What Do Business Customers Value? An Empirical Study of Value Propositions in a Servitization Context

Abstract

This study was conducted in response to calls from the research community and industry for a greater empirical exploration of value propositions. Purpose/Research question:The paper provides an empirical research of theSamsung case. In particular, we study the case by adopting three frameworks:dynamic capabilities (DC, examined by using the sensing/seizing/transformingapproach), business model (BM, examined by using the BM canvas), and customervalue proposition (CVP), examined by using the PERFA ((Performance, Ease of use,Reliability, Flexibility, and Affectivity) framework. The aim is to demonstrate that threeframeworks successfully explain Samsung competitive advantage. Research questionhas been defined as follows: how dynamic capabilities actually operate in SamsungGroup and contribute to its competitive advantage?Key literature reviews:Dynamic capabilities enable a firm to identify and orchestratethe necessary resources for designing and implementing a business model that will, ifemployed in conjunction with a good strategy, be associated with high levels ofsustainable profits. The selection/design of business models is a key micro foundationof dynamic capabilities - the sensing, seizing, and reconfiguring skills that the businessenterprise needs if it is to stay in synch with changing market. However, there are fewexamples how successful ICT industry players design dynamically their“signaturebusiness model”by Teece (The Academy of Management Perspectives 28:(4)328–352,2014) that can support durable competitive advantage.Design/Methodology/Approach:This proposed research seeks to explore criticalaspects pertaining micro foundations of DC. In this research, two stages of researchwork will be involved. The first stage is deductive case studies research. We relied onan extensive archival search that included financial statements, annual reports, internaldocuments, industry publications, andCEO statements to get at a micro-levelunderstanding (Barr et al., 1992), that really boosts our data and better understandingof micro foundation of DC. The second stage involves a demonstration of developmentprocess of new conceptual model of research.Findings/Results:The research question of current paper has been answeredempirically by using data of world leading ICT industry: Samsung Group. What we canlearn beyond the ICT industry context from our analysis in terms of generalization ofour research results is that the synchronization of business models with the businessenvironment is a critical role of dynamic capabilities in successful organizations. Theconversion of value delivered to the customer into value captured by the enterprise isarguably the essence of a business model