Chapter 6: Value Creation, Business Models and Organization Design in a Digital World

Abstract

In most industries, the competitive landscape is rapidly changing and, as a result, companies are speeding through their life cycles at an unprecedented pace. Whole industries are being transformed-media and entertainment, energy-and the changing positions within industries are greater than ever. Digital is the main driver of the current changes. It affects all aspects of how customers behave and how companies create and capture value. We suggest that these technological changes call for the renewed importance in understanding both value creation and principles of organization. Our aim is to address how value creation and organization design is affected by digitization-the opportunities and challenges that digitization presents. We organize our discussion around the concepts "business model" and "organization design" respectively. A business model describes how a company creates and appropriates value (Ches-brough and Rosenbloom, 2002; Teece, 2010). We distinguish between an operational and dynamic dimension of business models (Fjeldstad and Snow, 2018). The operational dimension of a business model describes how a firm creates value for customers by performing activities, and how it appropriates a share of the value created. The operational dimension reflects choices about target customers 1.