Value Creation in E-Business
Value creation in e-business
Raphael Amit and Christoph Zott – Strategic Management Journal, 2001
This page is a Norwegian academic summary of Raphael Amit and Christoph Zott's "Value Creation in E-Business", published in the Strategic Management Journal in 2001.
I have chosen to highlight the article because it represents an important shift in the understanding of how digital businesses create value. Amit and Zott showed that value creation in digital markets cannot be understood only through products, costs, or the business's own value chain.
Value can also arise through the way transactions, information, resources, customers, suppliers and partners are connected. Through the analysis, they identify four central sources of value creation in e-business: efficiency, complementarities, lock-in and innovation.
At the same time, they develop the business model as a unit of analysis that goes beyond the boundaries of the individual business. In 2026, this perspective has become even more interesting. E-commerce, digital platforms, ecosystems, data and artificial intelligence mean that value creation increasingly occurs through interconnected systems of businesses, technologies and people. The article is therefore more than a historical document from the early commercial phase of the internet. It provides a professional foundation for understanding how digital business models create value – and why the question of who creates the value, how it is created and who gets to share in it, is still crucial.
Introduction
Introduction
The rapid rise of the Internet around the turn of the millennium created new possibilities for how businesses could organize economic activities and conduct transactions. Information could be exchanged more quickly, geographical limitations became less important, and new connections between customers, suppliers, and other actors could be established. For Amit and Zott, this development raised a fundamental question: How is value created in e-business?
This question was particularly interesting because the new digital businesses could not be readily explained by established theories of strategy and entrepreneurship. Value creation could occur across business boundaries and involve customers, suppliers, partners and other actors simultaneously. The authors therefore wanted to investigate which mechanisms could actually explain value creation in these new business forms.
The study is based on analyses of 59 US and European e-business companies that had recently gone public. Through these cases, Amit and Zott examined how the companies organized transactions, which actors participated, how information and resources moved between them, and how these structures could create economic value.
An important starting point is that the internet does not just make existing activities faster or cheaper. Digital markets can also make it possible to organize the transactions themselves in new ways. Thus, value creation can arise through the way transactions are enabled and structured , not just through the product or service being sold.
The authors therefore seek to develop a theoretical framework that can explain this form of value creation. They take as their starting point existing theory from strategy and entrepreneurship, but at the same time examine whether these theories are sufficient when businesses operate in virtual markets.
The analysis leads to four central and interdependent sources of value creation: efficiency, complementarities, lock-in and innovation . These later become the core of the article's model. At the same time, Amit and Zott argue that none of the established theories alone can explain the entire value creation process.
Theory
Theory
To understand how e-business creates value, Amit and Zott review several key theoretical strands in strategy and entrepreneurship. Each of them explains specific aspects of value creation, but they emphasize different mechanisms and different units of analysis.
The authors focus in particular on value chain analysis, Schumpeterian innovation, the resource-based perspective, strategic networks, and transaction cost economics . The central question is which parts of these theories can help explain value creation in virtual markets – and where they fall short when used in isolation.
Virtual Markets
Virtual markets
Virtual markets are characterized by the fact that information technology makes it possible to conduct economic transactions in ways other than in traditional physical markets. Information can be processed and distributed more quickly, geographical distances become less important, and businesses can connect actors that were previously more difficult or expensive to connect.
These features can reduce information asymmetry between buyers and sellers, reduce search and transaction costs, and enable more efficient comparisons of products, prices, and alternatives. At the same time, businesses can offer greater amounts of information and combine products and services in new ways.
Virtual markets also enable new types of connections between economic actors. The customer does not have to be just a recipient of a finished product, but can actively participate through information, choices, assessments and other forms of interaction. At the same time, suppliers and partners can be connected more closely through digital systems.
Thus, virtual markets not only affect how existing transactions are carried out. They can also change who participates in the transaction, how the actors are connected, what information is exchanged and how the transaction is managed . This in turn opens up new opportunities for value creation.
Value Chain Analysis
Value chain analysis
A natural theoretical starting point is Michael Porter's value chain. The value chain perspective explains how businesses create value through a system of activities, and how competitive advantage can arise through cost advantages or differentiation.
This perspective is relevant to e-business because digital technologies can impact a number of activities in the value chain. Information technology can reduce costs, improve coordination, streamline processes, and change how businesses communicate with customers and suppliers.
At the same time, Amit and Zott believe that the value chain perspective alone is too narrow. In digital markets, value creation can occur outside the traditional sequence where a product moves from development and production to distribution and sales. Value can arise through connections between multiple businesses and actors that together enable a transaction.
The business model perspective that Amit and Zott later develop therefore retains Porter's emphasis on activities and processes, but shifts the focus from the movement of the product through the value chain to the processes that make the transaction possible .
Schumpeterian Innovation
Schumpeterian innovation
Joseph Schumpeter's theory provides a different perspective on value creation. Here, innovation is central. New products, production methods, markets, raw material sources and organizational forms can break with established structures and create new economic opportunities.
This perspective is particularly relevant to e-business because the Internet opened up entirely new ways of organizing commercial transactions. Innovation could thus lie in the business architecture itself and not necessarily just in the product being sold.
Later in the article, Amit and Zott use eBay, Priceline, and Autobytel as examples. eBay established large-scale customer-to-customer auctions, Priceline introduced a model where buyers could specify needs and reserve prices, while Autobytel connected car buyers, car dealers, finance companies, and insurance companies in new ways.
Schumpeter's perspective thus helps to explain novelty , which later becomes one of Amit and Zott's four central value drivers.
Resource-Based View of the Firm
The resource-based perspective on business
The resource-based perspective shifts the focus to the company's resources and capabilities. Durable competitive advantages can arise when the company controls resources that are valuable and difficult for competitors to copy or substitute.
This perspective is also relevant for digital businesses. Technology, expertise, brand, knowledge, customer data, relationships and organizational capabilities can all contribute to value creation.
But in e-business, not all relevant resources need to be located within a single business. A digital business model can combine resources and capabilities from several different actors. Value creation can therefore depend on how the business's own resources are connected with resources from suppliers, partners and customers.
This makes complementarities particularly important. The value of one resource can increase when combined with another. Amit and Zott's later business model perspective therefore takes into account how resources can become more valuable when they are difficult to imitate, less transferable and substitutable, and at the same time more complementary.
Strategic Networks
Strategic networks
Strategic network theory expands the perspective further. Value creation does not have to take place only within the business, but can arise through the network of which the business is a part .
Suppliers, customers, complementary businesses and partners can contribute resources and capabilities that the business does not control. The structure of the network, the relationships between the actors and the business's position in the network can therefore affect how much value can be created.
This perspective is particularly well suited to e-business, because digital technologies make it easier to coordinate activities across organizational and geographic boundaries. The business model can thus encompass resources and activities from many businesses simultaneously.
The role of the customer is also becoming more important. The customer can contribute information about their own needs, participate in testing and development, and through digital interactions contribute directly to value creation. Amit and Zott point to previous research on how customers can co-create value with the business.
The network perspective also opens up the possibility of network effects . The value of a service can increase when more people participate in the network. This later becomes an important part of the explanation of lock-in and value creation.
Transaction Cost Economics
Transaction cost economics
Transaction cost economics focuses on the costs of organizing and carrying out economic transactions. These may include costs related to search, information, negotiation, control, coordination and follow-up, among other things.
Digital markets can reduce many of these costs. Information can be found faster, prices can be compared more easily, communication can be automated, and activities between buyers, sellers, and partners can be coordinated more efficiently.
The transaction cost perspective therefore contributes particularly to explaining efficiency as a source of value creation.
However, Amit and Zott believe that this perspective alone is not sufficient. A business model can create value through more than just lower transaction costs. Innovation, complementarities and lock-in can also contribute significantly to overall value.
Summary
Summary
The review shows that the established theories illuminate different parts of value creation. The value chain focuses on activities and processes. Schumpeter emphasizes innovation and new combinations. The resource-based perspective explains the importance of resources and capabilities. Network theory shows how value can arise between businesses, while transaction cost economics explains how more efficient organization of transactions can create value.
The problem is that none of the perspectives alone captures the whole phenomenon . They also operate with different units of analysis: activities in the value chain, the enterprise and the entrepreneur in Schumpeter, resources and capabilities in the resource-based perspective, the network in strategic network theory and the transaction in transaction cost economics.
Amit and Zott therefore move towards an integrated understanding. E-business shows that value creation can take place across the traditional boundaries of theories . The decisive factor is not only what the business owns or produces, but how it organizes a system of transactions, resources and relationships that makes it possible for multiple actors to create and realize value.
It is this theoretical starting point that the authors take forward when they move on to the empirical part of the study and ask what they can actually observe in the 59 e-business companies .
Data and Methods
Data and method
To develop a theory of value creation in e-business, Amit and Zott chose an exploratory, case-based research strategy. The purpose was not primarily to test an existing theory, but to investigate a relatively new phenomenon and allow patterns in the empirical evidence to contribute to the development of the theory. This approach was particularly relevant because e-business around the turn of the millennium was developing rapidly, while an established theoretical framework that could explain how these businesses created value was still lacking.
The researchers therefore combined empirical observations with existing theory in strategic management and entrepreneurship. Through a systematic analysis of the companies, they searched for common features in how transactions were organized and how these structures contributed to value creation. The result was eventually to be a model that not only described individual companies, but identified more general mechanisms for value creation in e-business. The article is based on 59 American and European e-business companies that had recently gone public.
Research Strategy
Research strategy
Amit and Zott use a grounded theory approach, in which theory is developed through a continuous interaction between empirical observations and existing theoretical perspectives. Case-based research makes it possible to examine complex relationships and identify mechanisms that are not necessarily known or clearly defined in advance.
The research strategy was particularly appropriate because the authors wanted to understand how e-business creates value. They therefore examined not only financial results but also the very design of the businesses: which actors participated, which products, services and information flows were involved, how the transactions were organized, and which mechanisms could explain the value creation.
The researchers analyzed the cases both individually and cross-sectionally. Through the comparison, they were able to identify patterns that occurred across different types of e-business, while also examining how different mechanisms for value creation were interconnected.
Population of E-Business Firms
The population of e-businesses
The study focuses on businesses that conducted all or part of their commercial transactions through internet-based markets. This included businesses with different business models and different roles in the market.
The focus was not on one specific industry or product type. The researchers wanted a broader understanding of how the internet could be used to organize economic transactions and create value. This allowed them to study mechanisms that cut across traditional industry boundaries.
This was important because one of the characteristics of virtual markets was precisely that traditional boundaries between businesses and industries could become less clear. An e-business could connect resources, services and players from multiple industries into one unified business model.
Sample
Selection
The final sample consisted of 59 e-business companies from the United States and Europe . The companies had recently gone public, which gave the researchers access to relatively extensive public information about the companies' activities, strategies, and business models.
The sample included different types of digital businesses. This made it possible to compare different ways of organizing transactions and examine whether specific value creation mechanisms occurred across businesses.
The aim was not to create a statistically representative survey of all e-businesses. Instead, the sample was intended to provide rich empirical material that could be used to identify patterns and develop theory.
Data Collection
Data collection
The data collection was comprehensive and case-oriented. The researchers gathered information on, among other things, the companies' products and services, customers, suppliers, partners, transaction processes, information flows, and the organization of business activities.
Of particular importance was understanding how the transactions were actually made possible . This involved mapping which actors participated, what roles they had, what was exchanged, how information moved between the actors, and how the business coordinated these connections.
This broad approach allowed researchers to consider e-business as more than a digital sales channel. They were able to examine the entire architecture of the transaction and thus analyze how value could arise through the very organization of the business.
Data Analysis
Data analysis
The analysis was conducted through both individual case analyses and systematic comparisons between cases. The researchers worked with the material to identify recurring patterns in how the businesses created value.
Through this process, categories that could explain value creation gradually emerged. The researchers then compared these observations with the theories they had previously reviewed. In this way, the empirical analysis and the theoretical development were linked.
The result was the identification of four overarching mechanisms that were common across the cases. These categories were further developed into the article's central model for value creation in e-business:
Efficiency – Complementarities – Lock-in – Novelty
The crucial finding was that the value drivers did not operate in isolation. They could influence and reinforce each other. The model therefore had to be understood as a system of interdependent sources of value creation , not as four separate instruments. This is also the main finding of the article, as the authors summarize the study.
Emergent Theory: Sources of Value Creation in E-Business
Emerging Theory: Sources of Value Creation in E-Business
Based on the analysis, Amit and Zott identify four key value drivers: efficiency, complementarities, lock-in, and innovation . They represent different mechanisms that can increase the value created through an e-business model.
The model is about the total value creation , not just how much of the value a business manages to extract as profit. This distinction is important. Value creation can benefit customers, suppliers, partners, and the business itself. Before value can be appropriated or distributed among the actors, it must first be created.
The four value drivers have roots in different theoretical traditions, but the analysis shows that they cross the boundaries between them. This is precisely what leads Amit and Zott towards the need for an integrated theory of value creation in e-business.
Efficiency
Efficiency
Efficiency arises when an e-business enables transactions to be completed with lower costs, less time, or better information. The greater the efficiency gains the business can create compared to alternative ways of completing the same transaction, the greater the potential for value creation.
One important source is the reduction of information asymmetry . Digital markets can make more information available to both buyers and sellers, thereby improving the basis for decision-making. The customer can search, compare and evaluate options more quickly, while the business can coordinate information and transactions more efficiently.
Search costs are therefore key. When the customer can more easily find the right product, compare alternatives and obtain relevant information, the resources required to complete a purchase are reduced.
E-business can also reduce costs related to communication, marketing, sales, inventory, order processing and coordination. Automated processes and closer information integration between businesses can streamline transactions for several players at the same time.
Efficiency is therefore not just about lower costs for the business. The customer's time, effort and decision-making costs are also included in value creation.
This is an important extension of a traditional cost perspective. A digital solution creates value if it makes the entire transaction easier, faster, more informed, or less resource-intensive.
Complementarities
Complementarities
Complementarities exist when the value of one good, service, resource or activity increases because it is combined with another. In other words, the whole becomes more valuable than the elements would be separately.
In e-business, the business can exploit this by offering products and services that complement the core transaction. Amit and Zott distinguish, among other things, between vertical and horizontal complementarities.
For example, a travel-related website might sell airline tickets and vacation packages while also providing customers with access to weather information, currency rates, or other services that make planning easier. The complementary services thus increase the value of the core transaction itself.
Complementarities can also arise between online and offline resources . Amit and Zott highlight the combination of digital services and physical businesses. For example, a customer can search and order online, but at the same time benefit from physical stores for pickup, returns or service.
The complementary elements also do not have to be directly related to the product being sold. Digital communities, communication services or other content can make the overall service more attractive and increase customer benefit.
Complementarities can also exist between activities, technologies, resources and capabilities of different businesses. Digital business models can connect these together, thereby unlocking value that neither actor could necessarily create alone.
Here the connection with efficiency becomes clear. Complementary services can reduce the customer's search costs and make the decision easier. Thus, complementarity can create efficiency , while efficient digital transactions make it easier to exploit complementarities.
Lock-in
Locking in
The third value driver is lock-in . Value creation potential increases when customers have incentives to conduct repeat transactions, and when strategic partners have incentives to maintain and further develop the collaboration.
Lock-in reduces the likelihood of customers and partners switching to competitors. Amit and Zott link this to switching costs, network effects, brand and trust, among other things .
Loyalty programs are one mechanism. The customer can receive financial or other benefits from repeat purchases, making it less attractive to switch suppliers.
Another mechanism is learning. Once the customer has learned how a website or digital service works, this knowledge represents an investment. Switching to another system may involve the customer having to learn something new, and this may create a switching cost.
Customization and personalization can amplify this effect. As the customer adds preferences, history, and information over time, the business can increasingly tailor products, services, and recommendations. The more the customer uses the system, the more relevant the system can become.
This can create a positive feedback loop. Increased usage provides more information. More information provides better customization. Better customization increases the utility for the customer, who in turn has stronger incentives to continue using the solution.
Virtual communities can create another form of lock-in. When users communicate and interact through a platform, the relationships between participants can themselves make the service more valuable.
This is where network effects come in. The value for the individual user can increase as the number of other users increases. Amit and Zott use online communities and auction platforms, among other things, to demonstrate this.
In an auction service like eBay, more buyers can make the platform more attractive to sellers. More sellers, in turn, create a larger and more interesting offer for buyers. This creates indirect network effects between the two groups.
Again, the analysis shows that the value drivers are interconnected. Efficiency and complementary offerings can attract and retain customers, which in turn strengthens lock-in. Stronger lock-in can also make the platform more attractive to new partners who can contribute additional complementary products and services.
Novelty
Innovation
The fourth value driver is novelty . Here, Amit and Zott build on Schumpeter's understanding of innovation, but expand the perspective to the very way transactions are organized.
Traditionally, innovation can involve new products, services, production methods, distribution channels or markets. However, the analysis shows that e-business can also create value through new transaction structures and new ways of doing business .
eBay is a key example. The company enabled customer-to-customer auctions on a large scale, thereby creating a market architecture where even relatively low-value goods could be traded between private individuals.
Priceline introduced a different transaction logic by allowing the buyer to express needs and the price they were willing to pay. Autobytel, on the other hand, connected car buyers with car dealers, finance companies, and insurance companies, making it possible to consolidate several parts of the car purchase into one system.
The innovation therefore does not necessarily lie in the actual car, flight, or product being traded. It can lie in the architecture surrounding the transaction .
Digital markets further expand the space of opportunity because geographical and physical limitations are reduced, information flows can go in new directions, and information can be combined and distributed in new ways.
Innovation can also provide first-mover advantages. A company that introduces a new business model early can establish a brand, reputation, knowledge and customer base before its competitors. In markets with strong network effects, this can be particularly important because early growth can help establish critical mass.
But Amit and Zott also show that first-mover advantages are not automatic. Established businesses may have strong brands, physical operations, and other resources that can be combined with digital activities. Such online–offline complementarities can provide significant advantages to later entrants.
Innovation is also linked to the other value drivers. A new transaction architecture can create complementarities. Innovation can establish lock-in through first-mover advantages and network effects. New digital solutions can also reduce information problems and thereby increase efficiency.
This is therefore one of the most important points of the article:
Efficiency, complementarities, lock-in and innovation must be understood in context.
The value creation potential lies in the combined effect of the value drivers .
Discussion
Discussion
Amit and Zott draw two overarching insights from their analysis. The first is that value creation in e-business can be understood through four key sources: efficiency, complementarities, lock-in, and innovation . The second is that these sources are interdependent, and that value creation cannot therefore be fully understood through a single theoretical perspective.
The established theories reviewed in this article emphasize different mechanisms. Value chain analysis focuses on the activities of the firm. Schumpeterian innovation emphasizes new combinations and entrepreneurship. The resource-based perspective focuses on resources and capabilities. Strategic network theory examines relationships and networks between firms, while transaction cost economics focuses on transactions and how these can be organized efficiently.
Amit and Zott therefore argue that neither of these theories should be given priority when analyzing the value creation potential of e-business. Each of them captures important parts of the phenomenon, but none explains the whole on its own. The analysis instead points to the need to integrate perspectives from both strategic management and entrepreneurship.
The second insight concerns the connection between the value drivers and where value creation actually takes place . Efficiency can reinforce complementarities. Complementarities can contribute to lock-in. Innovation can create both efficiency and network effects, while lock-in can make it more attractive for new partners to contribute complementary products and services. Value creation thus arises through a system of interdependent mechanisms.
This also creates a theoretical problem. The different theories operate with different units of analysis . In Porter's value chain, the activities of the enterprise are central. In Schumpeter, the enterprise and especially the entrepreneur are central. In the resource-based perspective, resources and capabilities are the unit of analysis. Network theory focuses on the network of enterprises, while transaction cost economics uses the transaction itself as the unit of analysis.
If one of these units of analysis is used in isolation, one risks overlooking important aspects of how value is created in e-business. Amit and Zott seek an unit of analysis that can accommodate the different sources of value creation simultaneously.
It leads them to the business model .
The Business Model as a Unit of Analysis
The business model as a unit of analysis
Based on the analysis, Amit and Zott suggest that the business model be used as a unit of analysis to understand value creation in e-business.
They define the business model as a description of the content, structure, and management of transactions designed to create value through the exploitation of business opportunities .
The definition thus consists of three central dimensions: content, structure and governance.
Transaction content – transaction content is about what goods or information are exchanged, and what resources and capabilities are required to make the exchange possible.
Transaction structure – transaction structure is about which actors participate in the exchange and how they are connected. The structure also includes the order in which transactions are carried out and the mechanisms used to enable them. The choice of structure affects, among other things, the flexibility, adaptability and scalability of transactions.
Transaction governance is about how flows of information, resources and goods are controlled by the actors involved. This also includes the organizational and legal form and the incentives participants have to contribute to the transactions.
This understanding makes it possible to bring together the four value drivers within one framework. Efficiency can arise through the way transactions are organized. Innovation can lie in the content, structure or management of transactions. Complementarities can arise between resources and capabilities of different actors, while network effects and other forms of lock-in can arise through the relationships that the business model establishes.
The Business Model and Established Theories
The business model and established theories
The business model concept thus does not replace the theories previously reviewed by Amit and Zott. It builds on them and combines key elements from multiple perspectives.
The authors derive their understanding of innovation and creative destruction from Schumpeter. However, innovation in a business model can encompass more than new products, production processes, distribution channels and markets. Exchange mechanisms and transaction architectures can also be innovative.
Porter's value chain continues the importance of activities, processes and multiple sources of value. However, the business model does not necessarily follow a product from production to sale. Instead, it describes the activities and steps that must be carried out to enable a transaction.
From the resource-based perspective, the importance of resources and capabilities is derived. The value in the business model can increase when the combination of resources and capabilities becomes more difficult to imitate, less transferable and substitutable, more complementary and more productive through use.
From strategic network theory comes the understanding that value creation can take place in the network and not just within one business . Suppliers, complementary businesses and customers can all be included in the business model. The relationships between the actors thus become part of the value creation architecture itself.
The customer has a particularly important role. The customer can help identify needs, participate in development and testing, and through digital information flows help the business better adapt its offering. Amit and Zott refer here to research on how customers can co-create value with the business.
From transaction cost economics, the authors retain the importance of effective transaction management, but broaden the perspective. Value creation is not just about reducing transaction costs. Innovation, lock-in, and complementarities can also create value.
Beyond the Boundaries of the Firm
Beyond the boundaries of business
Although a business model has one specific business as its point of reference, the unit of analysis is broader than the business itself. A business model can encompass resources and capabilities from multiple businesses and multiple industries.
This is crucial to Amit and Zott's understanding of digital markets. The analysis must be able to answer two fundamental questions:
How do the participants in the business model make the transactions possible? And how is value created through the process that enables these transactions?
Autobytel.com is used as a concrete example. The business connected car buyers, car dealers, financing companies, insurance companies and other partners. The customer could search for and evaluate cars digitally, get help with financing and insurance, and finally pick up the car from the dealer or have it delivered.
Autobytel thus did not necessarily perform all the activities itself. The business model coordinated a system where different actors contributed different resources and capabilities. The value arose throughout the entire configuration of transactions and participants .
For the customer, value was created through faster searches, easier evaluation and car selection. At the same time, dealers were able to achieve lower costs, while financing and insurance represented complementary services that increased the value of the overall solution.
Total Value Created
Total value creation
With the business model as the unit of analysis, Amit and Zott can also formulate a broader understanding of overall value creation.
Based on Brandenburger and Stuart, they argue that the total value created through a business model corresponds to the sum of the values that accrue to all participants through all the transactions that the business model enables .
This is an important distinction. The analysis is not just about how much value the business itself manages to retain. Customers, suppliers, partners and other stakeholders can also share in the value that is created.
Thus, the article distinguishes between value creation and value appropriation . Before a business can appropriate a portion of value, there must be value that can be distributed.
Business Model and Revenue Model
Business model and revenue model
Amit and Zott also emphasize a distinction that often gets blurred in discussions about digital businesses: A business model is not the same as a revenue model.
The authors define a revenue model as the specific ways in which the business model enables revenue generation.
For example, e-businesses can generate revenue through subscriptions, advertising, transaction revenue, referral fees, commissions, or margins on direct sales. Several such mechanisms can also be combined.
But this describes how the business makes money , not the entire system that creates value.
The business model and the revenue model are therefore complementary, but different concepts. Amit and Zott express the distinction clearly: The business model is primarily about value creation, while the revenue model is primarily about value acquisition.
This distinction is central to the overall argument of the article. A business cannot understand its value creation simply by studying where its revenues come from. The analysis must also include the actors, activities, resources, relationships, and transactions that make value creation possible.
Amit and Zott therefore conclude the discussion by saying that the business model concept makes it possible to examine questions about value creation that the previous theoretical frameworks alone cannot adequately answer. As business boundaries become less clear in virtual markets, strategic analysis must also move beyond the business as a traditional unit of analysis.
Conclusions
Conclusions
The rapid technological development and the rise of e-business created new opportunities for economic value creation. Amit and Zott's goal was to contribute to the development of theory by examining the theoretical basis for this value creation and analyzing patterns across a wide range of empirical material.
The analysis led to the model with four value drivers:
Efficiency – complementarities – lock-in – innovation.
These four factors increase the potential for value creation in e-business, but they must not be understood in isolation. They influence each other and can be mutually reinforcing.
The study also attempts to bridge the gap between research on strategic management and entrepreneurship . A key finding is that none of the established theories alone can explain the sources of new value creation in e-business.
Amit and Zott therefore argue for an integrated understanding that draws on value chain analysis, Schumpeterian innovation, the resource-based perspective, strategic networks, and transaction cost economics . This integrated perspective is particularly relevant in markets where businesses, customers, and partners are closely connected through digital networks.
The business model becomes a central unit of analysis in this context. It makes it possible to examine the content, structure and management of transactions and thus how value is created through connections between multiple actors and across traditional business boundaries.
The article also emphasizes that this is only a first step towards understanding the strategic challenges that e-business creates. The authors point to several questions for further research. Among the most important are whether the sources of competitive advantage differ in online and offline markets, and whether strategic perspectives and tools developed for traditional businesses are still relevant in the new digital competitive reality.
Amit and Zott suggest that virtual markets open up new forms of innovation, particularly business model innovation . This may require a corresponding shift in strategic thinking towards more integrated, dynamic, adaptive and entrepreneurial strategies.
Thus, the article ends roughly where its most important contribution begins. Digital technology is not just about making existing businesses faster or cheaper. It can change the very architecture of how economic transactions are organized and how value is created .
To understand this value creation, we must therefore look beyond the individual technology, the individual product and, to some extent, the individual business. Value can arise in the system of transactions, resources, relationships and actors that the business model binds together .
And at the center of Amit and Zott's model are still the four value drivers:
Efficiency. Complementarities. Lock-in. Innovation.
It is the combination of them – and the way they reinforce each other – that forms the core of the article's explanation of value creation in e-business .
From San Francisco and Oxford to the customer
Experiences from professional seminars and study trips in San Francisco and Oxford are also part of the background for this professional universe. Topics such as innovation, digitalization, e-commerce, user experience and new business models have over time contributed to a broader understanding of how technology and organizations must take as their starting point the people the solutions will actually work for.
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Short review
How do you create content that actually helps people – and at the same time supports your business goals? Content Strategy for the Web is considered one of the most influential books in the field of content strategy and digital communications. The book shows how good content does not arise by chance, but through a deliberate strategy where user needs, the organization's goals, structure, work processes and management are closely linked.
The authors take the reader through the entire process – from planning and organizing to publishing, managing and continuously improving content on websites and digital services. Although technology has evolved since the book was published, the principles of quality, relevance, management and long-term content work are at least as relevant in an era where search engines and artificial intelligence assess the credibility and usefulness of content.
Why we recommend the book
At The Invisible Capital, we believe that good content is one of the most important forms of invisible value creation. A website is far more than design and technology – it is the content that builds trust, creates great customer experiences and helps people find the answers they are looking for.
This book is perfect for leaders, communications consultants, content producers, web editors, UX designers, and anyone working with digital services. It shows why a clear content strategy leads to better user experiences, more effective interactions, and stronger digital results over time.
In an era where artificial intelligence is increasingly important in how information is discovered, understood, and communicated, this book is more relevant than ever. It reminds us that technology alone never creates value – it is good, structured, and relevant content that makes the difference.
Don't Make Me Think
Author: Steve Krug
Short review
Don't Make Me Think is one of the world's most influential books on usability and web design. Since its first edition in 2000, the book has helped designers, developers, content producers, and managers understand a simple but powerful principle: Good digital services should be intuitive. The user should be able to complete their task without having to stop and think about how the website works.
Why we recommend the book
This is one of the books that has had the greatest impact on my own work with digital services. Over the years – from SAS and the Norwegian Opera & Ballet to working on Bærum Municipality’s website – the principles in this book have been an important reminder that technology is never an end in itself. The goal is to make everyday life easier for the people who use the services. Despite the fact that the book was published many years ago, the message is just as relevant today.
Internet Marketing & eCommerce
Authors: Ward Hanson and Kirthi Kalyanam
Short review
Internet Marketing & eCommerce provides a thorough introduction to how the internet has changed marketing, commerce, and business development. The book combines theory and practical examples in digital marketing, e-commerce, customer behavior, value creation, and digital business models. Although written at a time when the internet was still in its infancy, many of the fundamental principles are still highly relevant.
Why we recommend the book
This book was an important part of my own learning journey in digital marketing and e-commerce. It helped build my understanding of how technology, customer experiences and business strategy are interconnected – an insight that later became very important in my work with SAS, the Norwegian Opera & Ballet, Bærum Municipality and eventually the project The Invisible Capital. Many of the ideas about customer value, digitalization and innovation presented on the website have their roots in the knowledge this book conveys.
The Innovator's Solution: Creating and Sustaining Successful Growth
Authors: Clayton M. Christensen and Michael E. Raynor
Short review
In this sequel to The Innovator's Dilemma, Clayton Christensen shows how businesses can translate innovation theory into practical strategy. The book explains how companies can identify new growth opportunities, develop disruptive innovations, and build organizations that thrive in rapidly changing markets.
Why we recommend the book
While The Innovator's Dilemma explains why established businesses are often challenged, The Innovator's Solution provides concrete advice on how to meet the challenges. The book is therefore a natural next step for anyone who wants to understand innovation, strategy and long-term value creation.
The Innovator's DNA: Mastering the Five Skills of Disruptive Innovators
Authors: Jeff Dyer, Hal Gregersen and Clayton M. Christensen
Short review
What characterizes people who create groundbreaking innovations? The authors identify five key skills – observation, questioning, experimentation, networking and association – that are common to the world's most innovative leaders and entrepreneurs.
Why we recommend the book
This book shifts the focus from organizations to the people behind innovation. It shows that creativity and innovation can be developed through deliberate training and experience. The perspectives align well with the philosophy behind Invisible Capital, where human competence and curiosity are the most important drivers of development.
Competing Against Luck: The Story of Innovation and Customer Choice
Authors: Clayton M. Christensen, Taddy Hall, Karen Dillon and David S. Duncan
Short review
In this book, Clayton Christensen further develops the theory of Jobs to Be Done – the idea that customers do not primarily buy products, but "hire" them to solve specific needs. Through practical examples, the authors show how businesses can develop products and services that address customers' real-world challenges.
Why we recommend the book
For anyone working in customer experience, service design, and innovation, this is one of the most insightful books ever written. It reminds us that value creation always starts with understanding the people we are developing solutions for – a fundamental principle of Invisible Capital.
The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail
Author: Clayton M. Christensen
Short review
The Innovator's Dilemma is considered one of the most influential books on innovation and technological change. Clayton M. Christensen introduces the theory of disruptive innovation and explains why even the most successful businesses can fail when new technologies and business models challenge established markets. Through a series of examples, he shows how companies often focus on today's customers and incremental improvements, while overlooking innovations that later change entire industries.
Why we recommend the book
This is one of the books that has had the greatest impact on modern innovation thinking. When I first read it, it gave me a whole new perspective on why some businesses succeed in transformation, while others lag behind – even when they are well led. The insight has been an important part of my own understanding of digitalization, innovation and change management, and many of the reflections in The Invisible Capital build on the ideas Clayton Christensen presents in this classic. The book is as relevant today, in the face of artificial intelligence and digital transformation, as it was when it was published.
Open Innovation: The New Imperative for Creating and Profiting from Technology
Author: Henry Chesbrough
Short review
Henry Chesbrough introduced the concept of Open Innovation and changed the way many businesses think about research and development. He shows how companies can create more innovation through collaboration with customers, universities, start-ups, suppliers and other external partners.
Why we recommend the book
Open Innovation has had a major influence on modern innovation thinking and was also an important topic during the seminars in Oxford and San Francisco. The book shows why future value creation occurs in the interaction between people, businesses and knowledge environments – not within closed organizations alone.
Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant
Authors: W. Chan Kim and Renée Mauborgne
Short review
Blue Ocean Strategy challenges businesses to shift their focus away from fierce competition and instead create new markets with little or no competition. The authors present strategies and models that help organizations develop innovative products, services, and business models.
Why we recommend the book
This book has inspired leaders around the world to rethink strategy and innovation. Instead of competing for the same customers, it shows how businesses can create new value through creativity and differentiation. The perspectives align very well with the themes of innovation, digitalization, and long-term value creation in Invisible Capital.
Outside Innovation: How Your Customers Will Co-Design Your Company's Future
Authors: Patricia B. Seybold
Short review
Patricia Seybold shows how businesses can create better products and services by actively involving customers in the innovation process. The book describes how dialogue, co-creation and close collaboration with users can provide better solutions and stronger competitiveness.
Why we recommend the book
Customers often hold the most important insights into how products and services can be improved. This book emphasizes the importance of listening, involving, and learning from users – a perspective that is echoed in many of the articles on The Invisible Capital. Innovation rarely happens alone; it is created in the interaction between people.
Blown to Bits: How the New Economics of Information Transforms Strategy
Authors: Philip Evans and Thomas S. Wurster
Short review
This book analyzes how digital information is changing competitive conditions, markets, and business strategies. The authors explain how the internet is disrupting established structures and creating new opportunities for businesses that are able to think differently.
Why we recommend the book
Although written early in the internet revolution, the book describes many of the developments that still characterize business today. It provides valuable perspective on how digitalization affects value chains, competition, and innovation – themes that are central to Invisible Capital.
Wikinomics: How Mass Collaboration Changes Everything
Authors: Don Tapscott and Anthony D. Williams
Short review
Wikinomics shows how openness, sharing and collaboration across organizations create new forms of innovation and value creation. Through a number of international examples, the authors describe how digital networks make it possible to develop products, services and knowledge together.
Why we recommend the book
This book was groundbreaking when it was first published, and many of the ideas have since become a natural part of everyday digital life. The perspectives on collaboration, knowledge sharing, and open innovation processes align very well with the philosophy behind Invisible Capital, where people and networks are at the center of value creation.
The Competitive Strategy: Techniques for Analyzing Industries and Competitors
Author(s): Author: Michael E. Porter
Short review
Competitive Strategy is Michael E. Porter's classic work on how companies can understand the competition they find themselves in and develop a position that provides a basis for long-term profitability. Porter shifts the focus from the individual competitor to the structure of the entire industry and shows how competition is affected by customers, suppliers, new entrants, substitutes and the rivalry between existing companies. This forms the basis for what has later become known as Porter's Five Forces. The book is also about how companies can choose a competitive strategy on the basis of this analysis. It thus established an analytical language for strategy that has gained great importance in both research, teaching and practical strategy work.
Why we recommend the book
We recommend Competitive Strategy because it provides the analytical foundation for much of the thinking Porter later develops in What Is Strategy?. If a company is to choose a unique strategic position, it must also understand the competitive forces, the industry structure and the factors that affect the ability to create and retain value. The book is particularly useful because it reminds us that strategy is not just about internal goals, plans and ambitions. Strategy must be developed in the face of customers, competitors, suppliers, technology and structural changes in the market. Together with What Is Strategy?, the book therefore provides a much richer picture: First, the company must understand the competitive arena. Then, it must choose how to be different.
Competitive Advantage: Creating and Sustaining Superior Performance
Author(s): Author: Michael E. Porter
Short review
In Competitive Advantage, Porter moves the analysis from the industry to the business itself. The main question is how competitive advantage is actually created. One of the book's most important contributions is the value chain, where the business is understood as a system of activities that collectively develop, produce, market, deliver and support a product or service. Competitive advantage cannot therefore be understood only through products or overall strategies; one must examine the activities that create costs, differentiation and value. This understanding later becomes central to Porter's argument about strategic fit: the activities must not only be good in isolation, but also fit together and reinforce each other.
Why we recommend the book
We recommend Competitive Advantage because it brings strategy right down to where value is actually created: in the activities the business performs. This makes the book particularly relevant together with What Is Strategy?. When Porter argues in 1996 that strategy consists of performing different activities than competitors, or performing similar activities in other ways, this builds on the thinking he developed here. For our perspective on value creation, this is particularly interesting. Value does not arise because the business has formulated a strategy on a document, but through people, expertise, technology, processes, collaboration and activities that together enable the business to create something that customers value. The book therefore provides an important connection between strategy, competitive advantage and actual value creation.
The Competitive Advantage of Nations
Author(s): Author: Michael E. Porter
Short review
In The Competitive Advantage of Nations, Porter raises the perspective from business to countries, regions and business environments. The book is based on extensive studies of the competitiveness of ten leading trading nations and examines why certain countries and business clusters are particularly successful in certain industries. A central premise is that national prosperity is not simply something a country inherits through natural resources or other given conditions. It is created, and productivity, innovation, competence, competition and the quality of the environment in which businesses operate are crucial. Here, Porter also develops the well-known diamond model to explain how different national and regional conditions can interact and stimulate competitiveness.
Why we recommend the book
We recommend The Competitive Advantage of Nations because here Porter extends the strategy perspective to the ecosystem surrounding the business itself. Value creation does not occur in a vacuum. Businesses develop in societies with education, research, infrastructure, capital, suppliers, demanding customers, competing businesses and public institutions. This makes the book particularly interesting for understanding value creation as an interaction between people, businesses and society. It also provides an important corrective to the notion that a country's competitiveness can mainly be understood through low costs or access to natural resources. Innovation, productivity and the ability to continuously develop are far more central to Porter's explanation.
Understanding Michael Porter: The Essential Guide to Competition and Strategy
Author: Joan Magretta
Short review
Understanding Michael Porter brings together and explains the most important parts of Michael Porter's strategic thinking in one accessible whole. Joan Magretta herself worked on strategy at the Harvard Business Review and organizes Porter's ideas around two fundamental questions: What is competition, and what is strategy? She explains, among other things, the Five Forces, competitive advantage, the value chain, value creation, trade-offs, fit, and strategic continuity. This makes the connection between Porter's various works clearer than when the concepts are studied separately. The book also includes an interview with Porter.
Why we recommend the book
We recommend Understanding Michael Porter because it helps the reader see the whole picture of Porter's understanding of strategy. Porter is often reduced to the Five Forces or a few models used in isolation. Magretta shows why this is too simple. Competition, value creation, strategic positioning, trade-offs, activity systems, fit and continuity are interconnected. This makes the book a particularly good supplement after reading What Is Strategy?. It makes it easier to understand why Porter does not view strategy as a plan or a collection of goals, but as a coherent system of choices about how the business will create value and compete over time.
HBR's 10 Must Reads on Strategy
Authors: Harvard Business Review, Michael E. Porter, W. Chan Kim, Renée A. Mauborgne and more
Short review
HBR's 10 Must Reads on Strategy brings together some of Harvard Business Review's most influential writings on strategy. The original collection from 2011 features Michael E. Porter's What Is Strategy? as its main article and combines it with works on competitive forces, Blue Ocean Strategy, the organization's vision, business models, strategy execution, and the Balanced Scorecard, among others. The result is not one unified theory of strategy, but multiple perspectives on how organizations can develop, formulate, and execute strategy.
Why we recommend the book
We recommend HBR's 10 Must Reads on Strategy because it places Porter in a broader strategic context. After reading What Is Strategy?, it will be interesting to encounter other central perspectives and see how they complement, challenge, or extend Porter's understanding. The collection also shows why strategy cannot be reduced to a single model. Competitive position, choice, innovation, business model, execution, priorities, and measurement must be seen in context. For the reader who wants to move on from Porter and into the strategy discipline more generally, this is therefore a very good introduction.
Creating a Learning Society: A New Approach to Growth, Development, and Social Progress
Author: Joseph E. Stiglitz and Bruce C. Greenwald
Short review:
Creating a Learning Society examines how knowledge, learning, and technological development contribute to economic growth and long-term value creation. Joseph E. Stiglitz and Bruce C. Greenwald challenge the notion that economic development is primarily about accumulating more physical capital. They argue that society’s ability to create, disseminate, and apply knowledge is crucial to productivity growth and improved living standards. A key point is that learning does not only occur in schools and universities. It also occurs in businesses, through work, production, innovation, and the interaction between people and organizations. Knowledge can also spread from one business and one part of the economy to others.
The book thus provides an important perspective on why human capital, competence, innovation and learning must be understood as central parts of a society's ability to create value over time.
Why we recommend the book
We recommend Creating a Learning Society because it expands the understanding of what lies behind economic value creation.
Machines, technology and financial capital are important, but they do not create productivity growth alone. Behind the development are people who learn, develop knowledge, improve work processes, share experiences and find new solutions.
This makes the book particularly relevant to Invisible Capital and our perspective on value creation: A significant part of society's value-creating capacity is found in the knowledge, competence, and learning ability of the people who participate in the economy.
Stiglitz and Greenwald thus provide an academic foundation for one of the most important relationships in modern value creation:
The Value of Everything: Making and Taking in the Global Economy
Author: Mariana Mazzucato
Short review
In The Value of Everything, Mariana Mazzucato asks a fundamental question: What exactly is value – and who creates it? Mazzucato returns to the historical discussions of value in economics and shows how the understanding of value creation has changed. She challenges the notion that high income, high prices or large profits necessarily mean that correspondingly large values have been created. One of the book's most important contributions is the distinction between value creation and value extraction . Mazzucato examines the financial sector, the pharmaceutical industry, innovation and the public sector, among others, and argues that we must become better at distinguishing between activities that actually create new values, and activities that primarily extract values that have already been created.
The book also challenges the traditional notion that the private sector creates value while the public sector mainly consumes or redistributes it. Innovation and economic development often arise through a complex interaction between public investment, research, businesses, capital and people.
The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations
Author: Philippe Aghion, Céline Antonin and Simon Bunel
Short review
The Power of Creative Destruction is about one of the most important drivers of long-term economic growth: innovation.
Philippe Aghion, Céline Antonin and Simon Bunel build on Joseph Schumpeter's classic idea of "creative destruction" – the process by which new technologies, businesses, products and ideas challenge and replace existing solutions.
But the book is not just about the disappearance of the old. The authors examine why some economies manage to create continuous innovation and productivity growth, while others stagnate. Competition, entrepreneurship, research, education, institutions and public policy thus become important parts of the explanation.
Creative destruction also comes at a cost. New technologies and businesses create opportunities and jobs, but can also make existing skills, tasks and business models less relevant. The challenge is therefore to create societies that both promote innovation and enable people to participate in the transition.
Why we recommend the book
We recommend The Power of Creative Destruction because it shows why innovation is a fundamental driver of value creation .
Value creation is not just about producing more of what we already produce. It also occurs when people develop new ideas, technology, and ways of working that enable us to solve tasks better than before.
This makes the book particularly relevant to The Invisible Capital. Behind innovation are people with knowledge, expertise, creativity and experience. But Aghion's perspective also shows that human capital must be part of a larger system where competition, institutions, research, investment and policy create the conditions for new ideas to actually turn into economic and social development.
The book thus provides an important context in our understanding of value creation:
Knowledge → new ideas → innovation → productivity growth → long-term value creation.
Institutions, Institutional Change and Economic Performance
Author: Philippe Aghion, Céline Antonin and Simon Bunel
Short review
Institutions, Institutional Change and Economic Performance is one of Douglass C. North's most important works on why some societies are more successful than others in creating economic development over time.
North shifts attention from traditional factors of production such as capital and labor to the institutions that shape how people, businesses, and governments act and cooperate. Institutions are society's formal and informal rules of the game – including laws, regulations, norms, traditions, and established ways of organizing interaction.
These rules of the game affect the incentives that people and organizations face. They also affect investments, knowledge development, cooperation, transaction costs, and which economic activities emerge.
North also shows that institutions develop over time. History therefore matters: Today's economic opportunities are influenced by institutional choices and development paths that can stretch far back in time.
Why we recommend the book
We recommend Institutions, Institutional Change and Economic Performance because it explains a crucial aspect of value creation that easily becomes invisible:
Value creation needs good rules of the game.
People may have knowledge. Businesses may have capital. Entrepreneurs may have great ideas. A society may have natural resources and advanced technology. But outcomes are also influenced by the institutions that determine how people can collaborate, invest, compete, make deals, and develop businesses.
This makes North particularly interesting for our understanding of trust as part of invisible capital. Trust is not the same as institutions, but stable rules of the game, credible agreements, and well-functioning institutions can reduce uncertainty and make economic interaction easier.
North thus gives us another important part of the value creation picture:
Institutions → predictability and incentives → cooperation and investment → productive activity → long-term value creation.
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