Total value in business relationships: exploring the link between power and value appropriation

Abstract

Purpose: The purpose of this paper is to consider how value can be better defined and to understand the drivers of value appropriation in business relationships. In doing so, we explore the role that power plays in determining the sharing of value in those relationships.Design/methodology/approach: A conceptual discussion about value and the appropriation of value in business relationships, which leads to the development of a methodology for assessing the sharing of value.Findings: In this paper we have developed our view of total value in supply chain relationships. We argue that the value of the relationship is the sum of the customer and supplier value, including both tangible and intangible benefits and sacrifices. In addition, we maintain that the appropriation of value in a business relationship is reliant upon: 1) the power both parties possess; 2) the direct and tangible value each party has to offer; and, 3) the indirect and intangible value that each has to offer. We also provide a methodology, which can be used to determine the sharing of value between two actors within a business exchange. Research limitations/implications:In arriving at our conceptualisation of total value and in our discussion of value appropriation in business relationships, we drew upon extant literature. However, a limitation is that we were unable to fully consider all the academic discourse centred on value and value appropriation.Originality/value: The discussion brings together the issues of customer value and supplier value to the concept of 'total value'. Thereafter, it links the contentious issue of buyer and supplier power, so as to better understand the appropriation of value in business relationships.2

Towards a better understanding of organizational buying behavior across cultures: empirical evidence from the Arabian Gulf

“…Given that there is a clear reconfiguration of the industrial marketing focus from advanced economies towards developing markets (Wiersema, 2013), there is an urgent need for a concerted research effort to examine OBB processes in newer and emerging business environments. Current thinking in the field suggests that this can be achieved by examining whether and how industrial marketers establish appropriate relationships (Chicksand and Rehme, 2018) with the key decision-makers in the buying organizations (Järvi and Munnukka, 2009). This, however, can become an Achilles' heel in cross-cultural contexts.…”

Must have or nice to have

“…Hence, creating a strong personal connection through salesperson interactions (Singh and Venugopal, 2015) is integral to the organizational buying process (Kemp et al, 2018). Customer solutions in business-tobusiness (B2B) selling require the sales person to have deeper customer insights (Chicksand and Rehme, 2018;Ulaga and Reinartz, 2011). They also require a fundamental shift in focus from quality and price to total cost of ownership (Monczka et al, 2016;Sheth et al, 2009;Snelgrove and Stensson, 2017;Vitasek, 2017aVitasek, , 2017b, which, in turn, demands that sales people work with focus on long-term customer development (Dixon et al, 2001;Timo et al, 2018).…”

“…They also require a fundamental shift in focus from quality and price to total cost of ownership (Monczka et al, 2016;Sheth et al, 2009;Snelgrove and Stensson, 2017;Vitasek, 2017aVitasek, , 2017b, which, in turn, demands that sales people work with focus on long-term customer development (Dixon et al, 2001;Timo et al, 2018). In this study, we discuss the concept of value and the drivers of value appropriation in business relationships (Chicksand and Rehme, 2018). Customer value is expressed as the monetary benefits accrued which improve the buyer's revenue (Anderson and Narus, 1998;Brandenburger and Stuart, 1996).…”

Operational Excellence as the Main Customer Value: Information Technology Vendors' Perspective

“…IT strategy is concerned with IT supply (Peppard and Ward, 2016). Thus, vendors of IT products play a pivotal role in both IT strategies (Ward, 2012) and value delivery (Chicksand and Rehme, 2018). Their products must meet the requirements specified by enterprises (IIBA, 2015), and they are a source of innovation for introducing new products in enterprises (Vishnevskiy, Karasev, and Meissner, 2016).…”