[Summary Technology of the Week] Co-Creation: Next Level Collaboration
In the current world of digitalization, value creation through profitable growth can come only from innovation (Prahalad and Ramaswamy, 2012). However, the convergence of industries and the active role of consumers becoming essential in an increasingly networked society have called into question our basic conception of value and the processes that lead to its creation.
In our report we have provided a comparison between the business models of the company Threadless and Wikipedia. Threadless is an internet-based community that uses co-creation by bringing together its employees and customers. Designs are being created by and chosen by an online community, which indicates the crowdsourcing model of co-creation. Wikipedia is widely sharing digital knowledge. This open source movement of intellectual exchange uses co-creation in the form of user-generated content, since all participants contribute to the process and its results.
Both organizations are entirely different, however have one specific thing in common: co-creation. Co-creation refers to suppliers and customers creating value through customized, co-produced offerings. It can assist businesses in highlighting the point of view of the customers and improve the front-end process of identifying the customer’s wants and needs (Lusch and Vargo, 2006). Without their community members giving input to the content, the companies would not survive. Which makes it interesting to look at both companies and their business models.
We have found that the great strength of both business models is based upon a free of charge platform that is globally accessible to users and customers with a large amount of content available. The weakness of both however is the dependency relationship with their community members, when it comes to using the platform and providing content.
Wikipedia is a non-profit organisation that invests donations and funding into the company and its employees mostly work on a voluntarily base. This can be considered as a strength, as users will be more willing to donate to Wikipedia because it has provided the user good help. The advantage of the business model of Threadless is that because of the commitment of its members, it gets free designs of which they can sell their retail products. With this business model Threadless creates a win-win situation for the three parties: The winning designer receives a financial reward for its design, the community member is able to express and possibly purchase the design it loves, and Threadless sells the low-cost designs knowing there are enough buyers (Prahalad and Ramaswamy, 2004). Additionally, we have to acknowledge the weakness of the business model for the not-winning designers and the community members, investing time without (financial) results.
All in all, the future of co-creation lies in companies distinguishing the different goals of co-creators and by identifying the corresponding skills. Only then, companies can make the most out of the co-creators’ abilities. With companies learning to make smarter use of co-creators, we expect that co-creation will be a part of every business model in the future in many different forms. What do you think? Are you already participating in a co-creation environment?
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