Value-Creating Networks

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Description

Soumaya Ben Letaifa:

"A decade ago, Ulaga (2001) described the difficulty with handling and interpreting value creation and capture in a context in which businesses are increasingly organized in networks. The trend is continuing toward “value-creating networks” (Kothandaraman and Wilson, 2001), in which individuals, customers, partners,competitors, and suppliers collaborate, value-creation processes are shifting toco-creation with multiple actors, transforming value chains into open knowledge- or competency-based networks. New multilevel methodologies and new value-creation and -capture metrics need to be developed in order to understand how value isco-created through interactions among different socioeconomic actors and replacing traditional asymmetric perspectives (firm or customer centricity). Cutting-edge social technologies have enabled ecosystems of innovation to thrive nd to transform value creation into a more open and collaborative process (Adner and Kapoor, 2010). Organizations are shifting their strategy, focus, and capabilities from firm centricity to ecosystems in order to exploit open innovation opportunities (Van derBorgh et al., 2012). Traditional hierarchical models known for their efficiency (Teece, 1986; Williamson, 1979) are unsuitable in high and unpredictable technological andmarket shifts (Velu et al., 2013). Scholars recognize the need for a more networked organizational form enabling rapid adaptation to markets and high inter-organizational collaboration with customers, competitors, partners, and suppliers (Prahalad and Krishnan, 2008). New collaborative capabilities are necessary to stimulate, capture, and exploit innovation opportunities in ecosystems (Velu et al., 2013). In the new (ecosystemic) space of collaboration and innovation, the concept of value is being reinvented.A new multilevel and multi-actor perspective on “value,” “value creation,” and“value capture” distinguishes ecosystems from traditional value chains andtransactional networks (Gummesson, 2008; Vargo and Lusch, 2008). Indeed, with theemergence of the new service- and knowledge-based economy, the concept of value isbecoming more knowledge based, social, subjective, intangible, and complex and isshifting away from a post-industrial economic mantra (cost, efficiency, customerexpectations) (Pitelis, 2009). Value is no longer an economic equation, simply because itis a multilevel experience involving multiple actors in continuous interactions (Payneet al., 2008). Value co-creation is no longer restricted to a dyad as it involves interaction between at least two socioeconomic networks to which the supplier and the customer belong (Cova and Salle, 2008; Mele and Polese, 2011). This evolution shifts value creation from a linear economic process taking place in a specific production chain to a more networked, open, and emergent process involving multiple actors, including customers and competitors (Normann and Ramirez, 1993). This network perspective challenges the underlying assumptions of industrial economics (IO) (cost and demand are known to all firms, technology and innovation are exogenous to firms, and so on)(Pitelis, 2009).


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Where as the goal ofa biological ecosystem is survival, the goal of a business ecosystemisvalue co-creation through innovation (Iansiti and Levien, 2004). Ecosystems are characterized by coopetition (cooperation and competition) and interdependence (Adner and Kapoor, 2010). Each firm’s fate is related to that of the other members of the ecosystem, and they all have to collaborate closely in order to prosper. Innovation ecosystems are, by definition, networks in a mode of continuous interaction (Gummesson,2008), generating the ecosystem’s life, evolution, and transformation. Therefore, an ecosystem cannot be studied from a static point-of-view, ignoring its lifecycle. A closer look at the literature suggests that a greater understanding is needed of how these ubiquitous and complex ecosystems create and share value." (https://www.academia.edu/10252910/The_uneasy_transition_from_supply_chains_to_ecosystems_The_value-creation_value-capture_dilemma)