What question did this study set out to answer?

To establish formal definitions of value creation and added value using cooperative game theory, determining the theoretical upper bounds of value capture for competitive firms.

March 1, 1996Journal of Economics & Management Strategy

Value‐based Business Strategy

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Authors

ABAdam BrandenburgerSupélec HSHarborne W. StuartHarvard University

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Implication

Theoretical analysis demonstrates that firm value capture is bounded by added value across markets, highlighting the equal strategic importance of supplier and buyer relations.

Key Points

To establish formal definitions of value creation and added value using cooperative game theory, determining the theoretical upper bounds of value capture for competitive firms.
Applied cooperative game theory to model economic exchanges between interacting networks of firms, suppliers, and buyers.
Formulated mathematical definitions of total value created and a firm's added value within a market system.
Demonstrated that a firm's added value establishes an absolute upper bound on the amount of value it can capture.
Identified four distinct strategic routes that generate the firm asymmetries necessary to sustain a positive added value.
Showed that cultivating supplier relations is symmetrically equivalent in strategic importance to managing buyer relations for capturing value.

Cite This Study

Brandenburger et al. (1996) studied this question.

synapsesocial.com/papers/6a104f3c10ed65f1d0fca640 https://doi.org/10.1111/j.1430-9134.1996.00005.x

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Implication

Theoretical analysis demonstrates that firm value capture is bounded by added value across markets, highlighting the equal strategic importance of supplier and buyer relations.

Value‐based Business Strategy

Discussion

Member takes

Implication

Key Points

Cite This Study

Value‐based Business Strategy

Discussion

Member takes

Implication

Key Points

Cite This Study

Also Consider

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