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Co‐creating unique value with customers
Abstract
The traditional system of company‐centric value creation (that has served us so well over the past 100 years) is becoming obsolete. Leaders now need a new frame of reference for value creation. In the emergent economy, competition will center on personalized co‐creation experiences, resulting in value that is truly unique to each individual. The authors see a new frontier in value creation emerging, replete with fresh opportunities. In this new frontier the role of the consumer has changed from isolated to connected, from unaware to informed, from passive to active. As a result, companies can no longer act autonomously, designing products, developing production processes, crafting marketing messages, and controlling sales channels with little or no interference from consumers. Armed with new tools and dissatisfied with available choices, consumers want to interact with firms and thereby co‐create value. The use of interaction as a basis for co‐creation is at the crux of our emerging reality. The co‐creation experience of the consumer becomes the very basis of value. The authors offer a DART model for managing co‐creation of value processes.
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“More recently, cocreation is viewed as an appropriate customer-centric mechanism for health care organizations in which value is created with customers rather than for customers [7,8].”
From Improving the Theoretical Understanding Toward Patient-Driven Health Care Innovation Through Online Value Cocreation: Systematic Review (2020) · cites this paper as [7]
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BackgroundBottom-up Economics. Foundations of a Theory of Distributed and Open Value Creation
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BackgroundThe muse with a wandering eye: the influence of public value on coproduction in museums
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Symbiotic Innovation: Getting the Most Out of Collaboration
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How do collaborative systems affect organizational agility and performance in supply chains?
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MethodUnderstanding the relationship of self-service technology quality with user adoption using SSTQUAL
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“Prahalad and Ramaswamy (2004) note that personalized customer experiences, such as the ones that agile sales teams tend to foster are fast becoming the gold standard for value creation.”
InfluentialPathways for the co-evolution of new product development and strategy formation processes
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“In essence, multiple actors within a complex service system both define and create value through interactions (Prahalad and Ramaswamy, 2004).”
BackgroundGetting Real About Virtual Worlds
Gupta, M., Jin, S. H., Sanders, G. L., Sherman, B. A., & Simha, A. (2012) · International Journal of Virtual Communities and Social Networking · doi:10.4018/jvcsn.2012070101 · Cited by 12
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“One way to incorporate users in the NPD process is through codevelopment of products, e.g. to evaluate and improve products under development (Prahalad and Ramaswamy, 2000; 2004).”
MethodInnovation and Teaching Technologies
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“Access was inportant because it allowed the sharing of information and tools available among the clients/associates that are interconnected in this network to present the project (Prahalad & Ramaswamy, 2004a, 2004b).”
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Dondofema, R. A., & Grobbelaar, S. S. S. (2019) · IEEE International Conference on Engineering, Technology and Innovation (ICE/ITMC) · doi:10.1109/ice.2019.8792668 · Cited by 12
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“The business focus should be shifted to co-create unique value with customers rather than the traditional company-centric value creation [57].”
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Dolata, M., Agotai, D., Schubiger, S., et al. (2020) · Proceedings of the ACM on Human-Computer Interaction · doi:10.1145/3415191 · Cited by 11
“In the past, they were framed as service transactions [41, 59] or collaborative problem solving [22, 63, 64, 68] – those perspectives were oriented toward the process of an advisory service encounter.”
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BackgroundService Co-Creation with the Customer: the Role of Information Systems
Grace, A., Finnegan, P., & Butler, T. (2008) · Journal of the Association for Information Systems · Cited by 11
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BackgroundMethodMarketers are consumers too: integrating consumer-self in potential value creation
Carrington, M., & Neville, B. A. (2016) · European Journal of Marketing · doi:10.1108/ejm-03-2015-0185 · Cited by 11
Roosens, B., & Dens, N. (2018) · Journal of Brand Management · doi:10.1057/s41262-018-0126-0 · Cited by 11
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“This view is in line with the proposition to co-opt customers’ competency to increase business competitiveness [44].”
BackgroundResultEngaging employees in value cocreation: interplay among firm, employee, and supervisor
Amin, M., Chan, K. W., Shamim, A., Ghazali, Z., & Lai, F. (2022) · Service Industries Journal · doi:10.1080/02642069.2022.2056164 · Cited by 12
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“In this way, the customer relationships that develop are part of a co-creation process where the customer is involved as the co-creator in the value process (Prahalad and Ramaswamy, 2004).”
BackgroundA consideration of the process of co-creation of value with customers
Fujioka, Y. (2009) · Artificial Life and Robotics · doi:10.1007/s10015-009-0732-8 · Cited by 11
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“, [5], [6], [7] that the engagement of end-users in the co-creation of a system highly increase its quality and its perceived value.”
BackgroundEvolution of a framework of co-creation in political marketing: select cases
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Look Who's Co-creating: Employer Branding on Social Media
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“The empirical findings link the DART-model of value co-creation (Prahalad and Ramaswamy, 2004b) to power and suggest that co-creation value is higher in settings with more balance of power.”
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Shah, S. A. A., Jajja, M. S. S., & Chatha, K. A. (2023) · Journal of Service Theory and Practice · doi:10.1108/jstp-08-2022-0171 · Cited by 10
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“…the authors agree that adoption of the service-dominant logic (Vargo and Lusch 2004), where value is co-created with customers and for customers, is crucial in company–customer interaction (Prahalad and Ramaswamy 2004) and essential in designing sustainable service ecosystems (Field et al. 2021).”
Genuine small talk in hospitality services encounter
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“Prahalad and Ramaswamy proposed the value co-creation theory of consumer experience (Prahalad and Ramaswamy, 2004) [14].”
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Avatar-based Innovation Processes - Are Virtual Worlds a breeding ground for Innovations?
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Metadata
- Authors
- Prahalad, C. K., & Ramaswamy, V.
- Affiliations
- University of Michigan (US)
- Venue
- Strategy & Leadership
- Publisher
- Emerald
- Published
- 2004-06
- Volume
- 32
- Issue
- 3
- Pages
- 4-9
- ISSN
- 0094-064X (ISSN-L)
- 1087-8572
- OpenAlex
- W2046500054
- Cited by
- 2,463
- References
- 0
- Citations by year
- 2026: 131 · 2025: 166 · 2024: 167 · 2023: 149 · 2022: 165 · 2021: 160 · 2020: 130 · 2019: 167 · 2018: 159 · 2017: 144 · 2016: 153 · 2015: 138 · 2014: 148 · 2013: 139 · 2012: 92
- FWCI
- 38.45
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- Strategy and Leadership (publishedVersion)
- Topics
- Social Sciences › Business, Management and Accounting › Marketing › Service and Product Innovation
- Social Sciences › Business, Management and Accounting › Strategy and Management › Business Strategies and Innovation
- Social Sciences › Business, Management and Accounting › Strategy and Management › Innovation and Knowledge Management
- Keywords
- value co-creation, customer co-creation, consumer interaction, consumer empowerment, DART model, value creation, emerging economy, customer experience
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