Value Chain 2.0
Description
By Xavier Comtesse:
"When consumers turn into active stakeholders in the economy, they become integral part of the value creation process. A new dimension is thus opened: the “value chain 2.0. “
This dimension is, in some sense, a continuation of the value chain concept established by Michael Porter in 1985. However, here the focus is on a participative economy.
Value chain 2.0 takes into account the active consumer in the production of value, across every level of a company’s activities. Henceforth, we call the active consumer the “ConsumActor “ to indicate this reality.
The ConsumActor acts along two dimensions, as a:
- creator of context (action)
- creator of content (knowledge)
We recognize how deeply this shift towards “customer empowerment” is affecting the economy, especially in Internet-based industries."
Graphic
On page 3 of this document:
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Discussion
The classic linear representation of the value chain by Michael Porter needs therefore some fundamental rethinking. How can the old value chain integrate the non-linear, complex and networked realities of the participative economy?
"1.- Participative Activities vs. Primary Activities
The basic activities of the company must henceforth integrate the activities of the ConsumActor.
1.1. Open Inbound Logistics vs. Inbound Logistics: The supply (reception, stock and distribution of raw materials) can be entrusted in certain cases to the ConsumActor (e.g. The customer arrives with his own T-shirts for personalization).
1.2. Co-operations vs. Operations: the ConsumActor participates actively in the manufacturing process (e.g. Wikipedia)
1.3 Outbound Logistics by Customers vs. Outbound Logistics: The ConsumActor is in total or partial charge of the marketing activities (e.g. EBay).
1.4 Viral vs. Marketing and Sales: The techniques of viral marketing rely on the customers themselves (e.g. Amazon)
1.5 Communities of Practice vs. Services: The communities of practice assume totally or partially the after-sale services.
2.-Global activities vs. Support Activities
The support environment does not belong any longer to the company itself, but to the whole ecosystem in which the company is immersed in.
2.1.Multistakeholders Infrastructure vs. Firm Infrastructure: The internal infrastructures of a company connect directly to the infrastructures of the other "stakeholders.” The result is a multi-stakeholder environment. (e.g. computer cloud).
2.2.Customer Network Management vs. HR management: The management of human resource management is extended and now also includes the client’s network. (e.g. Facebook).
2.3. Co-Creation vs. Technology Development: Research and development integrates the creativity of a company’s ConsumActors (eg P&G Connect).
2.4 Open Procurement vs. Procurement: ConsumActors penetrate also the supply chains.
Conclusion:
The model of the value chain 2.0 presented above takes into account the change of paradigms imposed by the active participation of ConsumActors in the economy.
When customers are no longer in a passive or self-service mode, but have become active -- i.e., operating in a do-it-yourself, co-design or co-creative mode --, the traditional value chain of Michael Porter is no longer effective.