CIMA E2 Syllabus A. Business models and value creation - Value Creation and Value Capture - Notes ^{2 / 7}

In an ecosystem, the participants come together to bring something of value into existence. This is known as value creation. It can be either in the form of innovating a new product in collaboration with others, or adding features to an already existing product in collaboration with others. 

Value creation is an everyone-to-everyone process of exchange.

Value capture is the process of allocating value to the different participants in an ecosystem.

This can be done in 2 ways:

1. Directly - This is an instant method for value capture. It is done alongside the transactions happening among participants in an ecosystem.  For example, an airline receiving direct payment for a flight booked with them.

2. Indirectly - This is done through an orchestrator. The consumers pay an orchestrator for a number of goods and services and the orchestrator then allocates the value to the different participants. For example, an airline receiving commissions from hotel bookings or cab bookings done on their website.