Value Creation and Co-creation

Abdullah A Afifi

Abdullah A Afifi

IDRiS Darulfunun Institute - Business & Public Policy Analyst | GSB UKM - Social Business Enterprise Researcher

Value creation is the main concept of business activities. Creating values is involving stage by stage process from exploration, communication, and delivery of the values to the customer. Values in the marketing point of view are identified from customer perception based on their needs and wants. This is inline as the main object is people, the value creation process is depending on how we translate people’s voices and embed it on products and services.

While value co-creation is significantly different from value creation, this stage process involving interaction between the business and its customers. The co-creation activities are conceptually different from just value creation. Co-creation process embedding customer thought and experience on products or services.

There are two general core steps of value co-creation process which are: contribution and selection process. While the type of way customer co-creation involved in the creation process can be described with the type of interaction. This type of interaction can be explored into four degrees of interaction control, which are:

  • Tinkering: customer giving a contribution, while business does the selection
  • Submitting: business control contribution and selection process
  • Co-designing: business control contribution, while customer do the selection
  • Collaboration: customer involve in contribution and selection activities

With this value co-creation approach, the business can grow with the new ideas that resulted from the experience of the business and customers. This situation will be benefited to both parties. By sharing their value creation process, businesses can be more confident of value acceptance by customers, while customers also can embed their experience on values created. It is a mutual solution for a specific product that requires customer insight on it.

Today, many innovations, ideas, concept or products are using value co-creation approaches. The online platforms and IoT (Internet of Things) benefitted from collaboration value co-creation simply known as open-source. Programming code like Java, PHP, HTML5, Linux, Python, R, etc really benefited from it. Some the application like Firefox, Apache is using the open-source co-creation to grow and they succeed to push their innovations into these limits.

With this open-source code, we can see an innovative platform has rapid growth. Some of the app platforms like Android, Uber, Grab, Gojek, Foodpanda, Matdespatch, Easyparcel, Wikipedia, WordPress really benefited from this approach. We can observe there is also a big contribution of a big player like Google using tinkering and submitting value co-creation type of process to deliver its product as an open-source platform, and these approaches are proven effective since they can overlap Yahoo and Microsoft.

Innovations that used value co-creation process not just happen online and on the internet, but also can be used on producing ideas for physical product and services, such as the ideas of new branch opening that using the feedback of customer and potential customer. The current regional development plan and repair can be utilized using feedback from citizens to capture problem identification, like damaged roads or facilities.

The implication value co-creation on positioning strategy is so significant since business already captures some of the values perceived by the customer. The business also release some responsibility to the customer, customer can feel benefits early and this condition is reducing the cost of the evaluation, by this business also can grow along with the evolving needs and wants of the customer.