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

value-creation initiatives such as investing in relation-specific assets, sharing knowledge,and combining complementary strategic resources (Dyer and Singh, 1998).Normann and Ramirez (1993a, 1994) have termed the link between the customer and thesupplier as “ offerings” . The offering is of value if it provides “ relieving value” or “ enablingvalue” . By relieving value is understood the labor saving value that the offering provides,while enabling value is everything that helps the other party to work more efficiently,effectively, easily, safely, and elegantly. Offerings consist of five elements: goods, services,risk sharing and risk taking, access to or use of systems or infrastructure, and information.Dwyer et al. (1987) building on the ideas of Levitt (1983) argue that buyer-sellerrelationships involve analogous benefits and costs to the ones that can be identified in amarriage between a husband and wife. The benefits are reduced uncertainty and manageddependence (Spekman et al. 1985), exchange efficiency, social satisfactions, and gains as aresult of effective communication and collaboration.In summary it can be said that conceptualizations of value seem to be divided into twobroad categories. On one hand there is what could be called substantial value 4 dealing withreduced costs, increased revenues, enhanced transaction efficiency, improved coordination,profit, volume, and economies of scale and scope. On the other hand there is a morecognitive type of value dealing with creating new markets, new products and services, withdiscovery and innovation, learning and sharing of knowledge, risk sharing, competence,market position and social rewards.In a sense these two different broad categories seem to be dealing with efficiency onone hand and with exploitation of each other’ s resources on the other, to use the Håkanssonand Prenkert (2004) conceptualization of value creation 5 . Building on the concept ofexchange (Alderson 1957) in marketing Håkansson and Prekert present a framework forviewing value creation in business exchange by distinguishing between two separate valuecreatingprocesses within the activity of business exchange.The two processes, labeled exchange value and use value, are closely related but applydifferent logics and different contexts. Exchange value deals with the efficiency of theexchange between the parties, while use value deals with how effectively the parties useeach other’ s resources. Efficiency is dyadic, based on exchange value, while effectiveness isseen as “ contextual and network based on use value” . They conclude that: “ use value cannotbe achieved without exchange value” (Ibid. p 93). Möller and Törrönen (2003) are also504 The notion of substantial and cognitive value has been brought forth orally by Mr Stefanos Mouzas at the ISBMConference at Harvard Business School in August 2004. No written reference.5 Value creation is defined as: “ The process by which the capabilities of the partners are combined so that thecompetitive advantage of either the hybrid or one or more of the partners is improved.” (Borys & Jemison 1989,p. 241).