation will differ based on whether value is created by an individual, an organization, or society. We use the concepts of competition and isolating mechanisms to explain how value can be captured at different levels of analysis.

Abstract: The increasing adoption of more open approaches to innovation fits uneasily with current theories of business strategy Traditional business strategy has guided firms to develop defensible positions against the forces of competition and power in the value chain, implying the importance of constructing barriers rather than promoting value creation through openness Recently, however, firms and even whole industries, such as the software industry, are experimenting with novel business models based on harnessing collective creativity through open innovation The apparent success of some of these experiments challenges prevailing views of strategy At the same time, many of these experimenters now are grappling with issues related to value capture and sustainability of their business models, as well as issues of corporate influence and the potential co-option of open initiatives These issues bring us back to traditional business strategy, which can offer important insights To make strategic sense of innovation communities, ecosystems, networks, and their implications for competitive advantage, a new approach to strategy—open strategy—is needed Open strategy balances the tenets of traditional business strategy with the promise of open innovation