The Support of Value Co-creation

A Critical Determination of the Internal Organisational, Operational and Structural Elements and External Communication and Human Interaction Requirements

Project Report 2016 10 Pages

Business economics - Offline Marketing and Online Marketing



Co-Creation of Value

Operational and Structural elements for Value Co creation

External communication and human interaction



Co-Creation of Value

Co-creation is a very vast term now a days and its definition differs from context to context and industry to industry. Co-creation has been defined by the Innovation Management as the type of Co-creation which occurs between consumers and the organizations at the beginning of the value chain which is at the early stages of the product development (Roser et al., 2009).

The Context of value and value creation is fluctuating from just a firm or product centered view to a different phenomenon which includes the experience of consumers. As this trend is shift to experiences from Value, the industry or the market is becoming the medium of interaction between the companies and the consumers (Prahalad & Ramaswamy, 2004).

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As explained by Prahalad and Ramaswamy (2004) that Firm-Consumer interaction can be of two types which are either to for the value creation or the interaction on the basis of consumer experience but in both the cases the medium is market through which these interactions are happening. But now the trends are changing, Co-creation is also important within the organization. In this world of decentralization, there are still many firms or companies in which the leaders or the top management decides on major strategies or changes like quality, product lines, services etc. Stakeholders in these case are just a dummy because there is only one entity who is imposing things on the other (Chakraborty & Dobrzykowski, 2014). In the organization, Co-creation is among the employees, product and management etc. because these are the people or processes which are trying to create value for the customer and the feedback, input and their say is very important in these matters to create internal Co-creation in the organization because without internal co-creation the company won’t be able to create value or share experience with the customers (Danelutti, 2012).

Co-creation within the organization can be help in several types e.g. in creating a creative leadership, creativity or innovation in business and Co-creation in decision making. The Co-creation if implemented in the given areas can generate new business idea, service concepts, brand development ideas and promotional ideas. Wikipedia is a website with 1.5 million clicks from volunteer specialists around the globe, in 15 dialects, and 5 million individuals for every month visit it (Hof, 2005). This website could be like any other website where there is only a page of suggestions but the Co-Creation creativity has been applied while developing the website and now any user and add information on it and that’s the kind of interaction every organization wants (Benson, 2013).

Every organization focuses on creating Co-creation value with the consumer but in the case of the stakeholders, it is very limited and that is because Stake holders don’t have much say or authority in the companies and that is why it is difficult to create organizational Co-Creation but management on the other hand can help these stake holders in creating internal co-creation (Grönroos, 2011). A European bank held a series of workshops for its employees and consumers and the bank noticed that their junior advisors that there junior advisors are not so interested and their past performance is very stagnant and they realized that this is happening because they are front desk executives of age 25-35 and their job description is to handle the customers for account opening and cheque clearance which according to the junior staff is a dead end for them. They were not performing well because of not enough knowledge of the investment products whereas their senior managers advised that the junior advisors and unqualified to handle risky products (Andreu et al., 2010). The top management reviewed the situation and launched a new life insurance product which was very less risky than the investment products and junior advisors showed a great piece of interest and saw it as an opportunity to amend their circumstances and start their career the way they wanted to. So that’s how management can show their interest towards the stakeholder and this will increase the interaction with the stakeholder which eventually will increase the co-creational value inside and outside the organisation.

Stakeholders will never participate in the customer co-creation unless it creates value for them too. It is just human nature that the participation and the enthusiasm will be low unless it creates value for them. The best way in such a scenario to create co-creation value is to honor the experience of all the stakeholders not just the customers. The companies should be focusing on providing beneficial experiences for customer, employees, supplier and all the other stakeholders. The key to improve the experiences of the stakeholders is by letting them play a major role in setting up the system of their work with one another. An employee’s experience in the company is the interaction with different people from different departments and the passive approach if used will keep their experience to a mediocre level whereas if employees are given the playground to play with their own will, this will change their quality of experience (Ramaswamy & Gouillart, 2010).

Operational and Structural elements for Value Co creation

For the process of value co creation to be completed efficiently in all phases, there must be a substantial push from the operational structural construct of an organization. The “Internal see” is sometimes more challenging than the “External sell” which is the customer. They are entirely two different things and must be handled separately yet, their integration is necessary. There are hard strategic choices to make about the scope of customer involvement and collaboration. After finding out the synergy to mutual growth, a specific target market of creative customers is chosen. For this “symbiosis” to work effectively it must be supported with operational and structural support from the decision makers at any firm. (Medwelljournals.com, 2016)

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(Stakeholdermap.com, 2016)

In addition, with the operational elements, structural elements within an organization are also mandatory to carve out the best value co creation strategy. The structural elements might include the design of operations, infrastructure, hierarchy, suppliers, and partners. Most of the stake holders take part in deciding the structural depth for the value co creation. The capabilities of sourcing, production, and delivery must also be considered to whilst finalizing the need and demand on different steps of value co creation. A successful business model must depict the content, structure, and governance of the transactions which are designed to create value through the exploitation of business opportunities. (Researchgate.net, 2016)

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(Keskinen, 2012)

Operational integration also plays a major role in the overall structural element of the strategy when you consider the slow adoption of IT which leads to information asymmetries and suboptimal outcomes involving physicians, health care, hospitals, patients and key suppliers. (Dobrzykowski, Tran and Tarafdar, 2010).

Meanwhile, it is also observed that some foundational premises of the service-dominant logic do not fully support the operational and structural demands of value co creation.

That makes the whole procedure of value co creation quite meaningless and vain. Without a complete understanding of the interaction concept, the pivotal point and nature of the value co creation cannot be identified.

Value co creation can easily become a meaningless concept without substance if the mandatory ingredients of operational and structural are missing. It is also observed that the unique contribution of service perspective on business is not that customers will always chip in and become a part of the co creation process but rather under certain situations the service provider can get opportunities to co create value with the customers. (Gronroos, 2011)

External communication and human interaction

“Definition of External communication is the transference and transmission of informational discourse between the different entities including B-B, business to potential customers, suppliers, investors, shareholders and society at large”. Effective communication is important both within an organization and externally. (BBC, 2015)

With the ever changing consumer requirements, increasing competition, and shrinking consumer attention span, it has become extremely difficult to keep the customers loyal to the brand. One of the major strategies which can keep the consumers, suppliers and other externally relevant stake holders intact is by communicating effectively with all the external elements. To relay the link between the business-business interactions and keep a healthy human interaction, external communication must be ensured. Customer supplier interaction mostly stops at the point of purchase which has negative implications on the whole business strategy. Consequently, the shift towards the customization of the products, high involvement of consumers in the production process, increasing attention to consumer needs, and post purchase services have ensured that customer supplier relationship would last more. That is why many successful businesses have incorporated the Co-creation of value in their overall organizational, operational and strategic goal. Yes, it is possible to adopt a Co creation of value approach in all elements of external communication and human interaction requirements that support value co creation but, their scope would differ according to the nature of the product, services or an overall working environment.

Increasingly, by the efforts of consumers and suppliers the firm’s extended network and consumer communities are coming closer which consequently aids the process of value co creation and its spread to all the elements of external communication and human interaction. This fact challenges the basic understanding of the industrial system, assumptions about the value itself, the process of creating value and the ever changing relationship between the business and the consumer, supplier or any other entity. (Tanev. S, Knudsen.M, 2011)

With the advent of social and digital media networks, the make or break of a product is decided on the virtual world of the digital natives. With each information carrying upwards, all data availability, consumer responses, expectations, and all other post purchase comments are available.

Some are taken seriously and are made viral which makes it quite interesting about what message it delivers regarding the external communication of the product or services because a billion people are always online on Facebook, twitter, Instagram offering their reviews about a certain brand. So, for effective external communication the point of proper social and digital media campaign based strategy is mandatory. (Cheffey, 2015)

Source: http://www.joelamantia.com/blog/archives/social_media/hybrids_architectures_for_the_ecology_of_cocreation.html

Consider the example of Burberry, they demonstrated that co creation is the real social media revolution. The process of co creation must not stop at the sales and service interaction as customers can remotely attend the fashion shows and make the purchase decisions there and then. Some also go on and suggest the design improvements to make it just right for themselves, adding to the customization importance. Burberry’s entire marketing strategy revolved allowed the data collection regarding the interactions between the consumers and suppliers. They tailored their brand according to the reviews, demands, expectations, interactions and perceptions of value by consumers. The social media platform is a key enabler, but the ultimate power of the Burberry model is in the co creation among its various departments of internal sales, service, and marketing the major stake holders. (Francis Goillar, Harvard Business review).



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Manchester Metropolitan University Business School
critically value co-creation



Title: The Support of Value Co-creation