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Paper info: Creating And Dividing Value In A Value Creating Network

Title


Creating And Dividing Value In A Value Creating Network

Authors


David T. Wilson and Sunil Thomas

Place of Publication


The paper was published at the 19th IMP-conference in Lugano, Switzerland in 2003.

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Abstract


This work-in-progress paper presents a discussion on how value is created and divided in a value-creating network. The paper begins with a literature review of value and how it has been conceptualized in the past. This is followed by a brief discussion on consumer multi-attribute choice models. Subsequently, deterministic attributes that can be product based or relationship based are discussed, and their importance in consumer choice is reiterated. Since value chains bring together a network of firms whose core capabilities combine to create the market offering, in this paper, we examine the alliances and relationships of firms that form important nodes in the value chain. We elaborate on the idea that value to the buyer can determine the form of the relationship, but if a supplier controls a key deterministic attribute, the supplier will have a position of strength in the relationship. The paper concludes with a discussion on how value is divided between the buyer and seller.