Value Co-Creation in Industrial Buyer-Seller Partnerships ... - Doria

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7.1 Perceived value as a prerequisite for high-involvementThe positive assessment of benefits and sacrifices of involvement leads to perceived valueof the involvement in a relationship; the positive trade-off between benefits and sacrifices isargued to be a prerequisite for pursuing a relationship and consequently also a prerequisitefor value co-creation potential.In the following I present and discuss the benefits and sacrifices found in theinterviews with people from the Seller and the Buyer. The reason why I emphasize thedifference between perceived value of the relationship and value co-creation in therelationship is that I found that they are different. Perceived value of a relationship is an exante assessment made before the actual potential has been realized. The perception of thetrade-off is largely intuitive, not fact-based, surely more like a general assessment of thisbeing the right thing to do. This has to do with the fact that the outcome of involvement ishard to predict in advance since the value is created in the process of pursuing therelationship. The assessment of perceived value is dependent on who is making theassessment. The value of the partnership in this case is perceived differently by peopleinvolved for instance in procurement, who are concerned about pricing, delivery, anddiscounts, and people in top management who are concerned about total operationalefficiency, safety, and reliability.Value co-creation in the relationship is the actual day-to-day activities that are carriedout within the frames of the relationship. This is the process by which resources arecombined through exchange through interaction and mutual activity, processes that aim forincreased efficiency or more effective use of resources.7.1.1 Value perceived by the BuyerThe 15 interviews with people from the Buyer organization revealed a number of issues thatwere perceived as benefits and sacrifices associated with the partnership with the Seller. Thebenefits and sacrifices summarized in the figure below are discussed in the followingsections.139
5¡j¢‘£¤ ¥¤ ¢‰¦s§s¨›©wªe«j¦5£©5¦5Ês¦>¥¤ Ë§sḧ©hª>«j¦5£5¡j¢‘£¤ ¥¤ ¢‰¦s§s¨›©wªe«j¦5£¬ Ì–®±e¿ ¯´>È‘¿±ºÁ¤¿±Ÿ±¼¹zÍ8²‘®·‹´Ÿ°¹8¯Ç‘±Î´>»Ÿµ¬°·>»‰µs¯¹8¯·>»³ÈŸ´ŸÀ±ŸµÏ¸ºé¯ »¼¹&±>»‰ś»‰°±€Ð¬ Ÿ®¯°±³²‰é¯ µ¬ Ÿ®¯°±³²‰é¯ µ¬ 5·>ç¸‹¯¹8¸º±e»¼¹h¹¤·º¹8½Ÿ±c¾s±>¿ ¿±e®h·>»ºÀ¼²‰±Ÿ°¼¯Á¤¯±€µ¬¯¹¤±e¸ºÀ¬ Ñ5¯À¨Ä‡À¨½€é®¯ »ŸÃ ¬¬ ÒÓ²‰±>»‘»Ÿ±ŸÀÀ‡¯ »º°·>ç¸‹Æ>»e¯°0´‰¹8¯·>»¬¬ Âs±Ÿ°¼½‘»Ÿ·>¿·€Ãs¯°é¿‰µ‘±e²‰±e»€µ‘±e»Ÿ°0±¬ Âs±Ÿ°¼½‘»Ÿ·>¿·€Ãs¯°é¿‰µ‘±e²‰±e»€µ‘±e»Ÿ°0±¬ Â5½‰±\®¯À¨Ä‡·‰ÁÅ¸‹¯ÀÀ¨¯ »€Ãc·eÆ‰¹Å·>»ºÀ·>¸º±¼¹8½e¯ »ŸÃ¬²‘®·‰Ç>¯µ‘±€µ\È¼Éc·‰¹8½Ÿ±e®À¬ÔÌp°0°±ŸÀÀÕ¹¤·Î¹¤±Ÿ°¼½‘»e¯ °0é¿e¯ »¨Á$·>®¸º´¼¹8¯·>»¬ Ö»Ÿ°¨®±Ÿ´€À0±€µ‹°·€À¹w±‰ÁRÁ¤¯°¼¯ ±e»Ÿ°ÉÏ¯ »Î·>²‰±e®´‰¹¯·s»‰À¬²‘®·‰Ç>¯µ‘±€µ\È¼Éc·‰¹8½Ÿ±e®À¯ ¬×±¼ÁRÁ¤¯°0±>»‰°É\¯ »ÎÀ¼²‰é®±³²Ÿé®¹¤Àg½Ÿ´>»‰µs¿ ¯ »ŸÃ¬×À¨¸º·€·‰¹8½³®$·eÆ‰¹8¯ »Ÿ±ŸÀ¬Ø¿·€Ãs¯À¹8¯°0À¬×´Ÿµsç¯ »‘¯ À¹®´‰¹8¯·>»¬ÙÁ&ÆŸ±>¿¼±€°0·>»Ÿ·>ç¯±ŸÀ¬ÛÚ¤¹¤é¯ ¿·>®¸º´Ÿµ‘±€ÚnÀ±e®Çs¯°6±¬ Ü·>¯ »¼¹ÓÈ€Æ€À¨¯ »Ÿ±ŸÀ0ÀÝµ‘±¼Ç‘±e¿·>²‘¸º±e»¼¹¬Figure 7.2: Benefits and sacrifices perceived by the Buyer in 2003-04From the above boxes, where the benefits and sacrifices of the relationship are presented, itbecomes obvious that it is not possible to measure exactly the value of each of the aspects orthe trade-off between them. Therefore I argue that the trade-off assessment is highly relativeand intuitive, based upon management perception of the value of involvement in a particularrelationship at a give time in a specific situation.As has been pointed out earlier, the perception of benefits and sacrifices is also actordependent - it differs according to whom one asks. When discussing perceived value withthe people involved in procurement they measure the success of the partnership in terms ofhow well the company has been able to benefit from discounts on spare parts, while thetechnical people are concerned about the co-development of more fuel-efficienttechnologies. The point is that there obviously are shortcomings to any effort to try torepresent or reconstruct a real-life phenomenon. However, as mentioned earlier this is oneconstruction of the reality, as I as a researcher have perceived it. Thus, my attempt is tomake a collected representation of the benefits and sacrifices involved in the partnershipbased on the interviews. I start by discussing the benefits and thereafter move on to discussthe sacrifices.A reliable fleetThe Buyer’ s main concern as a cruise ship operator is safety and reliability in operations.Part of having a reliable fleet is having partners who bring their resources and specializedexpertise to the table. The Buyer believes that by cooperating with the Seller increasedreliability can be achieved. A practical example of what has been developed together inorder to increase reliability is the MMS concept.140
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Birgitta ForsströmValue Co-Creatio
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VALUE CO-CREATION IN INDUSTRIAL BUY
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CIP Cataloguing in PublicationForss
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Suokannas and Annica Isacsson my de
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3.3 The use of the value concept in
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7.2.1 Price as a benefit and a sacr
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Figure 8.1: Interdependence, involv
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81. INTRODUCTIONEconomic theory rel
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Portfolio management and key accoun
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value - ways to understand and thin
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creation in a world of relationship
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Möller and Halinen-Kaila (1999) cr
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Value of a Relationship: When discu
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1.3 Outline of the studyThe study s
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in such relationships, and on how t
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2.2 Research approach“ Human gras
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“ In case study both the research
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interview ended up being different
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simplifying and combining observati
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the purpose of why it is studied an
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started paying attention to issues
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The analysis of the material was an
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are: setting the boundaries of the
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Critical events during the process
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interviewing, observing, reading, r
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unit. Going even further back in hi
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3.4.1 Overview of the use of the va
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ç-è1éWèê9ë ì9í!î¹ï5ðWí
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argumentation alters the traditiona
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zG{\| }C~t s oHpaqfrRs t s qXu2vs y
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industries. Innovation is the sourc
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ôô3.7 SummaryThe assessment of va
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4. A RELATIONAL APPROACH TO VALUE C
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est way to organize, any way of org
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4.2 The IMP view on relationships a
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The focus and unit of analysis of t
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ecent book discuss how creating val
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not simply mutual dependence betwee
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3n3465-7 89;:=©:¡?@95AB
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interdependence is associated with
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“ The performance of supplier arr
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Figure 4.5: Different value creatin
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“ organizational arrangements tha
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There is no simple or universal def
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The question of win-win in partners
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The following chapter, number five,
Page 96 and 97: The world cruise industry is domina
Page 98 and 99: Figure 5.2: The actors and the setu
Page 100 and 101: ù õ ñ ù õ ó*ÿ¡ ÷£¢ ñ¤
Page 102 and 103: :: ]:: ]In normal cases the Seller
Page 104 and 105: the top 10 suppliers for the cruise
Page 106 and 107: 6. THE DEVELOPMENT OF THE RELATIONS
Page 108 and 109: In 1997 when Mr BR9 got the positio
Page 110 and 111: The relationship between the compan
Page 112 and 113: ” He (BR9) often talks about the
Page 114 and 115: With some years of experience with
Page 116 and 117: offering, the Buyer still sees the
Page 118 and 119: When the Seller realized that they
Page 120 and 121: we have a new development in the pr
Page 122 and 123: to serving the customers - the part
Page 124 and 125: ” This is the most problematic ag
Page 126 and 127: • Optimize operations i.e. fuel o
Page 128 and 129: They also commented that the person
Page 130 and 131: 6.7.5 Comments on internal issuesAt
Page 132 and 133: changes, and that the Seller would
Page 134 and 135: survey 14 that the Seller had condu
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Page 138 and 139: Seller. At present there are three
Page 140 and 141: 15 - a factor that should not be ne
Page 142 and 143: elationship and the people interact
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Page 148 and 149: ” We are in the process of develo
Page 150 and 151: and that is insane. We must be able
Page 152 and 153: è èèèè èèèè èè èè èè
Page 154 and 155: We learn their way of handling thin
Page 156 and 157: Price receivedThe price received ca
Page 158 and 159: partnership with the Seller, the as
Page 160 and 161: In the light of this, one could say
Page 162 and 163: dependence. If managers were not ab
Page 164 and 165: ¥(¦§¨&©G§ªG¦(£(«¬¨$Z
Page 166 and 167: Seller’ s products and concepts,
Page 168 and 169: forth between the companies. This h
Page 170 and 171: What I found even more interesting
Page 172 and 173: The Buyer sees that the interest fo
Page 174 and 175: decision to pursue a collaborative
Page 176 and 177: methodology. I will also direct som
Page 178 and 179: years to come. Consequently the par
Page 180 and 181: €‚ƒ‡ ˆ„~„| }~different
Page 182 and 183: Question 1: How is the value concep
Page 184 and 185: exists, the value co-creation poten
Page 186 and 187: partnering and cooperating are so o
Page 188 and 189: process of analyzing the material s
Page 190 and 191: Barney, JB. (1991). Firms resources
Page 192 and 193: Forsström, B., (1998). Trouble & S
Page 194 and 195: Katz, M & Shapiro, C (1985). Networ
Page 196 and 197:
Shapiro, B.P., Rangan V.K., Moriart
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Interviews:Interview: Buyer 1Interv
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Relationships between buyers and se
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Value Co-Creation in Industrial Buyer-Seller Partnerships ... - Doria

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