Toward a Differentiated Understanding of the Value‐Creation Chain

AuthorChristian Homburg,Matthias Staritz,Christina Kuehnl,Andreas Fürst
Published date01 July 2017
DOIhttp://doi.org/10.1111/1467-8551.12206
Date01 July 2017
British Journal of Management, Vol. 28, 444–463 (2017)
DOI: 10.1111/1467-8551.12206
Toward a Dierentiated Understanding of
the Value-Creation Chain
Christina Kuehnl, Andreas F¨
urst,1Christian Homburg2
and Matthias Staritz3
Department of Marketing, Innovation& Design, ESB Business School, University of Reutlingen,
72762 Reutlingen, Germany, 1Friedrich-AlexanderUniversity Erlangen-N ¨
urnberg, Germany, 2Institute for
Market-Oriented Management, University of Mannheim, 68131 Mannheim, Germany,and 3QuintilesIMS,
Darmst¨
adter Landstraße 108, 60598, Frankfurt/Main, Germany
Corresponding author email: ckuehnl@gmx.de
The conventional view of the value-creation chain suggests oering high-value proposi-
tions at the product level (in terms of benefits provided by elements of the product) to
attain high-value perceptions at the customer level, which should ultimately result in
high-value appropriation at the firm level (i.e. relationship, volume, pricing and finan-
cial success). This study challenges this view and providesa dierentiated understanding
of the value-creation chain. With a multi-industry sample of 339 companies and a sam-
ple of 626 customers to validate managerial assessments, the authors apply a configura-
tional approach to identify whether and to what extent oering high-value propositions
at the product level is necessary or sucient for achieving superior value perceptions at
the customer level and high-value appropriation at the firm level. Taking into account
the company-internal and company-external environmentof the value-creation chain, the
study identifies seven value-creationchain constellations.
Introduction
For some time, practitioners and researchers have
considered the creation of products that oer cus-
tomers superior value propositions to be a nec-
essary condition for achieving firm value (e.g.
Blocker, 2011; Ngo and O’Cass, 2009; Payne and
Holt, 2001). Companies therefore invest heavily in
product-related elements such as product design,
special product features, or supplementary services
that are aimed at oering superior products (e.g.
Blocker et al., 2011). By making this investment
at the product level, firms are following the com-
monly accepted belief in the value-creation chain
that oering a superior value proposition at the
product level (in terms of benefits provided by ele-
ments of the product) will translate into high-
value perceptions at the customer level and subse-
quently into high-value appropriation at the firm
level (Payne and Holt, 2001).
However, common business practice oers a
mixed picture of whether the value-creation chain
always holds true. While for some companies,
such as Apple Inc. or Google, oering a supe-
rior value proposition at the product level seems
to be associated with high-value perceptions at
the customer level and high-value appropriation
at the firm level (e.g. in terms of favorable finan-
cial or relationship success), for other companies a
totally dierent pattern prevails. For example, in-
dependent experts stated that car models such as
the Audi A2 or the Opel Insignia oered a supe-
rior value proposition atthe product level based on
the evaluation of, among others, performance cri-
teria such as fuel consumption (e.g. Bremner, 2015;
English, 2008). However, these models failed to at-
tain significant value perceptions at the customer
level, leading to relatively low value appropriation
at the firm level, such as low financial success. In
contrast, other firms seem to attain considerable
© 2016 British Academy of Management. Published by John Wiley & Sons Ltd, 9600 Garsington Road, Oxford OX4
2DQ, UK and 350 Main Street, Malden, MA, 02148, USA.
Understanding of the Value-Creation Chain 445
value appropriationat the firm level without either
oering a superior value proposition or achiev-
ing superior customer value perceptions (Fortune,
2014).
While the value and value-creation litera-
ture is unquestionably very rich (Kumar and
Reinartz, 2016; Payne and Holt, 2001; S´
anchez-
Fern ´
andez and Iniesta-Bonillo, 2007; Smith and
Colgate, 2007), prior literature does not con-
sider the above-mentioned discrepancies in the
value-creation chain among companies. In this
respect, ‘aligning the customer-perceived value
with customer-generated value . . . is a research
challenge that needs careful and comprehensive
attention’ (Kumar and Reinartz, 2016, p. 4).
Instead, studies on value creation seem to suggest
that proposing value at the product level is linked
to a favorable outcome for companies and that, to
attain a high-value appropriation at the firm level,
companies need a superior value proposition at
the product level (e.g. Woodru, 1997). Thus, the
literature says little on the questions of whether
and, if so, to what extent and under whichcircum-
stances oering superior value propositions at
the product level is truly necessary for high-value
appropriation at the firm level.
Two major reasons explain this gap in research.
First, from a content perspective, prior studies
typically either focus on selected activitiesto create
value or oer a good understanding of selected
relationships between two distinct levels of the
value-creation chain (e.g. Blocker et al., 2011;
Bowman and Ambrosini, 2000; Ngo and O’Cass,
2009; O’Cass and Sok, 2015; Payne and Holt,
2001). Therefore, with some notable exceptions
(e.g. O’Cass and Ngo, 2011; O’Cass and Sok,
2015; Sok and O’Cass, 2011), previous studies do
not consider value at the product, customer and
firm levels simultaneously, but investigatethe com-
plex phenomenon in a somewhat fragmented way
(Flint, Woodru and Gardial, 2002; Helkkula,
Kelleher and Pihlstrom, 2012). Acknowledging
this limitation, scholars call for more research
that considers all levels of the value-creationchain
(Kumar and Reinartz, 2016; Marketing Science
Institute, 2014; Ngo and O’Cass, 2010; O’Cass
and Sok, 2015).
Second, from a methodological perspective,
scholars complain that many studies are con-
ceptual in nature and call for further empirical
studies that consider several stakeholders of the
value-creation chain (Gr¨
onroos and Voima, 2013;
O’Cass and Ngo, 2011). Empirical work on value
creation typically relies on analyses of depen-
dence, such as regression analysis or structural
equation modeling (Mizik and Jacobson, 2003;
O’Cass and Ngo, 2011; O’Cass and Sok, 2013,
2015; Sok and O’Cass, 2011). These analyses
deliver valuable insights on the average strength of
relationships between selected variables across all
companies under investigation. However, they
do not suciently account for the potential
inter-company heterogeneity in the strength of
these relationships. Rather, the components of
the value-creation chain should be considered
as ‘multivariate profiles of various dimensions
that fit together in various ways in dierent
contexts’ (Wong, Wilkinson and Young, 2010, p.
721). Specifically, these analyses do not allow for
examination of holistic patterns of key variables
of the value-creation chain. Investigating ‘holistic
patterns of multiple variables rather than isolated
variables and their bivariate relations’ (Homburg,
Workman and Jensen, 2002, p. 39) requires a
taxonomic approach, which considers the variety
of theoretically possible value-creation chain
constellations and identifies the most commonly
occurring specific value-creation chain archetypes
(Ketchen et al., 1997). As such, taxonomies play
a major role in the theory development of many
research areas (Biggemann and Buttle, 2012;
Meyer, Tsui and Hinings, 1993; Wong, Wilkinson
and Young, 2010). The value of this approach to
research and theory building is that it allows the
identification of types of relationships not possible
with other methods.
Given the outlined research gap and related
shortcomings, our study addresses the questions
of (1) whether and, if so, to what extent, oer-
ing superior value propositions atthe product level
is indeed necessary to attain superior value per-
ceptions at the customer level and high-value ap-
propriation at the firm level, and (2) under what
circumstances this is the case. For this purpose,
we combine the discourse on the value-based view
with key ideas of service-dominant logic (Vargo
and Lusch 2004) and drawon configuration theory
to develop a conceptual framework that captures
the product, customer and firm levels of the value-
creation chain as well as its company-internal and
company-external environmental factors.
Employing this framework, a multi-industry
sample of 339 companies, and a sample of 626
customers to validate managerial assessments,
© 2016 British Academy of Management.

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