Value creation and value capture with frictions

107Citations
Citations of this article
350Readers
Mendeley users who have this article in their library.
Get full text

Abstract

We use a formal value-based model to study how frictions-incomplete linkages in the industry value chain that keep some parties from meeting and transacting-affect value creation and value capture. Frictions arise from search and switching costs and moderate the intensity of industry rivalry and the efficiency of the market. We find that firms with a competitive advantage prefer industries with less, but not zero, frictions. We show that rivalry interacts nontrivially with other competitive forces to affect industry attractiveness. Firm heterogeneity emerges naturally when we introduce resource development. Heterogeneity falls with frictions, but the sustainability of competitive advantage increases. Overall, we show that introducing frictions makes value-based models very effective at integrating analyses at the industry, firm, and resource levels. Copyright © 2011 John Wiley & Sons, Ltd.

Cite

CITATION STYLE

APA

Chatain, O., & Zemsky, P. (2011). Value creation and value capture with frictions. Strategic Management Journal, 32(11), 1206–1231. https://doi.org/10.1002/smj.939

Register to see more suggestions

Mendeley helps you to discover research relevant for your work.

Already have an account?

Save time finding and organizing research with Mendeley

Sign up for free