Business Model Elements, Value Creation and Value Appropriation, and Firm Performance

Firms allocate their resources between two fundamental processes of creating value (i.e. innovating, developing products and deliver them) and appropriating value (i..e commercializing products achieving profits in the marketplace). Business models are recognized as novel construct that enables firms to create and capture value and thus to achieve competitive advantage. However research lacks a detailed understanding of the antecedents of value creation and value capture potentials and also about the effect of both of them on firm performance. This paper addresses the open issues. We show that a superior value proposition and superior processes lead to value creation and to superior firm performance. And that a superior revenue model leads to value appropriation and superior firm performance.