Working Papers, Hanken School of Economics
Re-Conceptualizing Value-Creation From Industrial Business Logic to Service Business Logic
Abstract: There is an urgent interest in marketing to move away from
neo-classical value definitions suggesting that value creation is a process
of exchanging goods for money.
In the present paper, value creation is
conceptualized as an integration of two distinct, yet closely coupled
processes. First, actors co-create what this paper calls an underlying
basis of value. This is done by interactively re-configuring resources. By
relating and combining resources, activity sets, and risks across actor
boundaries in novel ways actors create joint productivity gains – a concept
very similar to density (Normann, 2001).
Second, actors engage in a
process of signification and evaluation. Signification implies
coconstructing the meaning and worth of joint productivity gains co-created
through interactive resource re-configuration, as well as sharing those
gains through a pricing mechanism as value to involved actors.
conceptual framework highlights an all-important dynamics associated with
´value creation´ and ´value´ - a dynamics the paper claims has eluded past
The paper argues that the framework presented here
is appropriate for the interactive service perspective, where value and
value creation are not objectively given, but depend on the power of
involved actors´ socially constructed frames to mobilize resources across
actor boundaries in ways that ´enhance system well-being´ (Vargo et al.,
The paper contributes to research on Service Logic,
Service-Dominant Logic, and Service Science.
Keywords: value creation; value co-creation; value; service; service logic; service-dominant logic; service science; (follow links to similar papers)
19 pages, December 1, 2010
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