[Note: This is the 14th post in our “Papers in Brief” series. This series offers a special service as it explains the core ideas of chosen research papers in a nutshell.]

Papers in Brief (XIV) by Doroteya Vladimirova

Yang, M.; Evans, S.; Vladimirova, D. & Rana, P. (2017): Value uncaptured perspective for sustainable business model innovation, Journal of Cleaner Production, Vol. 140, pp. 1794-1804, https://doi.org/10.1016/j.jclepro.2016.07.102.

To date, business models have been examined mostly from the perspectives of value proposition, value creation, value delivery, and value capture (e.g. Richardson, 2008). Some new concepts, such as value missed and value destroyed, have emerged from recent research into business model tools (e.g. Bocken et al., 2013; Evans et al., 2013; Yang et al., 2014). These concepts have been effectively used in sustainable business model innovation in practice, but how they theoretically explain the innovation of business models is not well understood.

In this paper, we propose the concept of ‘value uncaptured’, the potential value that could be captured but has not yet been captured, as a new perspective for sustainable business model innovation. We argue that, once identified, value uncaptured can trigger the discovery of new opportunities for value creation, delivery and capture, and therefore lead to innovation of business models. We elaborate on the four forms of value uncaptured (i.e. value surplus, value absence, value missed and value destroyed), and identify the main sources of value uncaptured across the product life cycle based on empirical studies.

We develop a framework for applying value uncaptured as a lens for sustainable business model innovation (Fig.1). This framework proposes that sustainable business model innovation can be more easily achieved by identifying the value uncaptured in current business models, and then transforming the value uncaptured into opportunities that can lead to new business models. In the context of sustainability, the value covers not only monetary value, but also wider aspects of value for the environment and for society. Furthermore, value is related not only to customers and the firm, but also to other stakeholders, such as end users, suppliers, shareholders, government and partners.

Fig 1. Value uncaptured as a lens for sustainable business model innovation

Value uncaptured exists in almost all companies. Some value uncaptured is visible, e.g. waste streams in production, co-products, under-utilised resources, and reusable components of broken products, but more often it is invisible, e.g. overcapacity of labour, insufficient use of expertise and knowledge. To better understand the concept of value uncaptured, we propose an interpretation of the four forms of value uncaptured (Fig 2).

Fig. 2. Forms of value uncaptured

In this research, we found a number of real world examples of value uncaptured from six cases studies in manufacturing firms with product-service systems business models. We identified 26 sources of value uncaptured throughout the product life cycle. The findings show that the perspective of value uncaptured can effectively assist companies in understanding the negative aspects of their current business model and also in transforming the value uncaptured into value opportunities.

If you have any questions, please do not hesitate to contact Dr. Doroteya Vladimirova (dkv21@cam.ac.uk).

References                                                                                              

Bocken, N.; Short, S.; Rana, P. & Evans, S. (2013): A value mapping tool for sustainable business modelling, Corporate Governance, Vol. 13, No. 5, pp. 482–497.

Evans, S.; Rana, P. & Short, S. (2013): D2.4 First stage prototype tools and methods, capable of being fully used by industrial partners, Sustainable value creation in manufacturing networks (SustainValue) project, 7th Research Framework Programme of the European Union, available at: http://www.sustainvalue.eu/publications.htm.

Richardson, J. (2008): The business model: an integrative framework for strategy execution, Strategic Change, Vol. 17, pp. 133–144.

Yang, M.; Vladimirova, D.; Rana, P. & Evans, S. (2014): Sustainable value analysis tool for value creation, Asian Journal of Management Science and Applications, Vol. 1 No. 4, pp. 312–332.