Value Creation and Value Capture Alignment in Business Model Innovation: A Process View on Outcome‐Based Business Models

Industrial manufacturers are innovating their business models by shifting from selling products to selling outcome-

based services, where the provider (manufacturer) guarantees to deliver the performance outcomes of the products

and services. This form of business model innovation requires a profound yet little understood shift in how value is

created, delivered, and captured. To address this research gap, our study examines two successful and four unsuc-

cessful cases of this shift. We find that effectiveness in business model innovation hinges on the three process phases

that unfold in collaboration with the customers: value proposition definition, value provision design, and value-in-use

delivery. We also find that that success is determined by the alignment of specific value creation and value capture

activities in each phase: identifying value creation opportunities—agreeing on value distribution in value proposi-

tion definition, designing the value offering—deciding on the profit formula in the value provision design, and finally

refining value creation processes—regulating incentive structures in the value-in-use delivery. Our process model

contributes to the literature and practice on business model innovation by providing a thorough understanding of how

alignment of value creation and value capture processes is ensured, whilst paying special attention to their interde-

pendence and the interactions between provider and customer.