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

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The world cruise industry is dominated by a few big players: Carnival Plc., Royal CaribbeanCruises Ltd, and Star Cruises. The industry in itself is quite young and in great expansion.At present only 3 % of American tourists are taking cruise vacations. Obviously there is stilla large market for the cruise companies to conquer.The marine power market is dominated by a few big players: MAN, Wärtsilä,Caterpillar (MaK) and General Electric. The focal Seller of this study is considered thepremium brand on the market representing the highest quality and price. (Interviews: Seller1, 2, 7, Buyer 9).5.1.1 The actors and the setup in a ship building and operating contextThe classical market relation, or the “ classical dyad” , illustrates the most basic marketrelation, where there is a buyer and a seller that interact on a market (Gummesson 1995). Inthe ship building context the basic setup of actors is a triad instead of a dyad. The triadconsists of a ship owner, a shipyard, and a focal equipment supplier.Figure 5.1: The triad in a shipbuilding projectThe ship owner or operator, in this case the Buyer, is the company that operates ships inorder to create business and profit. The owner builds ships by ordering a ship from ashipyard. Most cruise ships in the world are built in Europe, due to the accumulatedknowledge and skills of the European yards in carrying out cruise ship projects. Building aship takes about 2 years, during which time the ship owner is engaged in intense interactionwith the shipyard. The actual project is preceded by an intense period of months even yearsof planning, designing, bidding, and negotiating. However, what is relevant in this context isthat the ship owner only has a relatively short, intense period of interaction with the yard89
during a new building project. 11 After the ship has been delivered and the warranty period(usually 1 year) from the yard is over, the ship owner operates the ship and deals with all theequipment that is installed on board for over 20 years. This puts the cruise ship owner in asituation of having approximately 3000 different counterparts to interact with whileoperating a cruise ship.When the ship owner starts planning a new building project there are a number ofmajor issues to be solved. Among which the choosing of suppliers for major equipmentinstalled on board is one. For a cruise ship the most important equipment are airconditioning, power supply, toilets, and galley equipment. Most often the ship owner has apreference for suppliers of major equipment, usually based on previous good record andassociated with striving for economies of scale. The shipyard suggests the preferredsuppliers for major equipment to the ship owner. However, sometimes the owner insists ona certain supplier and trades off having a specific supplier to a higher price, while theremight be cases where the owner settles for what the yard suggests as its standard to astandard price. The latter case might be seen in projects involving more simple ship types,like standard container ships. In the case of a complex ship like a cruise ship, the decisionabout major suppliers is hardly ever likely to be a “ standard” one.A shipyard is in the business of building ships at a profit. The shipyard makes moneyon the difference between the cost of the installed equipment plus the cost for work and theprice that it gets for the ship from the customer. The economic logic for the yard is to buyequipment at minimum price, construct the ship as cost efficiently as possible, and to sellthe whole package at a maximum price. The shipyard offers a ship to the owner at a setprice, according to a specified makers list. The makers list specifies the suppliers for majorequipment at a set price. The shipyard can economize by offering standard ship designs andachieve both economies of scale and specialization by collaborating with sub-suppliers. Inits simplest form the logic and main interest for the shipyard is cost reduction - shipyardsare cost conscious, concentrating on cutting costs in order to maximize profit.However, it should be mentioned that there is an ongoing trend where shipyards areincreasingly starting to think along the lines of long-term customer relationships and aboutthe benefits of collaboration with both suppliers and customers.The figure below illustrates the actors in a ship-building project and their roles andgoals in the context of a ship-building project.9011 What deserves mentioning is that ship owners increasingly do engage in long-term relationships also withshipyards. This is due to economies of scale associated with ordering series of ships and the accumulated skills ofthe shipyards, which enable joint planning, design, and product development.
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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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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 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 92 and 93: The question of win-win in partners
Page 94 and 95: The following chapter, number five,
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
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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
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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
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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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