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Article
Publication date: 29 March 2021

Rita Lavikka, Krishna Chauhan, Antti Peltokorpi and Olli Seppänen

Systemic innovations emerge and create value in an inter-organisational context. However, innovation studies rarely investigate the role of value creation and value capture

Abstract

Purpose

Systemic innovations emerge and create value in an inter-organisational context. However, innovation studies rarely investigate the role of value creation and value capture among multiple organisations in successful innovation implementation. This paper aims to understand the role of value creation and value capture in the implementation of systemic innovations in construction which is by nature, an inter-organisational context.

Design/methodology/approach

The empirical research focused on the barriers, enablers and opportunities for value creation and value capture of the Finnish construction project parties when trying to implement mechanical, electrical and plumbing (MEP) prefabrication, which is a systemic innovation. Data were collected through interviews, observations and action workshops.

Findings

The empirical study identified interaction patterns on how social, political, technical and economic barriers lead to uneven value capturing, lack of value-based procurement and unclear value creation between MEP design and installation. They hinder the implementation of MEP prefabrication. The results point to enablers leading to fairly shared value to all parties, procurement of value and collaborative value creation, thus increasing the usage of MEP prefabrication, a systemic innovation.

Originality/value

The study adds new knowledge by demonstrating that the identification of barriers and their interaction with enablers and opportunities for value creation and capture lay a baseline for suggestions on how to implement a systemic innovation. This study stresses the importance of enabling value creation and capture for all construction project parties when implementing a systemic innovation.

Details

Construction Innovation , vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1471-4175

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Article
Publication date: 12 November 2020

Chyi Lin Lee and Martin Locke

This study examines the effectiveness of passive value capture mechanisms as an effective form of mechanisms in funding infrastructure from an Australian perspective. The…

Abstract

Purpose

This study examines the effectiveness of passive value capture mechanisms as an effective form of mechanisms in funding infrastructure from an Australian perspective. The lukewarm response of active value capture mechanisms such as betterment levies in Australia is also discussed.

Design/methodology/approach

A case study of the Sydney Metro City and Southwest (SMCSW) project in Sydney is used to illustrate passive value capture mechanisms.

Findings

Unlike many developed countries, passive value capture mechanisms have been adopted in Australia. This approach is an effective form of value capture mechanisms to capture the value uplift to offset the total development cost of the SMCSW project. However, this approach is highly sensitive to property transaction activities that could be affected by the general economic conditions and unprecedented events such as the COVID-19 pandemic. Further, there is a widespread discussion of the efficiency of land tax in New South Wales (NSW) in capturing all properties subject to the value uplift. Consequently, a shift towards a broad-based land tax is recommended in which it would provide a more efficient way of infrastructure funding.

Practical implications

Policymakers should consider a broad-based land tax for residential and commercial properties in order to improve the efficiency of passive value capture mechanisms. This also highlights property valuers should play a greater role in the development of broad-based land tax system.

Originality/value

Previous studies have extensively demonstrated property value impacts of transit investments; very little research assesses the growth of value capture funding mechanisms, particularly passive value capture mechanisms. Specifically, this paper is the first paper to assess the effectiveness of passive value capture mechanisms.

Details

Journal of Property Investment & Finance, vol. 39 no. 3
Type: Research Article
ISSN: 1463-578X

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Article
Publication date: 11 March 2014

Soumaya Ben Letaifa

This paper uses the multidimensional definition of value – ecosystemic value – and employs lifecycle theory to identify the different stages of evolution of value-creation…

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2771

Abstract

Purpose

This paper uses the multidimensional definition of value – ecosystemic value – and employs lifecycle theory to identify the different stages of evolution of value-creation and -capture processes in an ecosystem. Specifically, the aim of this paper is to show the uneasy transition from supply chains to ecosystems.

Design/methodology/approach

Based on a field study of a Canadian ICT ecosystem, this paper adopts a multilevel perspective on value-creation and value-capture processes and illustrates how these processes need to move from a dyadic economic focus to a network socioeconomic one.

Findings

The findings pinpoint the uneasy transition from supply-chains management to ecosystems management and provide a framework for understanding how value creation and value capture should be coupled throughout the ecosystem lifecycle. Finally, five theoretical and managerial propositions are suggested to better leverage ecosystemic capabilities and better manage value creation and value capture in ecosystems.

Practical implications

Five theoretical and managerial propositions are suggested to better leverage ecosystemic capabilities and better manage value creation and value capture in ecosystems.

Originality/value

Many marketing and management scholars discuss the limitations of unbalanced perspectives (customer- or seller-centric) in building a comprehensive view of how value is created and captured. This multi-actors case study highlights how ecosystemic value creation may be obstructed by a firm's focus on value capture.

Details

Management Decision, vol. 52 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 16 March 2015

HanGyeol Seo, Yanghon Chung, Dongphil Chun and Chungwon Woo

– The purpose of this paper is to examine which value capture strategies are efficient in the invention stage and commercialization stage for small and medium enterprises (SMEs).

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1155

Abstract

Purpose

The purpose of this paper is to examine which value capture strategies are efficient in the invention stage and commercialization stage for small and medium enterprises (SMEs).

Design/methodology/approach

According to the characteristic of four primary value capture strategies, the authors categorized the formal-oriented strategy (patent), informal-oriented strategies (secrecy, lead-time), mix strategies (both formal and informal strategies), and whether to invest in complementary assets. In order to assess R & D productivity based on value capture strategy, this paper applied the two-stage data envelopment analysis for data collected from Korea Innovation Survey 2010. The sample was made up of 640 SMEs in manufacturing industry.

Findings

The results suggest that informal strategy (secrecy, lead-time) is efficient in the invention stage. Furthermore, mixed use of formal (patent) and informal strategies results in higher productivity in the commercialization stage. Lastly, the results suggest that productivity may vary depending on the investment in complementary assets. Whereas the investment in complementary assets may reduce R & D productivity at the invention stage, it may increase the productivity at the subsequent commercialization stage.

Research limitations/implications

This paper did not consider external conditions such as institutional environment, industry characteristics and complexity of technology, as possible factors affecting their firm performance that need future studies.

Practical implications

For practitioners, the results seem to stress that should be good at combining value capture strategies in order to capture financial performance from the invention.

Originality/value

This study is a novel attempt to analyze R & D productivity in terms of each value capture strategy throughout the two stages: invention stage; commercialization stage.

Details

Management Decision, vol. 53 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 11 March 2014

Suvi Nenonen and Kaj Storbacka

The last two decades have seen a surge of interest in the concept of value in business markets. Furthermore, extant literature suggests that value capture can be…

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1631

Abstract

Purpose

The last two decades have seen a surge of interest in the concept of value in business markets. Furthermore, extant literature suggests that value capture can be conceptualized as the return on the firm's customer assets. However, the existing customer asset management literature has a strong bias towards consumer markets. Thus, the purpose of this paper is to create a conceptual framework for managing customer assets for improved value capture in a business market context, and to illustrate the use of the framework empirically.

Design/methodology/approach

The authors approach the topic with conceptual development and a longitudinal case illustration from a globally operating forestry product firm.

Findings

The findings of the study indicate that B2B firms can increase their value capture by dividing their customer base into customer portfolios, which are managed with differentiated customer management concepts targeted to increase the economic profit contribution of each customer portfolio.

Practical implications

The business practitioners in B2B contexts are likely to find the proposed customer portfolio approach to managing the customer assets more approachable than the prevailing customer lifetime models. In order to gain maximum value capture benefits from portfolio-specific customer management concepts, they should be approached cross-functionally instead of limiting them to the domains of marketing and sales.

Originality/value

The study contributes to literature on value capture and customer asset management by providing a framework for managing customer assets for increased value capture that is applicable to business markets and circumvents the majority of challenges associated with the customer lifetime value models.

Details

Management Decision, vol. 52 no. 1
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 4 May 2012

Ary Adriansyah Samsura and Erwin van der Krabben

The purpose of this paper is to provide an understanding of how a phenomenon or process of collective action with regard to the negotiation in value capturing can be…

Abstract

Purpose

The purpose of this paper is to provide an understanding of how a phenomenon or process of collective action with regard to the negotiation in value capturing can be expected to happen in a certain way, which in the end could improve our understanding of value capturing implementation processes.

Design/methodology/approach

Game theory is utilized to model the structure of relations between the actors involved. Game theory is a mathematical approach to study collective decision‐making situations in which the decision makers involved have conflicting preferences. Here, the authors consider the implementation of value capturing as the result of an agreement between a municipality and landowners to contribute to the costs of public infrastructure development which, in essence, is a form of collective action.

Findings

The paper is not only demonstrating the usefulness of game theoretical modelling in conceptualising relations between different stakeholders in the implementation of value capturing and suggesting the best possible strategy for every stakeholder; but also observing the limitations of the methods in analyzing the behaviour of actors involved in decision‐making processes with respect to value capturing.

Originality/value

Unlike most of value capturing studies which focused on either a valuation point of view (how much value can be captured?), a governance or instrumentalist point of view (which instruments can be effective for value capturing?), or a political point of view (to whom belongs the increment value that is the result of government investments or decisions?) – this paper emphasizes an alternative perspective to value capturing, namely the decision‐making or negotiation process underlying value capturing by relying on game‐theoretical approach.

Details

Journal of European Real Estate Research, vol. 5 no. 1
Type: Research Article
ISSN: 1753-9269

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Article
Publication date: 9 August 2021

Claudio Minerbo and Luiz Artur Ledur Brito

The existing literature is fragmented across disciplines and does not provide a holistic, comprehensive view on how value is created, deployed and captured. This paper…

Abstract

Purpose

The existing literature is fragmented across disciplines and does not provide a holistic, comprehensive view on how value is created, deployed and captured. This paper aims to provide a structured view of the current literature and facilitates a theoretical understanding of value creation and capture in buyer–supplier relationships.

Design/methodology/approach

A systematic literature review was conducted on 195 articles published in 21 leading journals in marketing, operations management and strategy disciplines.

Findings

An integrated, generalizable and expandable framework is proposed based on the causal or interactive relationship among four components, namely, dimensions of value creation; processes and interactions by which buyers and suppliers enable value creation; relationship characteristics that affect these components; and value capture. Two new areas for future studies are also suggested.

Research limitations/implications

The findings are based on papers published in peer-reviewed academic literature. Future studies could include more heterogeneous publications in languages other than English and/or professional journals to compare scholars' and managers' perspectives.

Practical implications

This study offers simple, practical guidelines that managers can apply in their real-world situations to increase the value they gain from their relationships.

Originality/value

The framework does not pretend to be exhaustive because such an attempt would be impractical. Rather, this study provides practical examples for each component, and shows how additional concepts and constructs can be incorporated to make it inclusive and generalizable. Two new manners of value capture other than price negotiations are presented (volume and collaborative benefits).

Details

Journal of Business & Industrial Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0885-8624

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Article
Publication date: 5 August 2019

Vince Mangioni

Australia’s Future Tax System (2009) among its recommendations identified the need for realignment of tax revenue across the tiers of government in Australia, as well as…

Abstract

Purpose

Australia’s Future Tax System (2009) among its recommendations identified the need for realignment of tax revenue across the tiers of government in Australia, as well as the need to raise additional revenue from land-based taxes. In achieving these objectives, this paper aims to examine the revenues generated from land and how capital gains tax may be reconceptualised as a value capture tax resulting from the rapid urbanisation of Australia’s cities. The development of a theoretical framework realigns the emerging rationale of a value capture tax, as a means for revenue to be divested from central government in the form of capital gains, to sub-central government as a value capture tax.

Design/methodology/approach

A qualitative research methodology comprising grounded theory and phenomenological research is used in undertaking the review of tax revenue collection from state land tax, conveyance stamp duty, local government rating and Commonwealth capital gains tax. Grounded theory is applied for constant comparison of the data with the objectives of maximising similarities and differences in these revenues with an analytical construct as defined by Strauss and Corbin (1990, p. 61).

Findings

The paper finds that realigning revenue from land-based taxes against the principles of good tax design provides greater opportunity to raise additional revenue to fund public infrastructure while decentralising revenue from central government. It provides an alternate mechanism for revenue transfer from central to sub-central government while conceptually improving own source revenue from value capture taxation as a new revenue source.

Research limitations/implications

The limitation of this paper is the ability to quantify the potential increase that would be generated in the form of value capture revenue. It is demonstrated in the paper that capital gains tax took over 15 years for revenue generation to crystallise, a factor that would likely occur in the potential introduction of a value capture tax for funding transport infrastructure.

Practical implications

The pathway to introducing a value capture tax is through re-innovating capital gains tax as a value capture tax directly hypothecated to funding transport infrastructure that results in the uplift in values of the surrounding property from which revenue is raised.

Originality/value

This paper provides a new approach in contributing to funding the capital outlay of public infrastructure in lieu of central government consolidated revenue allocated through the Commonwealth Grants Commission. It provides a much-needed approach to decentralising revenue from the Commonwealth to sub-central government in Australia which has one of the most centralised tax systems in the OECD.

Details

Journal of Financial Management of Property and Construction , vol. 24 no. 2
Type: Research Article
ISSN: 1366-4387

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Article
Publication date: 12 March 2019

Juan David Gonzalez-Ruiz, Alejandro Arboleda, Sergio Botero and Javier Rojo

The purpose of this paper is to develop an investment valuation model using the mezzanine debt mechanism based on blue bonds that explicitly allude to public–private…

Abstract

Purpose

The purpose of this paper is to develop an investment valuation model using the mezzanine debt mechanism based on blue bonds that explicitly allude to public–private partnerships (P3s) and project finance (PF). Additionally, this study proposes the financial captured value (FCV) theory for measuring how much financial value lenders may capture by becoming sponsors through financing of sustainable infrastructure systems (SIS).

Design/methodology/approach

The investment valuation model was validated through the Aguas Claras wastewater treatment plant as a case study.

Findings

The empirical results show that lenders may capture financial value by converting outstanding debt into equity shares throughout the operation and maintenance stage. Furthermore, case study results provide new insights into the implications of the debt–equity conversion ratio on the relationship between the sponsors’ internal rate of return and the FCV.

Research limitations/implications

The most significant limitation is the lack of primary and secondary information on blue bonds. Thus, robust statistical analyses to contrast results were not possible.

Practical implications

Researchers and practising professionals can improve their understanding of how mezzanine debt, P3s and PF into an investment valuation model allows financing SIS using a non-conventional financial mechanism. The recommendations will benefit both the academia as well infrastructure industry in bridging the gap between design theory and practice.

Originality/value

Sustainability components have not been addressed explicitly or combined in the financing’s structuring. Therefore, the investment valuation model could be considered a novel methodology for decision making related to financing and investment of SIS.

Details

Engineering, Construction and Architectural Management, vol. 26 no. 5
Type: Research Article
ISSN: 0969-9988

Keywords

Content available
Article
Publication date: 1 June 2021

Yihua Chen, Ivanka Visnjic, Vinit Parida and Zhengang Zhang

The authors seek to understand the process of digital servitization as a shift of manufacturing companies from the provision of standard products and services to smart…

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1495

Abstract

Purpose

The authors seek to understand the process of digital servitization as a shift of manufacturing companies from the provision of standard products and services to smart solutions. Specifically, the authors focus on changes in the business model (i.e. the value proposition, the value delivery system and the value capture mechanism) for digital servitization.

Design/methodology/approach

The authors examine a Chinese air conditioner manufacturer, Gree, who became the global leader with their smart solutions. These solutions included performance-based contracts underpinned by artificial intelligence (AI)-powered air conditioners that automatically adjust to environmental changes and are capable of remote monitoring and servicing thanks to its Internet of things (IoT) technology.

Findings

To successfully offer smart solution value propositions, a manufacturer needs an ecosystem value delivery system composed of suppliers, distributors, partners and customers. Once the ecosystem relationships are well aligned, the manufacturer gains value with multiple value capture mechanisms (i.e. efficiency, accountability, shared customer value and novelty). To arrive at this point, a manufacturer has to pass through different stages that are characterized by both discontinuous and continuous interplay between business models and digital technologies. At the beginning of each stage, new value propositions and value delivery systems are first discontinuously created and then enabled with digital technology. As a result, new value capture mechanisms are activated. Meanwhile, the elements of the existing business model are continuously improved.

Research limitations/implications

By combining process-perspective and business-model lenses, the authors offer nuanced insights into how digital servitization unfolds.

Practical implications

Executives can obtain insights into the business model elements, they need to change over the course of digital servitization and how to manage the process.

Originality/value

A longitudinal case study of a traditional manufacturer that has achieved stellar success through digital servitization business models development.

Details

International Journal of Operations & Production Management, vol. 41 no. 5
Type: Research Article
ISSN: 0144-3577

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