Modeling Value Creation and Capture in Service Systems

In service-dominant (S-D) logicvalue is viewed as being co-created between companies, customers, and other actors within a service system. In order to understand how service systems maintain their viability and competitiveness, two fundamental questions should be addressed: "how is value created for and with the customers in service systems?" and, "how is the value captured by the service provider in service systems?". The first question deals with "value creation" while the second addresses "value capture"in the "service value equation". The extant research mainly focuses on the service design from the value creation perspective. Thereby, there has been little discussion about suppliers' value capture and its trade off with value created for and with service customers. In this paper. adapting a holistic perspective, weintroduce a modeling framework that can assist in the understanding and the analysis of value creation and capture and their interplay in service systems. We illustrate the applicability of our framework by conducting a descriptive case study of the value creation and capture in Amazon service system in the period between 1997-2001.