MTEI Seminar by Prof. Joachim Henkel, Technische Universität München
Event details
| Date | 21.05.2015 |
| Hour | 15:00 › 16:30 |
| Speaker | Prof. Joachim Henkel, Technische Universität München |
| Location | |
| Category | Conferences - Seminars |
"Value capture in hierarchically organized value chains"
Abstract
The value captured by a value chain as a whole is distributed among its members through bargaining. Such bargaining typically
comprises several individual negotiations structured according to the hierarchical organization of the respective industry. We introduce the
notion of 'bargaining structure' to describe the sequence and participants of these negotiations. Using cooperative game theory, we
show how bargaining structure affects the distribution of value. We find that positions most conducive to value capture are those where
large complementarity gains are realized and split among a small number of negotiators. Since a value chain's bargaining structure is to some
extent malleable, each member has an incentive to shape it to its own advantage. This can be achieved through a purposeful design of product
architecture, which influences value chain architecture and thus bargaining structure. Examples from the commercial aircraft and white
goods industries demonstrate that bargaining structures are indeed malleable and, to some extent, under the control of the central firm.
Abstract
The value captured by a value chain as a whole is distributed among its members through bargaining. Such bargaining typically
comprises several individual negotiations structured according to the hierarchical organization of the respective industry. We introduce the
notion of 'bargaining structure' to describe the sequence and participants of these negotiations. Using cooperative game theory, we
show how bargaining structure affects the distribution of value. We find that positions most conducive to value capture are those where
large complementarity gains are realized and split among a small number of negotiators. Since a value chain's bargaining structure is to some
extent malleable, each member has an incentive to shape it to its own advantage. This can be achieved through a purposeful design of product
architecture, which influences value chain architecture and thus bargaining structure. Examples from the commercial aircraft and white
goods industries demonstrate that bargaining structures are indeed malleable and, to some extent, under the control of the central firm.
Practical information
- General public
- Free