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

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unit. Going even further back in history, value got its measurable connotation in the 13thcentury when it was used to mean what something was worth when traded or exchanged forsomething. In the mid 16th century value was directly associated with a measurable unitwhich by the 17th century came to be known as the price for something. In the 18th centurythe idea of value as something subjective was introduced and in the 19th century the notionof value being something based on personal judgment was accepted (Ramirez 1999, p. 50).The “ value” concept is widely used in marketing literature. Most often it is understoodto imply economic gain as through Porter’ s classical definition: “ The amount buyers arewilling to pay for what a firm provides them” (Porter 1985). However, there are competinginterpretations to this narrow view, which date back to the industrial era. Monetary benefitis obviously the “ raison d´être” for actors in business, but when exploring the value conceptin the context of industrial buyer-seller relations there is more to it than the direct monetaryaspects. In 1985 when Porter stated his definition the dominant buyer-seller paradigm wasdifferent to that of today. There were buying centers with the task of buying as efficiently aspossible. The relationship with the supplier was adversarial. Today companies act innetworks of relationships where the interaction between buyer and seller is increasinglycharacterized by partnership and cooperation (Kothandaraman & Wilson 2001, p. 380).3.3 The use of the value concept in business studiesIn business studies several different schools of thought have used the value construct. Porteruses the value chain framework, where the economic implications of different activities arestudied at the firm level (Porter 1985). Schumpeter discussed value creation throughtechnological change and innovation. This view sees value as being created through theintroduction of new goods or production methods, creation of new markets, discovering ofnew supply sources, and reorganization (Schumpeter 1934). The Resource Based View ofthe Firm (RBV) looks at the resources possessed by the firm and argues that a firm’ sresources only are valuable if they can reduce costs or increase revenues compared to thesituation where the firm would not possess these resources (Barney 1997). In studies onStrategic Networks the value aspect has been considered in several different ways.Granovetter (1973), Freeman (1979), and Gulati, Nohria and Zaher (2000) have focused onthe implications of a network structure for value creation. They have used terms such asnetwork density and centrality. Lorenzoni and Lipparini (1999) have looked at governancemechanisms for value creation. Gulati (1999, 2000) has studied the importance of resourcesand capabilities for value creation. He has also looked at value creation through access tovaluable information, markets and technologies, and enhanced transaction efficiency and47
improved coordination between firms. Katz and Shapiro (1985) and Shapiro and Varian(1999) argue that networks offer value in the form of shared risk and economies of scale andscope. Dyer and Singh (1998), Dyer and Noboeka (2000), and Anand and Kanna (2000)have studied aspects related to networks and the possibility for knowledge sharing andlearning (Amit and Zott 2001). Möller and Svahn (2003) discuss intentionally createdstrategic business networks and suggest a value-system view for describing the differencesbetween various nets.3.4 The use of value in industrial marketing literatureValue in the context of buyer-seller relationships can be studied from a number of differentperspectives. One possibility is to study the value of a single supplier offering to a customer.Alternatively one can choose to study the total value of a relationship for the buyer or theseller. Another possibility is to focus on the value of a customer for the supplier or viceversa. Yet another possibility is to focus on the value created in in a dyad or a widernetwork of relationships.It is important to distinguish between value (i.e. perceived value) and value creation.Perceived value is a subjective assessment of the trade-off between benefits and sacrifices ata given point in time in a specific context. Value creation, on the other hand, is the processthrough which the buyer and seller make use of each other’ s resources with the aim ofcreating value.In the process of trying to sort out a concept or phenomenon it is useful to establishdifferent levels of analysis. Different analysis levels provide different views andperspectives on the studied phenomenon. Möller and Halinen (1999) propose four differentlevels of managing business relationships and networks, namely industries, nets,relationship portfolios, and single exchange relationships. The categorization providesdifferent levels and views on studying value within industrial marketing. Value needs itsown definition on the different levels in order to make it “ tangible” in the specific context ofstudy. Building upon this categorization Möller and Törrönen (2003) suggest acategorization of value creation into four levels. The suggested categories are transactionvalue, generative value, value creation at the portfolio level and value creation at a networklevel.The research object in this study is one buyer-seller dyad, one exchange relationship.This limitation sets the level of analysis and consequently impacts upon the formulation ofvalue, for the specific purpose of the study.48
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Birgitta ForsströmValue Co-Creatio
Page 3 and 4: VALUE CO-CREATION IN INDUSTRIAL BUY
Page 5 and 6: CIP Cataloguing in PublicationForss
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Page 9 and 10: 3.3 The use of the value concept in
Page 11 and 12: 7.2.1 Price as a benefit and a sacr
Page 13 and 14: Figure 8.1: Interdependence, involv
Page 15 and 16: 81. INTRODUCTIONEconomic theory rel
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Page 21 and 22: creation in a world of relationship
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the top 10 suppliers for the cruise
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6. THE DEVELOPMENT OF THE RELATIONS
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In 1997 when Mr BR9 got the positio
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The relationship between the compan
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” He (BR9) often talks about the
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With some years of experience with
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offering, the Buyer still sees the
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When the Seller realized that they
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we have a new development in the pr
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to serving the customers - the part
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” This is the most problematic ag
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• Optimize operations i.e. fuel o
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They also commented that the person
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6.7.5 Comments on internal issuesAt
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changes, and that the Seller would
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survey 14 that the Seller had condu
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Seller. At present there are three
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15 - a factor that should not be ne
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elationship and the people interact
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7.1 Perceived value as a prerequisi
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and that is insane. We must be able
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We learn their way of handling thin
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Price receivedThe price received ca
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partnership with the Seller, the as
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In the light of this, one could say
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dependence. If managers were not ab
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Seller’ s products and concepts,
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forth between the companies. This h
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What I found even more interesting
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The Buyer sees that the interest fo
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decision to pursue a collaborative
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methodology. I will also direct som
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years to come. Consequently the par
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€‚ƒ‡ ˆ„~„| }~different
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Question 1: How is the value concep
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exists, the value co-creation poten
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partnering and cooperating are so o
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process of analyzing the material s
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Barney, JB. (1991). Firms resources
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Forsström, B., (1998). Trouble & S
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Katz, M & Shapiro, C (1985). Networ
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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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