Value creation logics and internationalization of service firms

  • Jensen P
  • Petersen B
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Abstract

Access to this document was granted through an Emerald subscription provided by 422267 [] For Authors If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.com Emerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services. Abstract Purpose – While mainstream theories in international business and management are founded either explicitly or implicitly on studies of manufacturing firms, prior attempts to develop theory on the internationalization of service firms are sparse and have yet to establish solid and comprehensive frameworks. The thrust of this study is that value creation logics, a construct originally developed by Stabell and Fjeldstad (1998) can assist us in better understanding why and how service firms internationalize. The authors extend this construct and propose that the internationalization of service firms must be based on a thorough understanding of the fundamental nature of these firms. Design/methodology/approach – Theoretical study. Findings – The authors put forward propositions concerning the pace of internationalization and the default foreign operation modes in service firms. Research limitations/implications – The use of value creation logics can be a useful complement to the conventional approaches to the study of service firms' internationalization. However, the fact that most firms encompass more than one value creation logic complicates the use of firm databases and industry statistics. Practical implications – The authors suggest that managers in service firms should consider primarily the nature of the value creation logic(s) in their firms when deciding and designing an internationalization strategy. Originality/value – The study presents a novel theoretical approach and a set of propositions on service firm internationalization founded on the specific characteristics of the service activities. 1. Introduction Since its introduction in 1985 the value chain of Michael Porter (1985) has been a key concept and the standard template in the study of value creation processes of firms. However, as Stabell and Fjeldstad (1998) point out, the value chain designates first and foremost the value creation logics of manufacturing firms and less so the logics of service firms. The value chain signifies operations in which raw materials are transformed to semi-manufactured or further on to finished, physical goods. The primary value chain activities define themselves in a certain sequential order of upstream and downstream activities. Service firms like banks, insurance companies, and telecommunication firms do not fit this value chain logic very well. Value creation logics other than the value chain have therefore been warranted for a better understanding

Author-supplied keywords

  • International business
  • International management
  • Internationalization
  • Services
  • Strategy
  • Value chain

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