Value creation mechanisms of business models

Abstract

<jats:p> Management scholars and practitioners generally agree that the primary functions of a business model are value creation and value capture. However, the meaning (conceptualization) of these terms, their measurement, and the factors and mechanisms affecting them remain contentious. In the current article, we provide answers to these questions by clarifying the consumers’ value creation and business value capture constructs. Then, we demonstrate how they are determined by four business model mechanisms: value proposition and value targeting (affecting consumers’ value through willingness to pay) and value appropriation and value delivery (affecting business value through price and cost). We demonstrate that a fine-grained analysis of a business model’s value creation cannot be adequately performed without reference to these four mechanisms. The developed conceptual framework is illustrated and corroborated by the mini-case vignettes. We finish by outlining an application of the proposed framework to two crucial real-world business model situations: escaping the Giver Trap and remaining the Winner. </jats:p>

The role of intelligent manufacturing systems in the implementation of Industry 4.0 by small and medium enterprises in developing countries

“…80 It is convenient to analyze the impact of these technologies on these firms through the lens of their business models or microeconomic mechanisms of value creation and capture. 81,82 Figure 11 summarizes the argument regarding the business impact of Industry 4.0 integration for the developing countries' SMEs. The schematic illustrates that critical converging technologies can be significant value drivers for SMEs business models in developing countries.…”

“…In particular, the total value created (TVC) by a firm's business model is the difference between consumers' aggregate WTP for the offering of the firm's value proposition and the aggregated costs (C) that the firm incurs for delivering on the promises of the value proposition. 82,89 TVC = WTP − C.…”

“…WTP reflects the perceived, independent evaluation of the benefits obtained from an exchange with the firm, constrained by the consumer's wealth. The organizational business model affects the "consumers" WTP through its value proposition 82 F I G U R E 12 Industry 4.0: The impact on microeconomic productivity of developing countries' SMEs benefits. The firm can increase the "consumers" WTP by better adjusting its value proposition to their needs, passions, desires and personal consequences.…”

“…This process can substantively reshape management practices and operations of developing countries' SMEs, providing multiple new opportunities for international growth and performance 80 . It is convenient to analyze the impact of these technologies on these firms through the lens of their business models or microeconomic mechanisms of value creation and capture 81,82 . Figure 11 summarizes the argument regarding the business impact of Industry 4.0 integration for the developing countries' SMEs.…”

Reconfiguration of Business Models of Industrial Enterprises: Vectors of Increasing Sustainability in the New Realities

“…to create value) и захват, получение ценности (англ. to capture value) [Biloshapka et al, 2018;Iheanachor et al, 2021]. При этом концептуализация этих терминов, их измерение, архитектура, а также факторы и механизмы, влияющие на них и обеспечивающие их реализацию, имеют достаточно широкую интерпретацию и лежат в дискуссионной плоскости.…”