Research Outline

Background
During the course of my study Business Administration, I developed interests and skills in innovation management. More and more, my attention was fixed on this interesting subject. The logical continuation was a Bachelor thesis in line with this interest. In Lisbon, Portugal, I had the chance to work on a research developed by myself within the ‘Patterns in New Product Development’ project. The supplier involvement in NPD was researched within the Portuguese automotive industry. I noticed that the collaboration between first-tier and second-tier suppliers is very important in the automotive industry especially to overcome problems in the integration between R&D and manufacturing. Yet it appeared that most companies are not ready for these intensive forms of working together despite the fact that the automotive industry requires an integrated supply chain (Giesen, 2007).

Research
Nowadays, working together becomes more and more important, not only in the automotive industry but also in other industries and with other actors. In innovation, the paradigm changed from closed to open (Chesbrough, 2006). Open Innovation is suggesting that an organization is not able to do everything itself and is depending on other actors to get things done. It refers to the open boundaries of the organization in order to achieve innovation. This implies that an organization must collaborate with others to achieve their goals in an effective and efficient way. Much of the collaborative innovation was emphasized backwards through supplier integration. Companies focused on improving interaction with internal cross-functional and external suppliers. Yet there is a need for an increased level of emphasis on customers. Customers’ unique insights into needs, desires, constraints, and pain points have become more important due to their increased knowledge and experience. Consequently, it is critical to drive much more significant levels of customer integration and intimacy into the New Product Development (NPD) process. Working together with customers is also known as co-creation. I define co-creation as a NPD-project that involves two financially independent companies, a customer and a supplier, which both actively and directly cooperate within the process of New Product Development (from idea generation to commercialization), regardless of the degree of formality of this cooperation. Business models of projects or business units change when customers/users are motivated to contribute to the company’s value proposition. Customers can for example enhance the core capabilities of an organization or can offer access to new distribution channels. This leads to changes in the business model, whether expected or unexpected. Sometimes it leads to new business models that are co-created between company and customer. Companies choose or select customers that connect and enhance the company’s business model. The question rises what the criteria are to select such a customer in order to co-create value for NPD. One can imagine that when the customer’s competences suit the company’s objectives of the co-creation, this should lead to a successful co-creation. However, successful co-creation also depends on innovations in the business model in favor of the co-creation. When the business model is not open to co-creation, the customer cannot connect and add its value in a proper way. Consequently, there is a relation between the co-creation partner (a business customer), the company’s business model, and the success of co-creation.

Relevance
This combination of an in-dept research on co-creation and business models is new in academic research. Several attempts have been made in e-business industries, yet these were focused mostly on the consumer market. Moreover, research has been particularly vague about co-creation and business models. Consequently, it is important to shape and give an understanding of the combination of co-creation and business models. In a practical sense, clients of Capgemini Business Innovation Consulting deal with questions concerning co-creation with business customers in NPD and their effects on business models. For that reason, the outcomes of the research have a practical purpose in a sense that it extents the service offerings of Capgemini Business Innovation Consulting with which they support clients. This research explores what the factors are for a successful match between the co-creation partner and the company’s business model, and if this leads to successful co-creation.

Focus
The co-creation process consists of several events: the decision to start/enter a co-creation, the choice for an appropriate partner, the choice of structure for the co-creation, and dynamic evolution of the co-creation (over time). As the requirements of the co-creation align with the characteristics of a specific partner, it is assumed that companies can determine success in a co-creation by focusing on the selection for an appropriate partner. Customers are selected on specific characteristics, which the company needs in NPD. These characteristics, or competences, consist of which value the business customer (hereafter customer) creates, what the benefit is of the co-creation, what kind of knowledge the customer has, how interaction and involvement progresses, and what kind of network competences the customer has. These characteristics form the core capabilities and value configuration of the customer’s business model. This implies that business models of customer and company must be aligned. Yet alignment of business models results in changes or innovations on the building blocks, which benefits the co-creation. This study of well-established organizations, which are clients of Capgemini, researches first of all the influence of partner selection on co-creation success, and the influence of business model innovation on co-creation success.

Starting the research

Dear people!

Welcome to my blog! It will concern my graduation study at a large consultancy firm, Capgemini, in the Netherlands. I will keep you informed through this blog about the progress I make, and I would like to invite YOU to give comments, useful inputs and discussion subjects. This can really help my knowledge and experiences concerning the subject of co-creation. So please feel free to bring the co-creation and innovation concept to a higher level!

Today’s business is asking for new sources of innovation and creativity. On macro, meso, as well as micro level, there are distinct trends of value creation through co-creation. Organizations need to anticipate, rather than be reactive. Interactions with customers and other partners in networks become more important. In B2C environments, companies are aware of the need for personalized value. This is clearly not (always) the case in B2B environments.

An interview with Philips Design pointed out that co-creation is an egalitarian connection between a supplier and customer, where the business becomes democratized. Co-creation is a way to new value chains, and it will change the relations between companies. What is essential in co-creation is that a company involves (in a new, innovative way) people equally, which results in a win-win situation: the dialogue with these people is set up to increase value.

The Business Innovation team of Capgemini found out that their clients do not have the awareness, knowledge, ideas to set-up, and execute co-creation. Companies are mostly put off by co-creation, because of the unforeseen organizational hurdles in enabling co-creation. Capgemini Business Innovation would like to advice and support companies by providing insights into the co-creation process and its consequences so that companies are better able to co-create in order to increase business performance.

In this new form of ‘working together’, a new value chain becomes reality, where B2B and B2C do not exist anymore. Instead, a continuum, which alternates companies and customers, will form the value chain. Yet the first matter of importance is the common interest of a company and its actor to create value. Therefore, the question rises how companies think about co-creation; what it is that companies put off on co-creation and what are the organizational hurdles. Thus, we want to know how co-creation can be enabled. Through lots of literature on collaboration/cooperation, innovation management, and case studies at large Dutch companies, I will try to give 'roadmap to co-creation'.

As a student in Business Administration specialized in Innovation Management at the University of Twente, the Netherlands, I have acquired lots of knowledge during my study concerning Innovation Management. My Bachelor Thesis, which was performed in Lisbon, Portugal, focused on the organization of innovation in the automotive industry. The involvement and integration of suppliers (inter-company co-creation) in new product development was studied. With the work of this Master Thesis, I acquire more knowledge and experiences. I have the opportunity to develop myself in the scientific and consultancy environment. The goal is to work as good as possible on this research to become a Master of Science. Furthermore, it will be the goal to work on this subject after studying in order to shape the co-creation concept.

Next time, I will give a more specific understanding of this research and will explain how I think to make companies aware of the need for co-creation.

Ciao,

Daniël