Collaborative networked organisations and customer communities: value co-creation and co-innovation in the networking era

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

1

Collaborative Networked Organisations and Customer Communities:

Value Co-Creation and Co-Innovation in the Networking Era

David Romero*, Arturo Molina

Tecnológico de Monterrey, Ciudad de México, México

Abstract. Strategic networks such as Collaborative Networked Organisations

(CNOs) and Virtual Customer Communities (VCCs) show a high potential as

drivers of value co-creation and co-innovation. Both look at the network

structures as a source of jointly value creation and open-innovation through

access to new skills, knowledge, markets and technologies by sharing risk and

integrating complementary competencies. This collaborative endeavour is

able to enhance the adaptability and flexibility of CNOs and VCCs value

creating systems in order to react in response to external drivers such as

collaborative (business) opportunities. Strategic business networks are active

entities continuously adapting to their environment in order to enhance their

capabilities to respond to short-term business opportunities, and therefore

allow their business ecosystems to follow the rhythm of industry dynamics,

and customers changing needs and preferences. Value co-creation is the new

trend in open-business models trying to integrate organisations‟ competencies

and involve customers‟ individual preferences into network and community

formations for the co-creation of the next level of value for products, services

and experiences to be launched into the market. This paper presents a

literature review on value co-creation and co-innovation concepts and styles,

and proposes a reference framework for creating interface networks, also

known as „experience-centric networks‟, as enablers for linking networked

organisations and customer communities in order to support the establishment

of sustainable user-driven and collaborative innovation networks.

Keywords: Collaborative Networked Organisations, Customer Communities,

Interactive Marketing, Co-Innovation, Open-Innovation, Value Co-Creation,

Value Systems, Virtual Breeding Environments, Virtual Organisations.

1. Introduction

In today‟s global economy, organisations are collaborating more and more. Thus organisations are

engaging in new forms of highly collaborative mechanisms and networked structures capable of

providing a competitive advantage by combining the best skills or core competencies and resources

of two or more organisations, as well as customer1 knowledge of a product or a service to co-create a

value proposition more compelling and relevant to the consumers‟ needs and expectations. In this sense,

collaborative networks represent a promising paradigm together with customer communities to emphasis

on core competencies, personalisation and innovation, supported by collaborative mechanisms. This

allows the consumer to stamp a product or a service with his/her own applications, preferences and

configurations, and therefore co-create value in a collaborative endeavour (Romero & Molina, 2009).

Collaborative Networked Organisations (CNOs) show a high potential as drivers of value co-creation,

allowing organisations access to new knowledge, sharing risk and resources, joining complementary

skills and capacities, which allow them to focus on their core competencies. In addition, collaborative

networks induce innovation, and thus co-create new sources of value by confrontation of ideas and

practices, combination of resources and technologies, and creation of synergies (Camarinha-Matos &

Afsarmanesh, 2006).

On the other hand, Virtual Customer Communities (VCCs) show a promising (business) value as

“online social networks” capable to leverage all aspects of a product or a service, from product design and

marketing communication to creating the overall brand experience. VCCs can support mass-customisation

strategies by allowing customers to become co-designers of their products and services (Sawhney et al,

2003; Foray, 2004; Fiore et al, 2004; Piller et al, 2005); sales and marketing initiatives through viral

marketing strategies (Anderson, 1998; Subramani & Rajagopalan, 2003); and branding strategies through

connecting customers around the lifestyles associated with their products (McWilliam, 2000; Andersen,

2005).

1 The terms “consumer” and “customer” are used interchangeably throughout this paper.

*Corresponding Author: Tecnológico de Monterrey, Campus Mexico City, Del Puente 222, Col. Ejidos de Huipulco,

Tlalpan, 14380, México, D.F. E-mail: [email protected] Phone +52 55-54831605 Fax +52 55-54831606

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

2

In this context, CNOs working together with VCCs can be seen as a cooperative process of value

co-creation and co-innovation/open-innovation, through which a group of entities enhance the capabilities

of each other by sharing risk, resources, responsibilities, and rewards to co-produce a unique value

proposition for each consumer and stakeholder (Romero & Molina, 2009).

2. Value Co-Creation as a Cooperative Process

A cooperative process is a formal relationship between two or more entities involving substantial time,

commitments, high levels of trust and significant access to each other‟s resources to achieve a common

purpose. Cooperation may involve moderate to extensive mutual sharing of resources and some sharing of

risk, responsibilities and rewards in order to co-create value (Himmelman, 2001).

Furthermore, co-creation can be understood as a cooperative process involving customers and

organisations interactions in all creative activities. The potential of value co-creation is achieved through

developing and exploiting these interactions with the ultimate aim of co-designing and co-producing

the next level of value for a product or a service, exceeding in this way customers‟ greatest expectations

with an entire experience around their favourite products and services.

In this matter, value co-creation can be defined as: “corporations processes for co-creating goods,

services and experiences in close cooperation with experienced and creative consumers, tapping into

their intellectual capital, and in exchange rewarding them for what actually gets co-produced,

co-manufactured, co-developed, co-designed, co-serviced, and/or co-processed” (Trendwatching, 2006).

Value co-creation has shift the traditional idea of value creation, in where customers were seen as

“destroying the value which organisations create for them”, while in alternative the new value creation

paradigm views customers “actively co-creating and re-creating value with organisations” (Ramirez,

1999). Thus, all these changes are setting the stage for an expanded role for customers, in new

co-creation environments, where customers are no longer passive recipients of goods and services;

instead customers are now active partners co-creating value with organisations. As mentioned by

Prahalad & Ramaswamy (2004), in today‟s competitive landscape, organisations as producers of goods

and services cannot exclusively create added-value for customers. Increasingly, value propositions have

to be jointly created by both corporations and consumers as co-producers. In other words, added-value

has to be co-created in successful interactions between customers and corporations - in what we may call

the co-create event - through the personalisation of a product or a service based-on customer‟s specific

needs, conditions and personal taste.

Following this new value co-creation approach, organisations are trying to re-invent their strategies

by participating in collaborative networks in order to maintain their competitive advantages through

the emergence of new value creation practices (e.g. value co-creation, co-innovation/open-innovation)

based-on a continuum of collaboration together with their customer communities.

3. Value Co-Creation Actors

Recent years have seen an unprecedented growth in a large variety of collaborative networks and customer

communities thanks to the advances in information and communication technologies (e.g. Internet,

Web 2.0, Online Social Networking), allowing consumers to enter into a worldwide e-marketplace of

options, and organisation into a global competition. Hence, organisations are increasingly starting to

operate in collaborative networked environments seeking for complementarities that allow them to offer

integral and personal experiences around their products and services for a specific customer at any

specific time, location and context. Furthermore, customers are coming together in online communities

where they are publishing and sharing (e.g. blogging, podcasting) their experiences with products and

services, and therefore evaluating the effectiveness of their producers, vendors and service providers.

Customers are comparing each other‟s experiences, giving feedback to each other, and as a result

customer communities are becoming an important influence in purchase decisions and brand loyalty.

In this scenario, collaborative networks can enable the infrastructures for handling heterogeneity of

experiences and recognising customers‟ individuality across multiple interactive channels (points-of-

interaction). The whole experience will be then co-created around personal added-value products and

services that will be co-produced by experience-centric networks integrated and supported by

collaborative networked organisations and customer communities.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

3

3.1 Collaborative Networked Organisations as Value Networks

Global competition, market dynamism, and advances in information and communication technologies

are opening and challenging new ways of creating value. As a result, the fundamental logic of value

creation based-on sequential value chains (Porter, 1985) is changing into value networks (Haglind &

Helander, 1998; Mariotti, 2002) capable of redesigning their value and therefore reshuffle their structural,

technological, financial and human assets “on-demand” in order to respond to the needs of a short-term

business opportunities (Katzy & Obozinski, 1998; Allee, 2000; Fine et al, 2002). Organisations nowadays

must continually disintegrate and reintegrate themselves in order to quickly and continually assess their

value-chain capabilities for a fast response to the rapidly evolving industry dynamics (Fine et al, 2002)

and customers‟ preferences (Prahalad & Ramaswamy, 2000; 2004). In this sense, collaborative networked

organisations can provide the basis for agility in dynamic and turbulent market conditions (Camarinha-

Matos & Afsarmanesh, 2005; 2006).

A collaborative networked organisation, or simply collaborative network, represents “an association

of largely autonomous, geographically distributed, and heterogeneous organisations in terms of their:

operating environment, culture, social capital, and goals that have come together to collaborate in order

to better achieve common or compatibles goals, and whose interactions are supported by computer

networks” (Camarinha-Matos & Afsarmanesh, 2005; 2006). Furthermore, a value network is defined as

“a virtual web of relationships between two or more organisations that work together to co-create

different forms of value such as goods, services, knowledge and revenue” (Allee, 2005). In this belief,

collaborative networks can be seen as value networks in where a group of organisational entities have

developed a rich web of value co-creation relationships, under a shared belief that they can achieve goals

together that would not be possible, or would have higher cost, if attempted individually (Borys &

Jemison, 1989).

Collaborative networks allow the leverage and rapid configuration of resources in order to integrate

the intellectual and technical leaderships of different organisations‟ competencies needed to establish

an effective and reconfigurable value system to build and sustain an experience-centric network.

The understanding of a value system (Romero et al, 2007a) is based on Parolini‟s notion (1999) that

“each product and service offered requires a set of value creation activities that are performed

by a number of actors forming a value creating system”. These value creation activities, with

the involvement of customers, can lead to a continuous enhancement of existing products and services or

the co-creation of new ones to meet as much as possible the needs of an individual customer who would

like to have a set of particular features in his/her products or would like to use a group services with a set

of particular characteristics.

Therefore, value creation is no longer considered as a linear function, but a collaborative and

co-evolutionary process with partners, allies, suppliers and customers that come together in close

relationships within collaborative networks that aggregate knowledge, resources and activities in

“value constellations” to co-produce value. The key strategic task in these new collaborative networked

environments is the reconfiguration of roles and relationship among the constellations of actors in order

to mobilise the creation of value in new forms and by new players. In other words, the underlying

strategic goal is to create an ever-improving fit between organisations‟ competencies and customers‟

needs (Normann & Ramirez, 1993).

3.2 Customer Communities as Value Co-Creators

Online communication technologies are enhancing the emergence of novel forms of social communities,

often referred as virtual communities, with the ability to engage customers in an on-going dialogue with

other customers and also with the firm. Thus leveraging a customer-based value creation system by

providing a way to interact, learn, conduct transactions, and share valuable knowledge with all the parties

involved in the development and usage of products and services (e.g. e-commerce).

Virtual communities are “groups of people who use communication technologies for repeated social

interaction to meet certain needs” (Preece, 2000). Furthermore, virtual customer communities are

“virtual communities composed mainly of customers who had experience in using products and/or

services” (Tzu-Ying & Jen-Fan, 2004). Most of the virtual customer community members possess

the same interests and experiences. They get together in order to chat online, exchange personal

experiences, and post news about their products and services, so they can learn from others experiences

and acquire information for buying decision-making (Tzu-Ying & Jen-Fan, 2004).

In this scenario, organisations have realised the tremendous business value and benefits (e.g. insights),

that discussion contents in virtual customer communities bring to business processes such as: product

design, marketing and branding, innovation process, etc.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

4

Next paragraphs will introduce some of the different roles that customer communities can play as

co-creators, since customer communities‟ truly revealed themselves with continuous creation of

new knowledge that serves as a new outstanding model of co-innovation/open-innovation and value

co-creation (e.g. open source innovation).

Customers as Co-Designers: Customer‟s participation in both the front-end (idea generation,

conceptualisation) and the back-end (design and testing) phases of - new - product development enhances

the innovation process and thus co-creates more value (Nambisan, 2002). In this sense, customers‟

collaboration can take two particular forms: firstly, it can support continuous - existing - product

developments by allowing those customers that seek particular outcomes in their products and services

to engage in the activities to co-produce them (Sawhner et al, 2003). Thus, customers will be able to make

adjustments and co-develop their products and services according to their personal preferences (Foray,

2004). And secondly, customers‟ participation in a collaborative innovation process by voluntarily

sharing their ideas and experiences for the co-development of the next generation of products and services

in the market (Foray, 2004). At this point of freely exchange of ideas and experiences, it is important

to remark the intellectual property rights issues that could arise. At some point of the collaboration,

customers as collaborators could start asking: “What‟s in it for me?”, so companies should payoff/reward

those customers that succeed to co-create value with the company in order to avoid having dissatisfied

customers, or worse, public battles (Von Krogh, 2006).

Therefore, companies shall engage those customers motivated by the passion for a product in

the process of new product ideation and concept development in interaction with their business allies (e.g.

suppliers) in order to add a new dynamic to the producer-customer relationship by engaging customers

directly in the co-creation of value, in other words, involving the customer at any stage of the value chain.

In summary, virtual customer communities can provide three advantages on companies that want

to enhance their relationship with their customers based-on a co-creation process: First, they give R&D

deeper insights into the customer behaviour and preferences. Second, they reduce the cost of concocting

ideas for new and improved products and services. And third, they enhance loyalty as customers become

emotionally invested in the products they help nurture (Von Krogh, 2006).

Customers as Innovators: In many companies, product development departments can not keep pace

with the need to understand and respond to customers‟ changing needs on an individual level. Therefore,

a successful solution for companies nowadays has become to stop trying to deduce customers‟ desires

(e.g. market research), since R&D has been a costly and inexact process, and instead give customers

toolkits (e.g. modelling, prototyping) to design and develop their own products and services. In this way,

companies may tighten the feedback loop between consumption and production cycles (Thomke & Von

Hippel, 2002).

The new “co-innovation/open-innovation” model is now integrating customers into active roles in

all innovation activities, from idea generation to prototyping, seeking in this way a positive impact in

the degree of innovativeness in the next generation of products and services to be launched into

the market (Nambisan, 2002; Salomo et al, 2003). In this context, users that actively seek innovation are

called “lead-users” and their orientation in innovation projects can enhance product concept effectiveness

through capitalising users‟ knowledge (Ulwick, 2002; Lilien et al, 2002; Prahalad & Ramaswamy, 2003;

Von Hippel, 2005; Hsieh & Chen, 2005).

As mentioned previously, customers‟ collaboration in innovation activities provide organisations with

surprising innovative capabilities. These capabilities can be maximised by the development of virtual

customer communities, which allows lead-users to freely suggest new product ideas that in most of

the cases are significantly more original and valuable than professional developers‟ ideas, since customers

know best what they want, and how, where and when they want it (Kristensson et al, 2004). Thus, online

customer communities‟ participation in product development facilitates proactive learning about

the customer, and leads to better understanding and anticipation of latent customer needs. In this

interaction the value of customer involvement arises (Matthing et al, 2004).

As a conclusion, combining internal sources of information provided by traditional R&D approaches

with lead-users knowledge, provided by their virtual communities, can guide to uncovering tacit and

latent customers‟ needs (e.g. feelings, emotions) that can drive to new products and services to satisfy

customers‟ desires that have not been previously considered (Schubert & Ginsburg, 2000).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

5

Customers as Marketers/Branders: While word-of-mouth marketing has always been an important

factor in consumer decision-making, consumer-accessible technology (e.g. Internet, blogging, podcasting,

online social networks) is nowadays empowering more than ever the word-of-mouth delivery mechanism.

In today‟s networking era, social networking is making professionals rethink the current marketing and

advertising strategies, and therefore calling for new strategies such as alternative communication channels

(e.g. interactive Websites) and innovative marketing strategies like: “viral marketing” - e.g. online

word-of-mouth (Anderson, 1998; Wilson, 2000; Subramani & Rajagopalan, 2003), “event marketing” -

e.g. promotion of interactive conventions (Melnick & Wamm, 2004; Aiken & Campbell, 2005), “lifestyle

marketing” - e.g. fans lifestyle (Kozinets, 2001; Belk et al, 2005) and other “interactive marketing”

strategies (File et al, 1992; Quinton & Harridge-March, 2003).

Furthermore, virtual customer communities represent one of the social network forms with the power

to support interactive marketing strategies and merely create the undreamed customer loyalty. Online

customer communities offer companies a chance to get to know better their customers, through giving

them the ability to easily interact with each other and with the company itself (Armstrong & Hegel,

1997). The idea in this sense is: “give customers the opportunity to participate” (e.g. Web 2.0).

Success in this new world order requires marketers to develop a new perspective, a new skill-set,

and a new role in consumers‟ lives where “customer-generated content” and companies provide

the knowledge, tools and resources to create and manage interactive experience-sharing communities.

Whose purpose is aimed at informing customers about the quality of products, services, brands, or sellers

prior to making a purchase and after it, allowing customers to share their experiences about it. The

phenomenon of customer-generated content is helpful in the areas of spreading reputation, customer

support, discovery of users‟ hidden behaviour, understanding demands and trustable advertisement.

Therefore, managing this type of virtual customer communities is beneficial for marketing, branding and

advertisement activities (Armstrong & Hegel, 1997).

Finally, experience-sharing communities can give consumers a “greater voice”, and consequently

create positives effects in brand equity by providing an important source of information from the brand

and its products, but more particularly from other customers, and so enabling social benefits such as

promoting brand legitimacy. In short words: “the brand is the experience and the experience is the brand”

(Dayal et al, 2000; Muñiz & O‟Guinn, 2001).

Customers as Socially Responsible Actors: One topic that has gained a strong presence in the last

years is “social responsibility”. Social responsibility does not have a universally accepted definition, but it

can be understood as a concept which encourages all actors in society (e.g. organisations, governments,

citizens) to consider the interests of their local community and society at large by taking responsibility

for the impact of their activities in their surrounding districts and the environment in all aspects of their

daily-life.

Based on this philosophy, a new generation of “conscious consumers” has emerged, considering

healthy and sustainable lifestyles, and worried about the sustainable development. This trend has been

translated in major restrictions of ecological character for organisations, becoming an important factor in

customers‟ buying habits (choices) the corporate social responsible activities exercised by organisations

(Aburdene, 2005).

Examples like Greenpeace.org or other NGOs, with their corresponding world wide social

communities, most of them supported by computer networks, can be viewed as networks of conscious

consumers that represent an opportunity to involve them in the co-creation of new products and services

that meet customers‟ expectations on economic, environmental and social performance. The essence of

this dialogue is the co-creation of a shared understanding by all actors in society, mainly organisations

and customers, about their commitment to the creation of sustainable value (OECD, 2000; EC, 2002;

OE SMEs, 2002).

In the end of the day, customers‟ and organisations‟ social responsibility can be abbreviated to a set of

duties and responsibilities for planning, implementing and monitoring corporate social responsibility

programmes. As a result, customers can become real judges responsible for determining the effectiveness

of corporate social responsible activities, and in coalition with the organisations, help them with their

duties of periodic reporting “annual reports” to the society about sustainable creation of wealth (value)

for all stakeholders in the business ecosystem.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

6

4. Value Co-Creation / Co-Innovation Activities

After reviewing some of the different roles that customers can play as co-creators of value, now it is time

to approach the different principles of co-creation that companies are currently pursuing. In this trend,

one important aspect to state is the nature of the value co-created, since value can be delivered to

the customer in the form of tangible goods, with a fixed set of features and attributes, or in the form of

intangible services and experiences, with high knowledge content. In both cases, what is important to

remark is that the “locus of value co-creation” will be at the degree of personalisation of a good or

a service, along with the quality of the overall experience (interactions) in the journey to reach

the expected outcome by the customer. Therefore, considering this and other factors involved in the value

co-creation process, the OMC Group Insight (Lawer, 2006) was able to propose a kind of typology

describing eight styles of value co-creation that organisations are practising nowadays with different

levels of firm-customer interaction and customer involvement.

(1) Product “Finishing”: This mode of value co-creation represents one of the first organisational

intents to provide customers with an active role in the value creation process by allowing them to

customise a set of pre-defined features in the appearance of a product design with their own personal taste

(e.g. decoration). In this sense, consumers appear to be motivated by the idea of creating a product that

could help to generate a unique fashion style (Stanforth, 1995). The appearance (the look) of a product

comprises aspects such as colours, shapes, patterns, layouts, and typefaces. Therefore, “appearance

customisation” requires extensive capabilities in organisations, and perhaps also in consumers, for

quickly and easily customise the appearance of a group of pre-defined custom designs that can be applied

to a few products based-on customer‟s choice (Fiore et al, 2004). Furthermore, this style of value

co-creation can also include the “self-service” models that allow customers to complete the value creation

process by assembling their own a product or serving themselves in a service (Howard & Worboys, 2003).

To conclude, this approach for value co-creation offers low transaction costs (e.g. do-it-yourself),

a very tempting carrot, but in opposition it can erode customer satisfaction and loyalty because of

the weak interaction firm-customer, since there is just one single contact at the last link of the value chain:

product delivery (Alcock & Millard, 2006) (e.g. IKEA).

Table 1 Product Finishing: IKEA Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

Product

Finishing

The customer is

the last link in IKEA

value chain with an

active role finishing

the product.

PROducer +

ConSUMER

=

PROSUMER

self-service

do-it-yourself

Customer:

- Product Assembly

- Product Delivery

Producer:

- Make-to-Order

IKEA outsource some

labour to the customer

saving costs in

manufacturing, storage

and distribution.

IKEA cost savings

allow offering more

attractive prices to

the customer in

return of its labour.

(2) New Product Design and Development (Lead-Users): This style of value co-creation refers

to the incorporation of “lead-users” into product design and testing (Nambisan, 2002). Lead-users are

consumers of products or services currently experience needs still unknown to the firm, and even to

the society. Lead-users are those pushing the boundaries of current solutions available in the market,

using their inventive to adapt what they use to better fit what they need, becoming in this way a real

source of innovation motivated by the strong necessity to satisfy their needs (Von Hippel, 2005).

Therefore, organisations should work closely and continuously with their lead-users in order to keep-up

with customers changing needs and potential requirements in the near future. In this way, organisations

will have the opportunity to co-develop products and services that will provide a solution for customers‟

current and prospect needs. This mode of value co-creation can provide engineers and also sellers with

good insights about what the customers are currently demanding and will demand in the near future,

allowing the organisation to anticipate to these requirements and offer real added-value products and

services that try to achieve customer satisfaction in the short- and long-term.

Additionally to lead-users, in recent years, companies have also utilised “early-adopters”, as consumers

who embrace new products or services before most people do, and “beta-testers”, as consumers with

a commitment to test and provide ongoing enhancement to a product or a service before its release to

the market, ensuring a high quality in final version. Both groups of consumers can enhance the reputation

of a product or a service, and serve as social leaders promoting innovation by using/testing a product,

service or technology that is trying to gain momentum.

As a final point, lead-users, early-adaptors, and beta-testers receive from organisations a position

to intensively interact with the company during new product development period (design and testing) and

benefit significantly by obtaining a solution to their needs, and at the same time help organisations with

their innovation process. Both, organisations and customers can get a head on what is coming and

together co-create the next generation of products and services be release into the market (e.g.

Procter &Gamble, Silicon Graphics, Volvo XC90, Harley Davison, Saturn Cars).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

7

Table 2 New Product Design & Development (Lead-Users): P&G‟s Connect & Develop Program Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

New Product

Design and

Development

(Lead-Users)

Lead-users and creative

minds are invited into

P&G to joint the new

product development

team to share its ideas,

needs and desires, and

also to test some new

product developments.

Engineers +

Marketers +

Lead-Users

=

Innovation

Team

Brainstorming

Focus-Groups

Open-Innovation

Platforms

Customer:

- Discover latent needs

in the market.

- Provide fresh insights

about existing products.

Producer:

- Design and develop

new products based-on

lead-user insights.

- Bring to the market

products conceived

by their potential

consumers.

P&G ideas sourcing

tool (named: connect

& develop program)

results in highly

innovative products

foreseen by lead-

users, and helps

to increase revenues

in niche or new

markets.

Lead-users ideas and

fresh insights help

P&G to innovative

faster with new

products that comply

with the customers

emerging needs.

(3) Existing Product Adaptation (Customer Feedback): This mode of value co-creation involves

bridging customer relationship best practices (e.g. Customer Relationship Management tools) with

product lifecycle strategies (e.g. Product Lifecycle Management tools) to involve customers into product

feedback process, also known as product requirements planning or prioritisation. Customer feedback

refers to an organisational commitment to continual improvement. Customer feedback also refers to

an active dialogue with consumers for listening what they want to say, and react based-on their opinions,

observations, concerns and suggestions to improve products, processes and services. Furthermore,

customers‟ feedback can be in the form of information requested to the customer (e.g. customer surveys,

customer-service reports, focus groups), but also be in the form of there unsolicited comments or

complaints, in both forms paying attention to what the consumer want to say is the key for customer

satisfaction and retention.

Listening the customer‟s voice has been always a good way to obtain ideas and insights for successful

product adaptation, but a much better way has been putting in the hands of a limited number of consumers

prototypes/products to observe and gain feedback on how the design and features of a product can be

improved. Therefore, successful organisations today are those capable to quickly adapt different versions

of their products and services according to instant consumer feedback with a real agile product adaptation

model competent to support short product release cycles based-on frequent feedback (Boztepe, 2005).

Lastly, existing product adaptation is a process of continuous value offer improvement aimed at

guarantee that customers are receiving what they really want and that organisations are performing at

the level of consumers‟ expectations (e.g. Sony Antenna Shops, Cisco Knowledge Centre, and Microsoft

Knowledge Base).

Table 3 Existing Product Adaptation: Microsoft Knowledge Base Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

Existing

Product

Adaptation

(Customer

Feedback)

Microsoft strategy to

develop new service

packs for continuously

improve its software

applications based-on

its community of users

using/testing different

programs & identifying

bugs on them, so

engineers and expert

users can solve these

problems and post their

solutions in a knowledge

base so other users can

search for solutions for

their problems.

Engineers +

Expert Users +

Normal Users

=

New

Customer

Service Team

Customer

Service

Knowledge Base

Platforms

Updates

Services

Customer:

- Post new bugs identified

in different programs.

- Search & find solutions

for software application

problems.

Producer:

- Post solutions to different

programs problems.

- Develop new service

packs as part of softwares

updates services.

Microsoft

continuously

receives feedback

from the users

to repair bugs in

its software

applications in order

to improve them.

Customers

continuously receive

from Microsoft

solutions and

updates to fix their

problems and

improve their

software

applications.

(4) Mass-Customisation: This style of value co-creation obeys to a growing market demand in

the personalisation of products and services. Mass-customisation represents ones of the organisational

attempts to provide unique value to the customer in an efficient manner, in other words, offer low-cost,

high quality and variety of value offers to satisfy customer‟s individual needs.

From consumer‟s perspective, mass-customisation refers to a customer co-design process, limited to a

set of choices or options regarding a certain features to be personalised in a standard product or service

template. From organisational perspective, mass-customisation refers to a flexible and responsive value

creation system (e.g. manufacturing system) capable of producing or offering products and/or services

tailored by the customer‟s specifications. Therefore, the challenges for organisations in this mode of value

co-creation are to embrace a closer interaction with the customer, in order to acquire information that can

be used in the production process to meet certain specific requirements; to empower customers to become

collaborators in the process of designing products or services to meet their specific needs regarding

certain product features; and to develop organisational capability to transfer customers needs and desires

into concrete product specifications (Piller et al, 2005; Zhelka, 2005).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

8

In conclusion, mass-customisation seeks the establishment of an outgoing interaction firm-customer

to build up a lasting relationship for customers‟ deep involvement in the adequacies of products and

services features to fulfil each particular demand by offering individually customised products

and services (Fiore et al, 2004) (e.g. My Adidas, Nike iD, DELL, Car Manufacturers).

Table 4 Mass-Customisation: Nike iD Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

Mass-

Customisation

Nike offers pre-

determined options

to the customer to

customise its shoes,

letting him/her to

participate in the

design process.

Manufacture

+ Users as

Co-designers

=

Custom

Shoes

Customisation

Tools

Customer:

- Product Co-design

Producer:

- Mass Customisation

Nike facilitates a

product and the

tools that allow

those customers

willing to pay a

premium price to

design their own

shoes, increasing

Nike value offer

(utility).

Customers can

customise certain

elements of their

Nike shoes to meet

their personal taste

with regard to

buying a shoe with

a standard design.

(5) Open Community Ideation and Product Design & Development: This mode of value

co-creation refers to “creative innovation thanks to the wisdom of crowds”. Open community ideation

expression describes a collaborative and pro-active behaviour within social innovation networks

encouraging and harvesting the creativity of all its members to conceive fresh ideas for the design and

development of new products, processes and services, or the improvement of existing ones. Therefore,

customer collaboration innovation communities represent social network environments with promising

opportunities to capture a greater number of profitable ideas, through the incorporation of customers‟

thoughts (ideas) in a more quick and efficient way than using the traditional R&D approaches, into

product design and development processes. Additionally, organisations can demonstrate by following this

approach a greater commitment to serve to the specific and changing customers‟ needs by include them

into the value creation process (Piller et al, 2005).

Summarising, the openness in this type of community model represents an enabling factor for

unlocking creativity and innovation in customers and engineers, allowing them to share their wildest ideas

without restrictions, hopping that in this may any member in the community can get inspired to come up

with a set of workable ideas that can really contribute to the development of a more rich knowledge base

about needs and applications which should be translated sooner or later into concrete production

specifications to craft products, solutions, and services for the customers. An open community of ideation

is build upon users in a collaborative endeavour with organisations, and the second ones should be

responsible for capturing the largest number of contributions (ideas) from their engineers and customers

for the design and development of a high valuable offer (product, service, or both) using the power of

networks around a common interest or need. Finally, an open community of ideation represents a space

without boundaries to free customers and engineers minds for the co-creation of innovative value offers

(Piller et al, 2005) (e.g. Computer Games, Linux, LEGO Mindstorms, Firefox, and Sugar CRM).

Table 5 Open Community Ideation and Product Design & Development: LEGO Mindstroms Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

Open

Community

Ideation and

Product Design

& Development

LEGO strategy for

developing and

marketing new

interactive products

in a collaborative

process with users.

Manufacturer

& Users as

Designers

=

Lego Factory

Team

Creative

Tool-Kit

Customer:

- Products Co-design

- Products Animation

Producer:

- Tool-Kit Provider

LEGO integrates

the customer into

the innovation and

marketing processes

in order to design,

develop and sale

the best products.

Customers can

virtually design their

own products and

order the customised

set of blocks to build

them and also they

can program them

to be animated.

(6) New Service Design: This style of value co-creation is similar to the “New Product Design and

Development” approach, but with some differences regarding the value offer design implications, since

the process of new service design is distinguished from new product design for its intangible nature,

difficult standardisation, and impossibility to be stocked because service production and consumption are

inseparable (Bateson, 1977). Current practices in service design are challenging because formalisation of

service innovation process is difficult, since in general is required a knowledge pre-requisite about the

specific aspects of services design. In other words, in order to design a new service it its required to create

a short life-cycle channel to interact with the customer for feedback about a given set of service

requirements, even so the design and development of a new service is often a result of customer feedback,

but in case that feedback is requested, the typical service design process involves establishing contact

with the customer and start by setting objectives, generating ideas, and analysing them to test a service

to see if it may meet customer needs.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

9

In few words, service design process requires a concept development phase (identification and

specification of customers‟ needs and requirements) to provide detailed service information required

to design a process with the balance of service quality versus costs to deliver services that satisfy the

needs, desires, or aspirations of customers.

Last but not least, the service design process starts to present some elements of the “Personalised

Experience Value and Knowledge Co-creation” mode of value co-creation by considering that a service is

assembled from multiple interaction-points with the customer that come together to co-create a consistent

and compelling perception about the quality of a service towards real customer satisfaction (Sawhner

et al, 2003; Matthing et al, 2004) (e.g. TeliaSonera Mobile Phone Network, Alaris Medical Systems).

Table 6 New Service Design: TeliaSonera Mobile Phone Network Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

New

Service Design

TeliaSonera strategy

allows the customer

to test most of its

mobile services with

certain limitations so

the customer can get

familiar with them

and choose those

services that satisfy

its personal needs.

Service

Provider +

User as

Service

Designer &

Configurator

=

New Service

Configurations

Service

Configuration

Tools

Customer:

- Servicer Designer

- Service Configuration

Producer:

- Service Provider

TeliaSonera

provides mobile

services (telephony,

text and multimedia

messaging, Internet

access, etc.) that are

configured by the

customer according

its personal needs,

allowing TeliaSonera

to create revenues

streams based-on a

pay-for-service

model.

Customers receive

and pay just for

those services that

better suit their

communication

service needs.

(7) Real-Time Marketing and Service Adaptation: The valuation of products and services will

always depend strongly on customer perspective, according to his/her specific needs in certain time,

location and context. Thus, service adaptation and on-demand customisation are required nowadays

to satisfy customers‟ needs in the right moment, place and way. Hence, with higher adaptability in a value

creation system to enhance service features through incorporating interactivity into the configuration of

service components, the higher service value (and profitability), since the value creation system is capable

of satisfying the specific current needs of a customer with a tailored service. In today‟s business world,

reducing time-to-market is the only way to address customer needs at runtime, and this ability is the key

factor to respond successfully to the existing business opportunities, strongly related to the present

customers needs (Tien and Berg, 2003).

This style of value co-creation tries to provide a more direct interaction between the customer and

the service provider, allowing the customer to play a more active role in the service adaptation process,

and therefore in a real-time value co-creation process. Thus, higher levels of customer interaction are

required to facilitate dialogue (communication) between the firm and the individual customer, and in this

sense ICT-infrastructures plays a key factor as enablers of intelligent customer interaction platforms that

represent a service creation environment in which service adaptation is tailored by the customer on

the concept of context of use and related to a service level agreement negotiated with the service provider.

In order to conclude, service adaptation frequently falls on the shoulders of frontline customer contact

employees, meaning that real-time marketing and service adaptation depends more on employees‟ ability

to perform the complex customisation task through an interpersonal interaction with the customer, that on

technology that just represents a tool that helps to facilitate a communication channel during the process

of service customisation (Gwinner, 2005) (e.g. Contact Centre Dialogue, CEMEX, FEDEX Tracking

Systems).

Table 7 Real-Time Marketing and Service Adaptation: FEDEX Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

Real-Time

Marketing

and Service

Adaptation

FEDEX service

strategy offers a

catalogue of services

to be selected by the

customer according

to its needs and

preferences, together

with some optional

adding value services

such as: package

insurance, tracking,

delivering

confirmation, etc.

Servicer

Provider +

User as

Servicer

Selector

=

Service

Adaptation

Service

Provision

Platforms

Customer:

- Service Features Selection

Producer:

- Service Provider based-on

a catalogue, including some

added-value services.

FEDEX adapts its

service based-on a

catalogue from

which the customer

can select different

mailing features

such as: traditional

or express deliver,

insurance amount

for its package, etc.

and complements it

value offer with

some free additional

added-value services

to win the customer

preference.

Customers will

receive more than

a typical mailing

service including

some other added-

value services that

guarantee the safe

package delivery:

e.g. Insured in case

of lost or damage,

package tracking

during the mailing

process, and

confirmation of

who received and at

what time and date

the package.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

10

(8) Personalised Experience Value and Knowledge Co-Creation: Finally, this is the new

value co-creation style promoted by Prahalad & Ramaswamy (2004) where the firm and the customer

interact within an experience environment to co-create unique experiences of value, or an “experience of

one”. The personalised experience of a value co-creation process is about high-quality interactions with

individual customers with the aim of engaging consumers and organisations in an on-going dialogue

about the pros and cons of tailoring a product or a service, allowing them to make joint decisions about

the principles of informed choices, and recognising the cost, quality and risk/safety implications of

the choices made.

By engaging in an on-going dialogue consumers and organisation both can evaluate jointly their

choices as they go along in the value co-creation process of a product or a service that serve as facilitator

to deliver the co-creation experience. The value co-creation process gives the customer an experience of

greater level of knowledge and expertise about the product or the service that he/she helps to co-construct,

and of course a greater level of self-esteem that could be translated into customer satisfaction; and on

the other hand, organisations (engineers) feel that they have more insights about customers‟ individual

desires to serve better to their specific needs. The basis of value therefore shifts from physical

products/services (outputs) to a total co-creation experience, which includes the whole product/service

lifecycle from its co-design to its delivery. As well as other interactions with the customer that enhance

consumers‟ trust in company‟s capabilities to co-construct unique value, which implies personal meaning

to customers knowledge, insight, enjoyment, satisfaction, and excitement during their individual

involvement in the value co-creation process and its derivation on an on-demand experience in a specific

context of space and time, and for a specific event or need (Ramaswamy, 2006).

In this new value co-creation mode, managers must attend to the quality of co-creation experiences

(e.g. experience quality management), and not just the quality of the firms products, processes and

services (e.g. total quality management), considering that quality depends on the infrastructure for

interaction (the experience environment) and the quality of service attendance (dialogue/interaction)

between company‟s employees and the consumer. Therefore, the organisational challenge relies on

understanding how customers differ in their perceptions of experience attributes (e.g. convenience

factors) in order to create the organisational capabilities to be able to grant customer wishes and

aspirations and solve its frustrations in different experience-based forms of value that rely on a

combination of sensory and rational judgement of value, because products or services could be the same

but the customer co-constructs different and unique experiences of value (Ramaswamy, 2006)

(e.g. iPod/iTunes, AMAZON, MEDTRONICS, JOHN DEERE, ON STAR).

Table 8 Personalised Experience Value and Knowledge Co-Creation: iPod/iTunes by Apple Example Strategy Description Actors Interaction Value Activities Producer Value Customer Value

Personalised

Experience

Value and

Knowledge

Co-Creation

Apple offers multiple

experiences to their

customers when

they buy an iPOD,

through iTunes

interactive platform,

allowing them to

personalise and add

content to their

devices and evolve

them by acquiring

and installing new

gadgets on them.

Experiences

Providers +

Users =

Unique

Experiences

Interactive

Platforms

Customer:

- Interact

- Experience

Producer:

- Experiences Providers

Apple using iTunes

platform creates

an open dialogue

channel with

the iPod owners,

through which can

help the customer

to evolve and live

new experiences

with its product by

personalising it with

new gadgets that are

sale or some of them

provided for free in

the iTunes store.

Apple iTunes

platform allows

the iPod owners

to reproduce their

music and videos,

organise their

playing-lists, buy

music and videos

over the Internet,

receive music news

according to their

preferences (new

releases, concerts,

etc.), keep statistics

of the music listen

and videos watched,

listen to Internet

radio stations, etc.

living multiple

experiences.

In summary, what can be concluded of this section is that each style of value co-creation requires

different capabilities in organisations to get effectively involved in the value co-creation process together

with their customers, and of course that some of the co-creation modes can be overlapped in a combined

strategy for value co-creation. Following section will present a reference framework as a first intent

towards the formalisation of a methodology for building and sustaining experience-centric networks

conformed by collaborative networked organisations and customer communities.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

11

5. A Experience-Centric Network Reference Framework

Conventional ways of gaining competitive advantages like cost, quality and response-time will not go

away, but in order to compete successfully in the future companies will require building new capabilities

to create value through experiences 2

together with their customers, rather than based-on the traditional

product-centric approach (Prahalad & Ramaswamy, 2004). Building new capabilities to compete in

the future implies the design and development of innovative experience environments supported

by collaborative ICT-infrastructures. This enables the interaction between customers‟ communities and

networked organisations participating in experience-centric networks that promote/allow the co-creation

of value. Therefore shifting the bases of competition from products and services to experiences (Romero

& Molina, 2009).

Creating experience-centric networks (interface networks)3 requires crafting highly interactive and

collaborative experience environments (e-platforms), and multiple experience gateways, that work as

communication spaces and channels for firm-customer interaction allowing the consumer to shape

his/her own personal experiences in a ubiquitous context in a fast, simple, opportune, and secure

way. Following paragraphs will depict a reference framework (see Fig. 1) as a synthetic structure of

guidelines for describing a set of concepts, methods and technologies necessary for creating successful

experience-centric networks and their supporting experience environments (Romero & Molina, 2009).

Experience-Centric Network

Experience Environments

Value Co-Creation

Strategy Definition

Co-Creators Targeting

(Business Allies)

Trust

Building

Capabilities

Provisioning

Rewarding

Mechanisms

Collaborative Networked

Organisations

Customer

CommunitiesInteraction Channels

Co-Creators Targeting

(Customers)

Fig. 1 Experience-Centric Network Reference Framework (Romero & Molina, 2009)

(1) Value Co-Creation Strategy Definition. Strategy helps organisations to be prepared for

competing in the future. A strategy definition allows organisations to identify new opportunities to bring

value to their customers and stakeholders. A value co-creation strategy refers to the description of

the manner in which a network of organisation intents to gain competitive advantage by involving their

customers and business allies in a jointly value creation process. A value co-creation strategy describes

the actions aimed at configuring a value co-creation system as a set of people, organisations and

technology acting as a symbiotic business ecosystem in which organisations and customers interact in

dynamic and reciprocal relations towards their commitment in the process of co-producing offerings:

products, services and experiences, in a mutually beneficial producer/customer relationship (Normman &

Ramirez, 1993). In this sense, value should be understood as the benefits created from helping customers

to achieve their desires and aspirations with their products and services (experiences), and as a result of

the revenue created from tailoring customer individual requirements (Romero & Molina, 2009).

2 Experience(s) – Interactions between customer and producer for personalising/shaping a product or

service based upon the customer‟s specific needs and situations (e.g. context). 3 Interface Network – A meta-network compromising a network of enterprises (designers, manufactures,

brokers, etc.) merged with a network of (lead) customers, which is supported by an adequate

collaboration platform and infrastructure, creating a synergetic innovation ecosystem.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

12

Furthermore, a strategy is adaptable by nature rather than a rigid set of instructions of how to create

value. Hence, business models as definers of the value creation priorities in an organisation should be

continuously reviewed in response to actual and possible changes in perceived market conditions (e.g.

business intelligence) and evolve the enterprise strategy as the business environment and customers‟

needs change (Romero & Molina, 2009).

In a value co-creation context, strategies and business models are continuously shaped over time in

a discovering process of new sources of value and new opportunities and ways for co-creating it

by/for the customers and organisations in a short- and long-term. Therefore, strategy definition will be a

process of continuous discovery, active learning and adaptation within an agile business ecosystem

capable of accessing new competencies, rapidly re-allocating resources and leveraging the organisational

capabilities and capacities to compete based-on experiences (Romero & Molina, 2009).

(2) Co-Creators Targeting. Selecting the right criteria to target the right co-creators is a major task in

the process of constructing effective co-creation partnerships with customers and business allies. Therefore

when selecting the most suitable co-creators two things are important to bear in mind: Not all customers

can be good co-creators. This role depends on their complementary competencies understood as

their knowledge, skills, expertise and behaviours (Vakola et al, 2007) in the experience co-creation

domain, added to their enthusiastic attitudes to enhance existing products (features) or services

(characteristics) to match customers‟ requirements or co-create new ones that will serve to the new

consumers‟ necessities. Furthermore, also not all business allies can be good co-creators. This role also

depends on the organisations‟ complementary competencies understood as their processes capabilities

and resources capacities (Ermilova & Afsarmanesh, 2006) that are required to co-produce products and

services that serve as recipients to deliver co-creation experiences (Romero & Molina, 2009).

Some aspects to keep in mind when targeting the right co-creators include defining the kind of

partnership to be established, making clear its aims as a set of common interests and understandings of

the joint goals and the requirements for working together in a trustable cognitive, normative and affective

collaborative environment based-on dialogue and common values to integrate complementary expertises

to co-create value (Ståhle & Laento, 2000).

After targeting the right co-creators, then it is time to obtain their commitment to act jointly to co-

create value in collaboration (business) opportunities. The next two elements of the reference framework

will focus on this challenge by suggesting the creation of collaborative networked organisations as

dynamic organisational forms able to rapidly establish and adapt to changing market conditions such as

customers‟ needs and preferences (Camarinha-Matos & Afsarmanesh, 2005; 2006); and the creation of

virtual customer communities as experience-sharing and user communities aimed to inform and allow

consumers to discuss about the quality and drawbacks of products and services prior to making a

purchase, and after the purchase is made, help them to use at best their products and services by making

them aware of all their potentialities and if necessary assisting them to solve their problems (Curien et al,

2007).

(3) Collaborative Networked Organisation Creation. In today‟s society, value creation has become

far more dependent on intangibles such as knowledge, relationships and branding, and very soon on

experiences. Thus, characteristics such as flexibility, agility and adaptability have become the new

key organisational success factors to deliver customer value, which has also become increasingly

complex, dynamic, and dependent upon consumers‟ expectations. Therefore, the possibility of rapidly

configuring a group of organisations into a goal-oriented network, like the “classical” virtual organisation,

triggered by a value co-creation opportunity and specially tailored to satisfy customer‟s specific

requirements is frequently mentioned as an expression of agility in customer value delivery (Romero &

Molina, 2009).

Virtual Organisations (VOs) represent temporary alliances of organisations driven by the objective

of grasping a single collaboration opportunity and dissolve once their mission/goal has been

accomplished. Its temporary nature has proven to better fit the market dynamics and the variable duration

of today‟s business opportunities (e.g. time-to-market), and its VO partners‟ competencies integration

to better respond to customers‟ specific needs and requirements. Nevertheless, the effective creation of

truly dynamic VOs, which are appropriate for catching-up with customers‟ continues changing

preferences, since customer value is contextual, requires the pre-existence of suitable VO Breeding

Environments (VBEs) meant for preparing organisations to rapidly get involved in collaboration

opportunity-based VOs (Camarinha-Matos & Afsarmanesh, 2006; 2007).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

13

VBEs are aimed at adhering a group of organisations and their support institutions into a base

long-term cooperation agreement, and the adoption of common operating principles and infrastructures,

with the main goal of increasing both their chances and their preparedness towards collaboration in

potential VOs. Furthermore, VBEs guarantee the readiness of its members to quickly get engaged in

dynamic VOs by reducing the set-up times in contrast of selecting organisations from an “open universe”

of companies that have never collaborated before (Camarinha-Matos & Afsarmanesh, 2006; 2007).

Once a collaborative network has the conditions provided by a VBE to support the rapid and fluid

configuration of VOs when a co-creation opportunity arises, the possibility of creating or redesigning a

value creation system on-demand as a co-operative venture among business allies will emerge from

the breeding environment with the capability and capacity to address each co-creation opportunity with a

tailored value creation system that fits exactly with customer specific requirements (See Fig. 2). In this

sense, each co-creation opportunity will denote a VO creation process with its corresponding custom-

made value creation system within the VBE, integrating the skills or core competencies and resources of

the business allies (VO partners) involved for adequately supporting a co-creation opportunity together

with the customer involvement and its specific needs. Under these conditions and according to

VO lifecycle (creation/operation-evolution/dissolution) each value creation system will be organisationally

and technically integrated to co-create value for a specific customer and just for the period of existence of

the co-creation opportunity which is being responded at the moment (Katzy & Obozinski, 1998; Allee,

2000; Fine et al, 2002; Camarinha-Matos & Afsarmanesh, 2006; 2007; Romero & Molina, 2009).

Finally, the possibility of systematically integrating VO partners‟ skills and resources in short-term

coalition to serve customers‟ specific requirements represents a new source of sustainable competitive

advantage in a changing global market of evolving and emerging customer needs (Katzy & Obozinski,

1998; Camarinha-Matos & Afsarmanesh, 2006; 2007).

VO

VBECollaborative

Networked

Organisations

Value System Redesign

On-demand

Open

Industry

Co-Creation

driven VOs

Fig. 2 VO Creation within VO Breeding Environments driven by Co-Creation Opportunities

(Adapted from Camarinha-Matos & Afsarmanesh, 2007)

(4) Customer Communities Creation. Promoting the creation of virtual customer communities

provides companies with new interaction channels to co-create value through customer relationship,

by incorporating enthusiastic consumers that would be difficult to reach without the support of

information and communities technologies (Tzu-Ying & Jen-Fan, 2004). Virtual customer communities

represent valuable forums in which organisation‟s products and services, together with customer service,

can be discussed, analysed, criticised and potentially improved. Customer communities stand for real

living laboratories in where multiple users (consumers) of the same or different products or services can

come together to discuss the quality and satisfaction level of their current products and services,

or comment about ideas for new ones, outside of the commercial negotiation. The social interaction

among customers in this kind of virtual communities represents potentially insightful exchange

of business intelligence, and a great possibility to foster companies‟ inter-relationships with their

consumers (Manville, 2004).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

14

10 best practices for building and facilitating online customer communities according to Communispace

Corporation (2004) are: (1) Invite the right customers, keep the communities private & small, and

categorise customers to uncover interests, passions and willingness to participate - avoiding using simply

demographic and geographic criteria. (2) View community members as advisors to the company,

not as a market research panel. (3) Find the “social glue” by focusing on topics of shared interest and

relevance for the community, rather on just company‟s interests. (4) Work at building the community

by creating activities/rituals that help customers to feel comfortable in participating. (5) Be a genuine,

open and encourage community‟s facilitator by reinforcing proactive behaviour. (6) “Just plain ask”,

the best way is to just ask, simply and straightforwardly. (7) Pay even more attention to what members

initiate, the best insights often come from discussions started by members - “listen more than ask”.

(8) Don‟t squelch the negative, the best lessons come from hearing about those things that annoy,

disappoint or outrage customers, so encourage members to give the good, bad and the ugly. (9) Don‟t ask

members for too much too often or they will become fatigued. (10) Make sure the community is built on

multiple underlying technologies and methodologies so that people aren‟t stuck just answering surveys or

posting to message boards (e.g. live-chats, visual profiles, upload advertisements, video-diaries, etc.).

Furthermore, virtual customer communities represent part of the knowledge revolution in where vast

complement of knowledge and understanding can be tapped from customers, and combined with skilled

and experienced knowledge workers (engineers as co-creators) in a greater customer intimacy and

synergetic win-win situations (co-creation opportunities) to improve products and services by

collaborating in a jointly value creation process to co-create products and services specially tailored

to fit customers‟ desires. Therefore, any company capable of creating and sustaining customer

communities related to its products, services and overall strategy can expect to drive higher revenues,

deeper customer loyalty and a real competitive advantage in today‟s economy (Manville, 2004).

As a final remark, managing value co-creation in customer communities remains as one of the key

research areas requiring that value managers, on both consumer and producer side, understand

the value co-creation strategies that drive, sustain and support experience environments, and thus

comprehend more what are the process and competencies that customers employ to render value

according to their necessities, so companies will be able to create the capabilities to support those value

co-creation processes in experience-centric networks (Möller et al, 2007).

Customer

Communities

Open

Market

Fig. 3 Customer Communities Creation

(5) Trust Building. Stability and success of experience-centric networks requires the right balance of

trust among organisations and customers (Msanjila & Afsarmanesh, 2007). Trust is the glue that holds

and links organisations and customers together, making possible the process of value co-creation. Trust is

the atmosphere and the medium in which customers and organisations are dialoguing. It is also the base

of cooperation among customers and organisations, and it is the main requirement in experience-centric

networks in order for them to exist (Mezgár, 2006). Thus, trust represents a bilateral process that requires

mutual commitment and endeavour of organisations and customers when attempting to keep their

promises (e.g. building credibility). Some strategies identified by Jarvenpaa et al (1998) suggests that

trust building in virtual environments could be facilitated with: (1) proactive style of actions, (2) work-

focused interactions, (3) optimistic team-spirit, (4) dynamic leadership, clear roles and objectives,

(5) frequent interactions, and (6) immediate feedback. Hence, trust in virtual environments relies on

virtual interaction and meeting to commitments (Latane et al, 1995).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

15

In the co-creation paradigm, trust building can be supported through Prahalad‟s & Ramaswamy‟s

(2004) DART building blocks: Dialogue, Access, Risk-assessment and Transparency. Therefore, in a

value co-creation it is clear that engaging customers directly in the co-creation of value involves risks for

both customer and producer, so keeping this in mind, dialogue will be the element that encourages not

just knowledge sharing, but even more importantly, shared understanding between companies‟ and

customers‟ concerns. Additionally, dialogue also gives consumers an opportunity to interject their view of

the outcomes of value into the process of value co-creation. Moreover, giving customers access to

knowledge, tools and expertise helps them to construct their own experience outcomes, and this also

challenges the notion that ownership is the only way for consumers to experience value by focusing on

access to experiences at multiple experience gateways (interaction points), as opposed to mere ownership

(Prahalad & Ramaswamy, 2004; Ramaswamy, 2006).

Furthermore, since risks are involved for both sides, risk assessment assumes that if consumers become

co-creators of value, they will demand more information about potential risks of goods and services,

but they will also have to bear more responsibility for dealing with those risks. Thus, transparency of

information in the interaction processes will be necessary for customers to participate effectively in a

co-creation mode, and to build trust between organisations and consumers. Concluding, DART building

blocks must be enabled by technical and social infrastructures (e-platforms and virtual communities) that

allow consumers to co-construct experiences they value, and represent business value for organisations

(Prahalad & Ramaswamy, 2004; Ramaswamy, 2006).

(6) Interaction Channels Building. Experience gateways construction represents the creation of

multiple customer interaction channels (e.g. Web-based and traditional ones: Web-chat, e-mail, phone,

fax, letter, Face-to-Face, etc.), including experience rooms (e.g. sand-boxes)4 aimed at providing

consumers with an end-to-end experience across all the systems, people and organisations in a value

network, and through all interaction points (channels) that customers use to create and shape their own

personal experiences with their product/service providers by having access to a co-creation toolkit

to construct their own experience outcomes by co-designing and co-developing their own products and

services. Moreover, it is important to recall at this point that „value co-creation‟ is contextual, and

therefore customers‟ interactions are the key essentials in the value co-creation process with their

product/service providers (Romero & Molina, 2009).

Furthermore, supporting multiple interaction channels, and at the same time avoid losing customers‟

value co-creation context when he/she moves from one interaction channel to another, will require a new

generation of customer contact centers (e.g. call-centers, help-desks) known as customer interaction hubs

capable of processing distributed and heterogeneous sources of information, regardless of the multiple

communication channels available to manage a customer unified and contextual profile to deliver unique

customer experiences of value (eGain, 2007).

Customer interaction hubs are emerging ICT-infrastructures able to support customer interactions

across multiple channels and provide a uniform response to customer demands at any point of

the value co-creation process; allowing organisations to choose the right approach and method for

responding to a customer requirement based-on a common view of his/her experience context. The

end-result will be the right response with the right information for the customer, achieving customer

satisfaction (eGain, 2007).

Some recommendations when building and managing customer interaction channels are: (1) Provide

multiple interaction channels to customers to allow them to choose which channel(s) is/are more

convenient for customer value creation process; (2) Design each experience gateway considering

DART building blocks; (3) Manage experience quality management across all interaction channels - “it is

about an integral experience”; (4) Ensure best practices to standardise the quality of customer service

across all interactions channels and co-creator agents; (5) Enable intelligent cross-communication to turn

the customer hub into a real experience environment; and (6) Consider multiple customers‟ choices from

a simple transaction process (e.g. a purchase) to the overall co-creation experience through the interactive

personalisation of products and services (Prahalad & Ramawasmamy, 2004; eGain, 2007).

4 Experience Room - An interactive environment where customers “play” with products and shape them.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

16

One question that could arise when building interaction channels for the customers is where should an

organisation create these experience gateways, and a possible response to this strategic question is

suggested by Ramaswamy & Gouillart (2007), who recommend the use of “interaction maps” aimed

at discovering key interaction points where companies can devise new or better interactions for improving

dialogue, access to knowledge, mutual understanding of risks and transparency in the value co-creation

process with their customers. These interaction maps can be represented in a formal way by using

UML 2.0 interactive diagrams such as a sequence diagram displaying the time sequence of the entities

participating in an interactive process, or even better, collaboration diagrams displaying an interaction

process organised around the entities and their links to one another. Using this kind of UML interaction

diagrams could allow organisations to capture the behaviour of a single co-creation case by visualising

the collaboration between entities in a value system to accomplish their value co-creation goal (Romero &

Molina, 2009).

Another formal approach to map firm-customer interactions could be through a Business Process

Modelling (BPM) approach as a way of providing organisations with the capability to understand their

interactive/collaborative business procedures in a graphical notation and comprehend better the

organisational collaborative performance in each co-creation process with the customers and business

partners (Romero & Molina, 2009).

Another possibility could be the use of simple cross-functional diagrams that can also serve to

the process of mapping firm-customer interactions (Romero & Molina, 2009).

In summary, experience environments will require the integration of multiple experience gateways as

enablers of customer interaction with the node organisation and its network to co-create unique and

personalised experiences of value (Prahalad & Ramawasmamy, 2004).

(7) Capabilities Provisioning. An experience-centric network can be understood as a solution

generator capable of associating organisations core-competencies and resources into collaborative

networks on one side, and on the other side collect enough consumers‟ knowledge from customer

communities to understand how to satisfy personal consumers‟ requirements. Therefore, collaborative

networked organisations and customer communities‟ creation represent one of the most suitable ways for

providing a group of organisations and consumers with the right capabilities and training to efficiently

co-create value within experience environments (Romero & Molina, 2009).

Collaborative networks allow the integration or organisations in networked structures (e.g. Virtual

Organisations) that represent tailored on-demand value creation systems with the capabilities to adapt and

rapidly reconfigure resources and accommodate them to satisfy consumers‟ demands within experience

environments, which can deliver personalised products and services that complain with customers‟

specific needs. Property designed value creation systems will allow collaborative networked organisations

to perform value co-creation processes for satisfying consumers‟ specific requirements in a fast and

efficient way thanks to the advantages and benefits of collaboration (Romero & Molina, 2009).

On the other hand, customer communities can provide organisations with the information to recognise

with enough time which will be the new required capabilities to satisfy consumers‟ needs and aspirations

in the near future, so networked organisations (e.g. a VO Breeding Environment) can recruit new business

allies that can contribute to the emergence of new competencies to support proactive interaction between

consumers and producers in the conjoined personalisation of products and services (Romero & Molina,

2009).

By integrating collaborative networks and customer communities into experience-centric networks,

both entities will be able to actively select the competencies required for co-creating personalised

experiences in experience environments. This, with the technical and social infrastructures to align

different business and consumer value co-creation processes with the agility and flexibility required

to capture the time frame of business co-creation opportunities (e.g. collaboration // business //

opportunity) (Romero & Molina, 2009).

Lastly, sustainable competitive advantages and business success in the emerging experience economy

will depend on organisational networks capability to speed-up, innovate and focus on core competencies

of their business allies to meet consumers‟ specific requirements and demands, capture new markets and

beat the competition by creating unique experiences with profitable business grow. Furthermore,

value will no longer be developed inside organisations, but from the interaction with consumers in

experience gateways allowing the co-design and delivering of personalised product and service offerings.

Thus, innovation and commercialisation of technologies, products and services will not be an

organisational process, rather a value co-creation process with customers and business allies in the rising

experience economy (Prahalad & Ramaswamy, 2000; 2003; 2004).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

17

Experience

Environments

Value Co-Creation Value Co-Creation Value Co-Creation

Fig. 4 Experience Environments

(8) Rewarding Mechanisms. Co-creation may tap into the intellectual capital of customers; therefore

companies should acknowledge their consumers and incentive them for their contributions, especially for

those ideas that represent a real economic benefit for the organisation. Companies should also keep in

mind that rewarding consumers (e.g. free trials, samples of products, prizes for the best customer

innovations) is one of the best mechanisms to keep alive proactive behaviour during co-creation

processes (Von Krogh, 2006; Trendwatching, 2006).

Considering the above, if companies want to keep the ideas flowing from their customers and their

communities, they should show pre-emptive generosity, taking into consideration consumers contributions

that are more significant for value co-creation, and reward customers by exchanging intellectual property

with them when they engage in a value co-creation processes (e.g. co-development, co-design, etc.) or

simply share royalties in exchange for their ideas (Von Krogh, 2006; Trendwatching, 2006).

Ultimately, a value co-creation process moves along to a joint product/service development, where

individual contributions to value co-creation become more difficult to determine, and for this reason,

ownership of intellectual property (e.g. intellectual capital) becomes quite troublesome. Therefore, new

research in intellectual property management is required; especially in the field of customer involvement

in value co-creation processes (Romero & Molina, 2009).

The result of following the set of guidelines described in the reference framework presented in

this paper represents the first steps towards formalising a methodology for the creation of experience-

centric networks (see Fig. 5) (Romero & Molina, 2009).

Value Co-Creation Value Co-Creation Value Co-Creation Value Co-Creation Value Co-Creation Value Co-CreationExperience

Environments

VOs

Open

Industry

VOs

Collaborative

Networked

Organisations

VBE

VBE

Value System Redesign

On-demandValue System

RedesignOn-demand

Customer

CommunitiesOpen

Market

Co-Creation

driven VOs

Co-Creation

driven VOs

Fig. 5 Experience-Centric Networks Scenario (Adapted from Romero & Molina, 2009).

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

18

As a complement to the framework proposed in this paper, the following section will present a brief

perspective on how value co-creation can drive the appearance of new evolutionary and collaborative

business models for the emerging reality of value co-creation systems based-on customers-company‟s

interactions.

6. Designing Collaborative Business Models for Value Co-creation

In a World of e-consumers, information systems and tremendous e-commerce opportunities a wide-range

of business co-creation strategies are emerging (e.g. user-centric, on-demand based, context

aware). Moreover, the increasing market dynamics, in addition to the rapid evolution of information and

communication technologies, are allowing the integration of different technological capabilities to offer

“dialogue, transparency, access and risk-benefits driven by ubiquitous connectivity” as a novel

customer-centric approach supported by virtual environments that facilitate the co-construction of

fresh and valuable customer‟s experiences, and create genuine competitive advantages for

organisations. Therefore, in this momentum of emerging business co-creation strategies and e-platforms,

new business models are required to conceptualise and design successful collaborative and trustable

experience environments that best suit with the new dynamics of producer/customer relationship in

the co-creation and distribution of value (Prahalad & Ramaswamy, 2004; Galli et al, 2005).

In this context, business models should be understood as “conceptual tools containing a set of objects,

concepts and their relationships to express the business logic of a firm” (Osterwalder, 2004), or a

collaborative network. A business model can help to describe the value proposition that a collaborative

network wants to co-create with its customers, and also the infrastructure/technological architecture

needed to co-create, market, and deliver this value proposition, within a set of organisational

arrangements concerning the governance model of cooperation to deliver such value proposition (Romero

et al, 2007b), and making clear which are the costs, investments, and risks required to generate profitable

and sustainable revenue streams (Osterwalder, 2004; Romero et al, 2006).

Furthermore, business models ontology can be used to capture, analyse, understand, and communicate

the business logic behind value co-creation in the context of collaborative networks and customer

communities. Using Osterwalder‟s (2004) business model ontological approach, adapted by Romero et al

(2006), the following paragraphs will describe a skeleton for the design of new business models for value

co-creation systems. By capturing the essential elements and their relationships that should be identified

and described to create sustainable value systems that provide wealth to all parties involved and the same

time underline the rationality of the value co-creation opportunities. Two important characteristics

identified by Romero et al (2006) in collaborative business models are: 1) a multi-value system

perspective, including the identification of different types of value: economical, social and knowledge;

and 2) a multi-stakeholder approach, identifying each stakeholder‟s participation in the value creation

process. Both characteristics were used to adapt the four pillars and nine building blocks of Osterwalder‟s

ontology in the sense of collaborative business environments. A graphical representation of collaborative

business model components is shown in Fig. 6.

(1) Product Pillar. This pillar engages the multi-value proposition building block definition, which

focuses on the identification of new business opportunities for creating “experience environments” that

could generate both customer‟s and stakeholders‟ value using Prahalad‟s & Ramaswamy‟s (2004)

building blocks for value co-creation: “dialogue, access, risk management and transparency”, which can

be referred by the acronym DART. In a co-creation process, value propositions should emerge from

the space of interaction (the experience environment) where individual consumers interact with customer

communities, as well as with the extended networks of companies to co-create their own experiences of

value, making the business ecosystem sustainable because of its creation of wealth for all parties involved.

(2) Multi-Stakeholder Interface Product. In this pillar, the definition of three building blocks is

addressed. First, the target stakeholders’ building block which refers to the recognition of potential

motivated customers that better fit as candidates for participating in value co-creation strategies. As well

as the value offered to different stakeholders as remuneration for enabling organisational capabilities

to rapidly develop and change products and services depending on customer requirements and satisfaction

levels. Second, distribution channel building block which illustrates the range of experience gateways

(points-of-interaction) as the different choices that a consumer has to interact with the firm to shape its

co-creation experience. In this building block technology plays a key role as the enabler for building

experience co-creation platforms that enhance on a quick, easy, convenient, and safely way consumers‟

value co-creation experiences (Ramaswamy, 2006). Lastly, stakeholders’ relationship building block

depicts the kind of interactions and transactions that customers and organisations establish to co-construct

profitable and personalised value co-creation experiences.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

19

(3) Infrastructure Management Pillar. In this pillar, the definition of three building blocks is also

attended. First, multi-value configuration building block addresses the arrangement of activities,

resources and knowledge which are necessary to co-create value for all stakeholders, especially for the

customers. One way to assess the multi-value configuration of an experience environment is through

the identification of the value balance for each stakeholder (value offered vs. value received). Second,

capabilities building block refers to the set of resources and skills required in organisations to create and

sustain experience environments that could attend to the dimensions of choice in consumer-company

interaction to provide experience-centric options that reflect customers‟ desires. Finally, partnership

building block describes the agreements concerning the cooperation between organisations and customers

to collaborate in order to co-create value for all parties involved in the value creation process:

a. partnerships among organisations in the form of collaborative networks to share skills or

core-competencies and resources in order to better respond to collaborative business opportunities;

b. partnerships among customers to share their experiences with products and services to become more

“informed, networked, empowered and active consumers” (Prahalad & Ramaswamy, 2004); and

c. partnership among collaborative networks and customer communities to co-create value.

(4) Financial Aspects Pillar. This pillar includes the definition of two building blocks, the cost

structure building block as the representation in money of all the means used for creating and sustaining

the experience environments: ICT, staff, billing, marketing, administrative and operational costs; and the

revenue model building block describing how the experience environments make money and achieve their

sustainability through a variety of revenue flows, proving in this way the success of the collaborative

business model.

Product

Multi-

Stakeholder

Interface

Infrastructure

Management

Financial

Aspects

Multi-

Value

Proposition

Target

Stakeholders

Multi-Value

Configuration

Distribution

Channel

Stakeholders

Relationship

Cost

Structure

Revenue

Model

Capabilities Partnership

Fig. 6 Guidelines for CNO Business Model Definition (Osterwalder, 2004; adapted by Romero et al, 2006)

To close this section what is important to keep in mind is that in collaborative endeavours, and

therefore co-creation environments, value propositions are common ground between collaborative

networked organisations and customer communities. Collaborative networks should combine the

capabilities of their members to create new abilities to better support the personalisation of experiences

and with customer knowledge synergies co-create real personal value propositions where the consumer is

starting to play an increasingly important role in the co-construction of value offers.

7. Conclusions

The current trend of customer involvement will continue maturing in the following years, changing

customer‟s role from a pure consumer of products and services to a partner in the value creation process,

and as a result organisational structures and business models will migrate into new strategic alliances and

collaborative models based-on open business models that will support the creation and operation of

adequate collaboration e-platforms for value co-creation. A lot of research remains to be done towards

closing the interaction gaps that represent big obstacles for an effective involvement of customers in

communities and organisations in collaborative networks to create the synergy necessary to integrate both

sides in experience-centric networks capable of satisfying customers‟ needs, wants, and aspirations, and

at the same time organisations revenue goals.

Mass-customisation, personalisation, customer integration and open-innovation trends will continue as

early-strategies of value co-creation between organisations and customers, but as mentioned by Prahalad

and Ramaswamy (2004): “The future will belong to those companies that continuously generate new

knowledge from customers‟ experiences, and identify and enable new co-creation opportunities to support

compelling experience environments”.

Romero, D. and Molina, A. (2011). Collaborative Networked Organisations and Customer Communities: Value Co-Creation and Co-Innovation in

the Networking Era, in Journal of Production Planning & Control, Volume 22, Issue 4, Special Issue on “Co-Innovation and Collaborative Networks".

Taylor & Francis, ISSN: 0953-7287 (Print) 1366-5871 (Online), Impact Factor 0.561 (2008) DOI: 10.1080/09537287.2010.536619

20

In this sense, this paper may be concluded by mentioning that the effectiveness of co-creation will

depend on how much value can be jointly created for customers and organisations in experience

environments, and also on how much the ability of single or networked organisation is developed

to select, invest and exploit co-creation opportunities with the highest potential to improve customers

satisfaction, business revenue streams and perhaps create a new source of competitive advantage in

today‟s emerging experience economy.

8. Acknowledgement

The research presented in this document is a contribution for the ECOLEAD Project, funded by

the European Community, FP6 IP 506958, for the “Rapid Product Realisation for Developing Markets

Using Emerging Technologies” Research Chair, ITESM, Campus Monterrey, and for the “New Business

Models for the Knowledge Economy” Research Chair, ITESM, Campus Ciudad de México. This paper is

an extended version of the original article published in the 10th IFIP Working Conference on Virtual

Enterprises (PRO-VE‟10) (Romero & Molina, 2009).

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