The future of competition: co-creating unique value with customers.

Our industrial system is generating more goods and services than before but customer satisfaction remains low in spite of having overwhelming choices, profit level of companies is shrinking though many more decision making tools are at its disposal. What is going wrong and how to set this right?

Companies are grappling with these issues and trying to fathom these problems. With the emerging technologies, customers are well informed, well connected with their peer groups and very active in their domain. Now customers have started playing dominant role in the value chain through co-creation of experience which enhances the value.

The book can be divided into three distinct parts covering twelve chapters, highlighting future of competition and the role to be played by consumers, markets and companies. First six chapters develop the framework of consumers' role in the changing scenario. Early chapters give a brief account of the change that is taking place; how autonomy of companies in creating product value and satisfying consumers, is slowly and surely giving way to consumer-centric approach? How consumer and firm interact and co-create value, and how the co-creation experience becomes the very basis of value? The authors develop the co-creation experience framework in the subsequent chapters very cogently and lucidly. It goes like this, the co-creation experience depends highly on individuals. Each person's uniqueness affects co-creation process as well as co-creation experience. Dialogue, access, risk assessment and transparency (DART) are the building blocks of value co-creation process and companies use this to engage customer effectively as collaborator. In the domain of competition, co-creation experience plays the most important role in decision making. This process further gains momentum in the later chapters of first part as co-creation experience is shaped by dimensions such as choice of channels, options made available, quality of transaction and price-experience relationship. This experience will vary from consumer to consumer due to the different traits of individual. To ensure that the transaction between the consumer and the firm produces positive co-creation experience, the presence of an appropriate environment is imperative, authors develop this concept very carefully. This environments accommodate the heterogeneity of consumer and facilitate a variety of co-creation experience. In the present day world, emerging technology acts as an experience enabler, facilitating innovation in experience environment. With intense competition, sky high consumer expectation; consumer looks for uniqueness which is possible only through personalized co-creation experience. A personalized co-creation experience gets enriched with the event, context, personal involvement and personal meaning. As the consumer moves to the centre stage of the business activity, challenges to accommodate variety of heterogeneous experience grows. This is overcome by networking different experience groups.

The second part of the book discusses the changing role of market in the coming days. It is no more the defined place as we understand in the traditional definition of market where exchange takes place. Rather it is a forum where the company and consumer converge, dialogue among the consumer, the firm, consumer communities takes place. It is a space of potential co-creation experience in which individuals come forward to pay for experience.

The last part deals with the future of companies--how companies and managers should change to cope with the consumer-centric paradigm. The managers have to understand the business as consumers do, to offer unique co-creation experience. They have to bring in innovations, create rapid knowledge base, discover uncharted areas just to ensure the presence of uniqueness in creating a positive experience for the customer. The authors emphasize that to create value continually, to satisfy heterogeneous customer demand, managers must co-create new knowledge environment and share the same with all line managers. The book goes on to say how companies in future will depend critically on its managers and the need to develop a knowledge environment. In order to achieve this there has to be different strategies which will focus more on the accessing and leveraging resources through collaborating with consumers, suppliers, partners and thematic manager communities. The goal of the company accordingly has to shift from owning resources to have command over resources through collaboration. The degree and depth of collaboration will weigh favorably for the competitive edge the company. This part also illustrates the key functional areas like product design, channel management, brands, marketing, sales and services which will see major conceptual transitions.

The book makes an interesting reading with well researched illustrations from different functional areas which are correlated well with the new framework of the evolving concepts. One comes to know through these illustrations, advancement made in different critical areas with the help of emerging technologies. Also we see the changes that has taken place in the management practices and how different it is from the traditional theories.

This is a pioneering book in its own right, and will prove to be very useful to practicing mangers, students in management schools. Many new path breaking concepts have been discussed in great detail and finesse. I feel very strongly that this book will be very relevant to the new generation policy makers as well.

Reviewed by: Subrata Biswas, Animal Husbandry and Dairy Department, Govt. of Kerala, India

The authors--C.K. Prahlad and Venkat Ramaswamy, are known for their non-traditional approach and that has made possible to bring out this path breaking book. Unlearning age old management practices and understanding the changes that is sweeping the business world and giving a framework to the still evolving concept of co-creation of value where customer is at the centre stage is indeed a tough task. And authors have accomplished that with aplomb.