How do Value Creation and Competition Determine Whether a Firm Appropriates Value?

MacDonald, Glenn; Ryall, Michael D.

doi:10.2139/ssrn.283225

Cited by 71 publications

(96 citation statements)

References 16 publications

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“…While the RBV has a long tradition of formal models (e.g. Lippman & Rumelt, 1982;Makadok, 2001;Lippman & Rumelt, 2003;Denrell, 2004;MacDonald & Ryall, 2004), these contributions appear to represent a fringe rather than a widely accepted theoretical core of RBV thinking. For example, it is unclear how a standard model in the RBV looks like that connects differential resource advantage to product market competition (e.g., Klepper & Simmons 2000), although this issue is beginning to be explored (Asmussen, 2010;Makadok, 2010).…”

Section: Discussionmentioning

confidence: 99%

“…In fact, recent advances within this branch of the RBV make use of the language of game theory (Lippman & Rumelt, 2003;MacDonald & Ryall, 2004;Adegbesan, 2009) that has supplanted the reliance on competitive equilibrium in economics as the main vehicle of analytical development. 4 In fact, it is arguable that many RBV contributions have already been pushing the envelope quite significantly.…”

Section: Movement Towards the Middle?mentioning

confidence: 99%

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Modern Resource-based Theory(ies)

Foss¹,

Stieglitz²

2012

Handbook on the Economics and Theory of the Firm

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Section: Discussionmentioning

confidence: 99%

Section: Movement Towards the Middle?mentioning

confidence: 99%

Modern Resource-based Theory(ies)

Foss¹,

Stieglitz²

2012

Handbook on the Economics and Theory of the Firm

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“…For instance, use of these notions was instrumental in clarifying central theoretical concepts in the resource-based view (Hoopes, Madsen, and Walker, 2003;Leiblein, 2011;Lippman and Rumelt, 2003). By jointly analyzing value creation and value capture, the value-based framework has provided a structure for linking firm performance and demand characteristics (Adner and Zemsky, 2006;Priem, 2007) and has led to novel insights on how value is captured under competition (MacDonald and Ryall, 2004). This framework has been used to study drivers of strategic advantages in various contexts such as factor markets (Adegbesan, 2009), product markets (Chatain and Zemsky, 2011), and networks (Ryall and Sorenson, 2007).…”

Section: Introductionmentioning

confidence: 99%

Estimating Value Creation from Revealed Preferences: Application to Value-Based Strategies

Chatain

Mindruta

2016

SSRN Journal

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Research summary: We develop and apply a new set of empirical tools consistent with the tenets of valuebased business strategies, leveraging the principle that "no good deal comes undone" and the methods of revealed preferences, to empirically estimate drivers of value creation. We demonstrate how to use these tools in an analysis of value creation in buyer-supplier relationships in the UK corporate legal market. We show that our approach can uncover evidence of subtle mechanisms that traditional methods cannot easily distinguish from each other. Furthermore, we show how the estimates can be used as parameters of biform games for outof-sample analyses of strategic decisions. With readily available data on relationships between firms, this approach can be applied to many other contexts of interest to strategy researchers.Managerial summary: Managers need to understand the drivers of value creation for customers in order to make competitive positioning decisions and understand when they can capture value under competition. However, estimates of the relative importance of each driver are typically difficult to obtain. In this article, we help remedy this problem by demonstrating a novel method that obtains estimates of the contribution of various drivers of value creation from commonly available data of buyer-supplier relationships. These estimates can then be used to inform the strategy-making process. Research abstractWe develop and apply a new set of empirical tools consistent with the tenets of value-based business strategies, leveraging the principle that "no good deal comes undone" and the methods of revealed preferences, to empirically estimate drivers of value creation. We demonstrate how to use these tools in an analysis of value creation in buyer-supplier relationships in the UK corporate legal market. We show that our approach can uncover evidence of subtle mechanisms that traditional methods cannot easily distinguish from each other. Furthermore, we show how the estimates can be used as parameters of biform games for out-of-sample analyses of strategic decisions. With readily available data on relationships between firms, this approach can be applied to many other contexts of interest to strategy researchers.Word count: 125 words.Keywords: value-based strategy, revealed preferences, cooperative game theory, buyer-supplier relationships, client-specific economies of scope Managerial abstractManagers need to understand the drivers of value creation for customers in order to make competitive positioning decisions and understand when they can capture value under competition. However, estimates of the relative importance of each driver are typically difficult to obtain. In this paper, we help remedy this problem by demonstrating a novel method that obtains estimates of the contribution of various drivers of value creation from commonly available data of buyer-supplier relationships. These estimates can then be used to inform the strategy-making process.Word count: 84 words.3

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“…The alliance literature reflects the presence of both benefits 43 and risks associated with inter-firm arrangements. The firm sharing information with partners is potentially putting itself at a disadvantage if the receiving firm can misappropriate the information .As highlighted by MacDonald and Ryall (2004), a fundamental question in business strategy is: "How does competition among economic actors determine the value each appropriates?". Porter (1980) says that the essence of strategy formulation is coping with competition.…”

mentioning

confidence: 99%

“…As highlighted by MacDonald and Ryall (2004), a fundamental question in business strategy is: "How does competition among economic actors determine the value each appropriates?". Porter (1980) says that the essence of strategy formulation is coping with competition.…”

mentioning

confidence: 99%

Supplier-Buyer Networks and Buyer's Innovation

Ahuja

Boccardelli

D'Alise

2013

AMPROC

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To my family, my brother-in-law Paolo, and to Valerio with infinite gratitude for reasons they know well ACKNOWLEDGMENTSNow that I am at the end of the path of my PhD program, it is a pleasure to contemplate this important and meaningful experience. At the same time, I would like to show my gratitude for the great care and the support that I received from numerous people at different periods of time. It has been both an exacting and educational journey, and I was lucky to have had the pleasure of meeting and interacting with so many eminent professors, some of whom were members of the dissertation committee. They have made essential and precious contributions to my growth. To those people, I would like to express my deepest gratitude.First and foremost, I would like to thank Professor Fontana, an outstanding figure and my point of reference even before I began the doctorate program. During the degree course and under his guidance, I was able to approach and accomplish my first thesis experiences; without him, I would never have started my PhD program. Since he encouraged me to pursue my present research path, he played a decisive role in my choice. I had the opportunity to benefit from his experience and reassuring guidance.The fulfillment of this work was made possible thanks to my very good interaction with the members of my dissertation committee.I am particularly grateful to Professor Boccardelli for several important reasons. He helped me to achieve a crucial breakthrough in my studies, and it is in large part due to him that I have achieved results. As Director of the Doctoral Program, he undertook a leading role in the orientation process. I would like to thank him for his psychological support and firm encouragement: he always expressed faith in my abilities when sometimes I was in doubt. During some crucial steps in the execution of my work, his valid intervention helped me to find solutions and persevere. His essential contributions induced me to find alternatives to some points in a lasting and fruitful exchange of ideas. He played a decisive role during the difficult starting steps when I was identifying and defining my research problem and he made the difference when suggesting how to direct my ideas towards goals. Furthermore, he helped me to define the model by turning my attention to key matters combining a pragmatic approach with the capability of seizing shades. During the final stage, he provided advice about data processing. On several occasions, he made time to answer to my questions. I also owe a debt of thanks to him for my wonderful opportunity to conduct my research for this thesis at the University of Michigan for a year. It has been an absorbing and educational experience. Professor Boccardelli has been and will remain an important point of reference.I will never be able to fully thank Professor Ahuja for having assisted me during this long period at his university. It is an honor that he agreed to be part of my dissertation committee. I owe a great debt to him for all of the opportuni...

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How do Value Creation and Competition Determine Whether a Firm Appropriates Value?

Cited by 71 publications

References 16 publications

Modern Resource-based Theory(ies)

Modern Resource-based Theory(ies)

Estimating Value Creation from Revealed Preferences: Application to Value-Based Strategies

Supplier-Buyer Networks and Buyer's Innovation

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