Co-Creation : Producer Consumer Convergence locus for Value Creation

 

Neither value nor innovation can any longer be successfully and sustainably generated through a company-centric, product-and-service-focused prism.

The meaning of value and the process of value creation are rapidly shifting from a product- and firm-centric view to personalized consumer experiences. Informed, networked, empowered, and active consumers are increasingly co-creating value with the firm. The interaction between the firm and the consumer is becoming the locus of value creation and value extrac-tion

                                                                                C. K. Prahalad and Venkatram Ramaswamy

What was conceptualized a decade back still carries huge relevance as we see this yet to catch up fully in the business structure. While organizations embracing such a model of collaborative innovations through active participation from the customers have moved up the pyramid, the gap still exists at the bottom.

The traditional method of value creation keeps the customers outside the perspective. With advent of technology and digitization and its cheap access to customers, it becomes extremely challenging to develop products and succeed as consumers are more informed due to better knowledge and connectivity to information’s. 

It will be inevitable that the rest of the firms join the best, on shifting the model to co creation. Firms which keep the markets away from the value creation process will be subjected to sustainability risk since customers may ignore them out of choices. 

Enabling the consumers to converge with the production process will make the product carry competitive advantage in the market place thereby achieving sustainability. 

But co-creation demands that both managers and consumers make the necessary adjustments. For example, both must recognize that the interaction between the two—the locus of value creation—must be built on critical building blocks. It must start from access and transparency

The problems can be on transparency. Small and medium term enterprises face major challenge on embracing transparency.  There is a collective responsibility on the part of the Owners of Business and the Change Management Consultants to achieve the culture change. 

This will be a key factor for future sustainability and I would seek an active participation on the part of the change agents in providing their views on how to make culture change happen at the bottom of the pyramid

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T Margabandhu

M/s Marggo India