Managing value-based exchange in industrial markets: An organizational capability perspective

A capability to create value is the foundation of business relationships, and a pre-requisite for sustainable business performance. The value-based approach to industrial exchange is rapidly gaining ground in service-intensive industries. It has the potential to fundamentally transform exchange relationships and strategic networks. Commoditization of offerings urges industrial companies to renew their business models for improved value creation and value capture. Customer value-focused business models call for a pro-active customer approach, which requires an explicit and convincing evaluation and communication of value to the customers, to create urgency and demand, and to understand and influence customers' value conceptions and value perceptions. To implement a successful value-based strategy, industrial companies must develop new capabilities and practices that enable value-focusing exchange. However, research-based advice to support companies in building these capabilities is scarce. Existing research has not paid sufficient attention to the essential topics of business opportunity selection, value-based selling, and value-based pricing. To address the gaps in the existing knowledge, this dissertation investigates capabilities that are vital for value-based exchange in business-to-business relationships in industrial markets. It adopts a critical realist view to exploring industrial sales management in an abductive research process. The thesis contributes to the industrial sales management literature and improves the current understanding of the essential capabilities and managerial practices in value-focused business strategy implementation. The dissertation provides a novel conceptualization of customer value, and proposes several frameworks of capabilities and practices to guide planning and implementing value-based selling, business opportunity management, and value-based pricing. The findings have important implications for sales management theory, research and practice. The improved understanding and adoption of the value-based exchange are likely to have fundamental consequences for industrial business ecosystems as the roles, responsibilities, organizing principles, and business models of the strategic networks are affected by their strive toward higher value creation.