CUSTOMER VALUE PROPOSITIONS IN THE CONTEXT OF TECHNOLOGY COMMERCIALIZATION

Many larger, technology incumbent companies involve smaller, high-tech entrepreneurial firms in their innovation processes by outsourcing the development of new products, services, and processes. These R&D firms face the challenge of profitable technology commercialization. In this context, we study the use of customer value propositions and agreements based on these. The problem is that it is not clear how such propositions can be structured under considerable uncertainty. Real options logic seems to lend itself, in principle, to structuring value propositions. However, recent studies have discussed the organizational challenges of applying real options. Hence, we specifically investigate under what conditions real options logic can be an adequate base for the development of the value proposition of a small high-tech entrepreneurial supplier cooperating with a large-scale incumbent firm to develop new technology. We provide empirical support based on two case studies. Ideas for future research conclude this paper.