Exploring value as the foundation of value proposition design
journal contributionposted on 2017-03-09, 09:37 authored by Taman H. Powell, Mathew Hughes
Purpose: Business models define the activity system that an organization employs to create and capture value. As such, business models are essentially the application of strategic management. The term business model, however, suffers from definitional ambiguity which makes the construction of effective business models problematic. We argue that this ambiguity is largely due to a lack of clarity around value. This paper seeks to provide clarity around value and in doing so aid in the development of effective business models. Design/methodology/approach: Theoretical paper that deconstructs value into use value and exchange value and develops these concepts. Findings: We deconstruct value into use value and exchange value to explain the micro-conditions of value creation and capture. In doing so, we also provide an explanation of how VRIN and non-VRIN resources can be traded for gain as well as opening up greater strategic options for managers in their development of business models. Originality/value: Despite the ubiquity of business models, their micro-conditions are largely assumed and therefore lack theoretical rigour. This paper aims to address this issue via deconstructing value and in doing so explain how value is created and captured. Keywords: business models, value, rent appropriation, competitive advantage, resource-based view
- Business and Economics
Published inof Business Models
CitationPOWELL, T.H. and HUGHES, M., 2016. Exploring value as the foundation of value proposition design. Journal of Business Models, 4 (1), pp. 29-44.
Publisher© The Authors. Published by Aalborg Universitetsforlag.
- AM (Accepted Manuscript)
Publisher statementThis work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 Unported (CC BY-NC-ND 3.0) licence. Full details of this licence are available at: http://creativecommons.org/licenses/by-nc-nd/3.0/
NotesThis paper was accepted for publication in the journal Journal of Business Models and the definitive published version is available at http://journalofbusinessmodels.com/article-repository/.