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

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The question of win-win in partnershipsVesalainen (2004) has studied partnerships and developed a partnership monitor frameworkfor analyzing partnerships between companies. The monitor positions them on a scalebetween pure market transaction (zero sum game) and maximal partnership (win-win). Heargues that a partnership is not a “ yes” or “ no” type of question, but rather a question of “ towhat extent” . One of the most difficult issues to handle regarding partnerships is thequestion of win-win where both parties gain, in contrast to the notion of a zero-sum game,where one of the parties wins at the cost of the other. The prerequisite for a win-winsituation is that the cooperation generates something to share between the parties. In a truepartnership the parties agree on the value created, and they are both aware of the processinvolved, plus the value is shared in a fair manner between the parties.Further Vesalainen concludes that what is complex about assessing value is that valuedoes not only relate to costs, but to volume, reference value, learning, innovations etc. ashas been recognized in previous studies and discussed earlier in the section on value. Healso discusses the impact of time in the development of a partnership - how long can oneparty invest in the partnership and wait for the payback? There is no flawless system forcalculating the benefits, which leads to a situation where one deals with issues related toevaluation. If the basis for evaluating the benefits differs between the parties, there is anobvious risk for conflict. Therefore it is vital to communicate and discuss the perceptions ofbenefits and the sharing of it, between the parties, in order to create and sustain apartnership. The more articulated and structured the handling of issues related to benefitsand the sharing of the value, the better the chances for a fruitful partnership (Ibid.).4.6.3 The costs of a high-involvement relationship“ High-involvement relationships are costly because coordination, adaptations andinteraction entail costs” (Gadde & Snehota 2000, p 310). The logic for a high-involvementrelationship is a) to benefit from cost benefits i.e. reduced costs in production and materialflows, improved flexibility and service levels or b) to benefit from revenue benefits, bytaking advantage of supplier skills and capability to improve quality of product. “ Increasedinvolvement makes sense only when the consequently increased relationship costs are morethan offset by relationship benefits” (Ibid p 310). A partnership is said to be an appropriaterelationships strategy when the business volume between the parties is considerable, whenthe relationship is long-term and stable, and when the supplier is the single source for thespecific resource (Ibid.).85
The senior vice president for marine operations at the Seller the issue of dependence is oneof the key issues when discussing high-involvement relationships with customers. There isalways a risk in getting heavily involved with one partner. How can you be sure that you donot miss out on something else that is happening in the market? How do you preserve thebalance of not seeming to be favoring a certain customer in the eyes of other customers?There is a certain risk involved in specializing because specializing means that the resourcebecomes less valuable to alternative uses, which is why dependence can be viewed as a riskfrom a single company’ s perspective (Dyer and Singh, 1998). The assessments of thebenefits and sacrifices that are involved in a cooperative relationship with one partner haveto be made for each specific case.4.7 SummaryIn summary it can be said that value co-creation in a buyer-seller relationship can beachieved if there is interdependence between the companies. If there is interdependence andthere is a positive trade-off between the benefits of involvement and sacrifices forinvolvement, there exists value co-creation potential. The potential is realized throughexploiting interdependencies in order to create exchange value or use value. Value cocreationimplies a high-involvement relationship. A partnership is a type of alliance, whichrequires high-involvement. This reasoning is summarized in the figure below.ÎtÏÐ¤ÑÒdÓbÔÕOÔ Öd×%ØdÓMÓM×ÓMÓbÙ×ÚbÕ*ÒbÛ ÕTÜ Ø©Ý©×ÒbÛ Û*Þ×Õfß"×d×Ú=Þ×©Ú×bÛ^ÔÕfÓØÚÝÓMØdàÜfÔ ÛfÔ àM×dÓÒÛ*áÔ âoá©ã"Ô ÚÖdÒä Öd×oÙ×ÚbÕÏ å Ï åæçÜ Óç©Ô Údâ%ØáÔ âá©ãTÔ ÚÖdÒoä Öd×Ù×ÚbÕÚÜ ×ä ØbÕTÔ Ò©ÚdÓáÔ Ñ-ßÔÕTá%ØÑØÜ ÕTÚd×Ü*Ô ÚÜÒÜ Ý©×ÜÕfÒ=ØdàáÔ ×bÖd×DÓ@ÒoÙ×ÕTáÔ ÚdâÕTádØbÕ*àXØÚ=ÚdÒbÕÞb×DØdàáÔ ×Ö×dÝ=Øoä ÒÚd×Ï è Ï èébêÑ©ä ÒÔÕTÔ Údâ'Ü ×dàÔ Ñ©Ü Ò©àMØoäÔ ÚbÕf×Ü Ýd×Ñ×©ÚdÝ©×ÚàÔ ×dÓÔ ÚDÒ©Ü^Ý©×Ü ÕfÒÔØdàMàM×dÓXÓØÚdÝ6ÙØoë×=çdÓM×DÒbÛÜ ×dÓMÒç©Ü àM×ì^Ó@íZîØ©ÚdÝ%à@Ò©ãfàÜ ×dØbÕf×Ü×êádØÚâ©×-ÖdØä çd×%Ô Ú-ÕTád×Û ÒÜZÙïÒÛÔ ÚdàÜ ×dØÓM×dÝ%×bÛ ÛfÔ à@Ô ×ÚdàXð%ØÚÝ'çdÓM×Ô×ÖdØä çd×=Ô ÚÕTád×Û Ò©ÜZÙïÒÛFÙÒÜ ×Û ×bÛ Û ×dàOÕZÔ Öd×=Ü ×dÓMÒç©Ü àM×=çdÓM×Figure 4.7: Summary of the conceptual discussion on value co-creation through exploitation ofinterdependencies86
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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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Page 44 and 45: The analysis of the material was an
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Page 50 and 51: Critical events during the process
Page 52 and 53: interviewing, observing, reading, r
Page 54 and 55: unit. Going even further back in hi
Page 56 and 57: 3.4.1 Overview of the use of the va
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Page 60 and 61: argumentation alters the traditiona
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Page 64 and 65: industries. Innovation is the sourc
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Page 68 and 69: 4. A RELATIONAL APPROACH TO VALUE C
Page 70 and 71: est way to organize, any way of org
Page 72 and 73: 4.2 The IMP view on relationships a
Page 74 and 75: The focus and unit of analysis of t
Page 76 and 77: ecent book discuss how creating val
Page 78 and 79: not simply mutual dependence betwee
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Page 82 and 83: interdependence is associated with
Page 84 and 85: “ The performance of supplier arr
Page 86 and 87: Figure 4.5: Different value creatin
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Page 90 and 91: There is no simple or universal def
Page 94 and 95: 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
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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
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elationship and the people interact
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+ K !ñ ú ê ñ ê ö ë î ñ ï
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7.1 Perceived value as a prerequisi
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” We are in the process of develo
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and that is insane. We must be able
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è èèèè èèèè èè èè èè
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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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¥(¦§¨&©G§ªG¦(£(«¬¨$Z
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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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Value Co-Creation in Industrial Buyer-Seller Partnerships ... - Doria

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