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Exploiting the control revolution by means of digitalization: Value creation, value capture, and downstream movements
Department of Technology Management and Economics, Chalmers University of Technology, Göteborg, Sweden.
Halmstad University, School of Business, Engineering and Science, Centre for Innovation, Entrepreneurship and Learning Research (CIEL).ORCID iD: 0000-0002-0560-7392
2019 (English)In: Industrial and Corporate Change, ISSN 0960-6491, E-ISSN 1464-3650, Vol. 28, no 3, p. 423-436, article id dty022Article in journal (Refereed) Published
Abstract [en]

This article explains why firms move downstream to profit from the value they create for customers through improved control. Under certain circumstances, product innovations and services are dynamically interdependent in the sense of improved control creating value for the customer. Since value capture is distinct from value creation, firms may need to change their means of appropriation to profit. Empirically, the article analyses how firms can renew their product offerings by incorporating control technologies into their traditional mechanical engineering products. In contrast to a strand in the recent strategy literature that argues that manufacturing firms should move downstream to deliver complementary services, this article explains these shifts as related to increased control, economies of throughput, value creation, and value capture. The article contributes to the throughput and control technology literature by showing the importance of differentiating value creation from value capture. The increased control by means of digitalization and the discrepancy between value creation and value capture explains why many manufacturing firms will become service firms.

Place, publisher, year, edition, pages
Oxford: Oxford University Press, 2019. Vol. 28, no 3, p. 423-436, article id dty022
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Other Engineering and Technologies not elsewhere specified
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URN: urn:nbn:se:hh:diva-38607DOI: 10.1093/icc/dty022OAI: oai:DiVA.org:hh-38607DiVA, id: diva2:1270656
Available from: 2018-12-14 Created: 2018-12-14 Last updated: 2019-05-17Bibliographically approved

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CiteExportLink to record
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Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
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Output format
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  • asciidoc
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