Triadic Value Propositions: When It Takes More Than Two to Tango

Abstract

Value propositions are reciprocal resource-integration promises and value alignment mechanisms, operating to and from actors seeking an equitable exchange. In a business triad, any change in the relationship between two actors also affects relationships with the third actor, influencing resource integration and value creation at the value constellation level. This study of the development of a triadic value proposition analyzes how the discontinuous effects of a new service initiative alter the relationships among actors in a manufacturerdealer-user triad. A qualitative empirical inquiry examines a ten-year process, in which a leading industry incumbent enters the service business by crafting a triadic value proposition.As the value proposition evolves over time, the network ties-and thus the interdependence among manufacturer, dealer, and user-strengthen. The findings offer firms a better understanding of how to involve and collaborate with key actors to initiate discontinuous changes at the firm and network levels. These insights are particularly timely in light of the difficulties that product firms face when intermediaries are decisive for the success of their service-led growth initiatives.Keywords: value proposition; network ties; relationship development; service systems; case study application Application abstractDeveloping a value proposition is a critical strategic issue for marketing managers. Even as competitive advantage increasingly appears in networked business models though, the concept of the value proposition has yet to be extended to multilateral settings. For example, studies of service-led growth in industrial contexts often focus on the manufacturer and customer but omit service partners as critical actors. The authors therefore suggest a triadic value proposition and analyze how such value propositions might evolve over time in an industrial context, a setting in which service partners' performance often is a foundation for manufacturer success. Substantial adjustments to the arrangement between two parties likely influence what can be proposed to the third, which makes collaboration with all parties necessary to initiate any discontinuous change at the network level. To make this concept more actionable, the authors also illustrate how managers might approach the task of crafting triadic value propositions. The insight for management is straightforward: By adopting a triadic perspective while developing the value proposition, companies can increase the viability of their service system and provide a more compelling market offering.3

Introduction to the Special Issue on Multiactor Value Creation in Service Innovation: Collaborative Value Creation in Service

“…This research sheds new light on service innovation by providing insights on the comparative impact of different types of collaboration in service innovation. Kowalkowski et al (2016) investigate triadic value propositions, which bring an interesting perspective to collaborative value creation. Triadic value propositions make an example of reciprocal resource-integration promises and value alignment mechanisms.…”

How do sales and marketing produce business to business value propositions?

“…Capabilities seem to be discussed at an organisational level, not at the actor-level, which is the concern of my thesis. Kowalkowski et al (2016) The study followed the Industrial Marketing and Purchase Group (IMP) view that triads represent complex market configurations of independent firms that connect through network ties, either directly, or indirectly, to do business. These ties can be structural, economic, or social in character (Hakansson & Snehota 1990).…”

“…Even the IMP literature seems to regard them as part of a holistic entity that is 'the organisation' without consideration of the interactions that take place within the SMI at the initialization, development and launch phases (Kowalkowski et al 2016).…”

“…Here value propositions are part of a negotiation process between actors. Through discussion and dialogue during the development stage actors can agree on a value proposition (Hilton et al 2012;Kowalkowski et al 2016). …”

“…The value proposition literature often talks about value propositions as is they are static things that manifest themselves, without any human element in their creation (Johnston 2014). Also of significance for the SMI is the notion that value propositions are seen to be negotiable at the customer interface (Hilton et al 2011;Kowalkowski et al 2016). …”