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Value and Business Models


Value is the description of the ‘goodness’ of something; be it a person, an idea, a product, an activity or anything else. It is perceived and determined by the describer on the basis of “goodness-in-use” and therefore is relative to the context, experience and idiosyncrasies of the describer.


The concept of value has been discussed for over two thousand years with various nuanced meanings.

In recent years, researchers such as Holbrook (1994; 1999; 2006) have written extensively about value as a focal concept. Similarly, the American Marketing Association has also made value the central concept in its last two definitions of marketing, replacing the “product” as the object of exchange.

In a series of publications on the Service-Dominant (S-D) logic, Vargo and Lusch (2004: 2008) review the economic foundations that underpin how we understand value creation. In doing so, they suggest value is always uniquely and phenomenologically determined by the beneficiary. Therefore first, the provider cannot deliver value but only offer value propositions, and second, the customer is always a co-creator of value and therefore a customer’s value-creating processes and resources affect the success of a provider’s value proposition.

Given this orientation, and since the context of value creation is not within the provider’s control, business models for value co-creation present itself as a major challenge in designing and managing service systems.




Research Lead

Irene Ng






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