An axiomatic model of customer value creation and firm value appropriation enhancing strategic decision-making based on the jobs to be done theory

Abstract

The concept of demand-driven economy is gaining traction in strategy research. With the emergence of the jobs to be done theory, the notions of customer value creation and firm value appropriation have received a new meaning. Rooting strategic decision-making in the jobs to be done theory allows better understanding what customers want to achieve (goal), what attributes need to be satisfied (opportunity space), and what value creation criteria are important (utility function). Through an axiomatic approach, I analyze the interplay between value creation and value appropriation. I show that starting from the job to be done and jointly identifying target customer segments and features of the offerings maximizes value that firms can appropriate in a competitive way beyond traditional approaches. By associating the theoretical results with managerial implications for strategic decision-making, I show how the jobs to be done perspective enhances firm profitability in a distinct way.

Keywords: Customer-Centricity, Demand-Driven Economy, Jobs To Be Done, Strategic Decision-Making, Value Creation, Value Appropriation

JEL Classification: D11, D46