(Prahalad Ramaswamy)

Knowledge Center

Summary, forum, best practices, expert tips and information sources.

62 items • 415.269 visits



What is Co-Creation? Description

Co-CreationAccording to C.K. Prahalad and Venkatram Ramaswamy, deregulation, emerging markets, new forms of regulation, convergence of technologies and industries, and ubiquitous connectivity have changed many facets of the business world. And are still causing further changes.

These factors have changed the nature of consumers. Today consumers are informed, networked, active and global.
These factors have also changed the nature of companies. Today firms can fragment their value chain in ways that were not possible before. Both the physical and the non-physical part of corporations (business and management processes) can be split up.

The above trends are enabling a new form of value creation: Co-Creation, in which value is not created in the firm and then exchanged with the customer, but in which value is co-created by the firm and the consumer. Value will have to be jointly created by both the firm and the consumer. In the traditional system, where firms decide on the products and services they will manufacture, by implication they decide what is of value to the customer. In this system, consumers have little or no role in value creation. During the last two decades, managers have found ways to partition part of the work done by the firm and pass it on to their consumers. Be it self-checkout, involvement of a subset of customers in product development, or a range of variants in between. Note that Co-Creation goes far beyond being merely customer oriented.

Connected to this trend of jointly creating products, according to Prahalad, we are also moving away from a company- and product-centric view of value creation towards an experience-centric view of Co-Creation of value. High-quality interactions that enable an individual customer to co-create unique experiences with the company are the key to unlocking new sources of competitive advantage. Products are but an artifact around which compelling individual experiences are created.

Origin of Co-Creation. History

Back in the 1990s, Prahalad and co-guru Gary Hamel published an influential management theory: "Core Competence". Core Competences are the unique capabilities and know-how that give a company its competitive edge.

Steps in Co-Creation. Process

Typical steps involved in co-creating value include:

  1. Defining clear objectives for the project.
  2. Figuring out who are the right customers to involve in the process. Compare: Kraljic Model. The customers of today might be different than the customers of tomorrow.
  3. Working with customers to find out what they really want to include in a product or service.
  4. Designing products or systems jointly to meet those customers' needs. This includes selecting the partners to be included in your network.
  5. Deciding how to share the value.
  6. Overcoming internal resistance to change - within seller, buyer and partner organizations. This is a critical step in ensuring that you control the channel.

Limitations of Co-Creation. Disadvantages

  • Markets and industries and companies and systems and people do not change quickly. So it may take quite some time before the whole world is co-creating.
  • Collaboration is a lot harder than competition.
  • The concept challenges many of the habits of managers. To change the mind-set of people within a company into the way that an external customer thinks, is not easy.
  • Accounting rules that are based on what a company "owns", are also challenged. Accounting laws are also notoriously hard to change.

A final note on Co-Creation: Try it out. Here and now!

Want to experience Co-Creation yourself? Try it out on 12manage. Begin a new topic about Co-Creation.

Book: C.K. Prahalad and Venkatram Ramaswamy - The Future of Competition

Special Interest Group

Co-Creation Special Interest Group.

Special Interest Group
Special Interest Group (126 members)


Forum discussions about Co-Creation. Below you can ask a question about this topic, share your experiences, report a new development, or explain something.

🔥 Review of WIKINOMICS (Tapscott)
Why is it worthwhile to read this book?We're moving away from a closed, hierarchical structure focused on capital and physical goods. In this old system, you tried to be a good manager while you mov...
Comments1 comments
topic How to Start with Co-Creation?
We are a flour mill focused on high-end customers who use wheat flour. Our main strategy is tailor-made flour for the companies that have some particular requirement and are willing to pay for the req...
Comments2 comments
topic Value Co-creation in FMCG
Dear ladies and gentlemen, I am writing a research paper on 'Value co-creation in fast moving consumer goods (FMCG) and its impact in reducing product cannibalization'. Your contribution to this topic...
topic Internal and External Views and Values of Co-creation
Because the term creation is involved, it invokes parenthood or patent hood. Depending on the view and value of the perceived creator. If an organization were to ask their customers what product or se...
topic Combination of Inside-out and Outside -in
Co-creation is the combination of inside-out and outside-in strategy. Good, but not easy in the real world....
topic Open Innovation Strategy
According to Johan Saunders of Sara Lee (in 'Handboek Communities', 2009, p 32-34), companies can use an 'open innovation' strategy to interact with both customers and other relations (e.g. suppliers)...
topic Co-creation also in Health Care!
In services sector like health care, the patient's values and choice of treatment desired by him should be given due regard. The treatment plan should be discussed with him to ensure compliance and su...
Comments1 comments
topic Some Technical Tools for Co-creation
Using artificial intelligence languages like Lisp, Prolog one can build a database of an expert system in which users of service enter the problem to start a chain. The others to add on to it would b...
topic How to Figure Out the Right Custormers?
Refering to the above steps in the Co-creation process, how should we select customers under Kraljic model, how should we define the factor of matrix?...
topic Co-creation in Services has Strategic Value
I work for a company in the service business. Only early last year we started to implement CEM (Customer Experience Management) methods. However the recession has hit us extremely hard and the company...
Comments1 comments

Start a new topic

Start a new topic about Co-Creation

Best Practices

The best, top-rated topics about Co-Creation. Here you will find the most valuable ideas and practical suggestions.

🥇 Co-creation is Real: Facebook Example
Co-creation is real and here now. Take Facebook: infrastructure supplied by company, content supplied by market. The key to successful co-creation is identifying and engaging the right customer group....
Comments12 comments

🥈 Implementing Co-creation Internally?
What would possibly happen if co-creation were implemented within the firm, looking at management as the provider of "products" - business directions, empowerment, etc. And the employees as the users ...
Comments7 comments

🥉 Co-creation in Service Sector
How does co-creation apply to the service sector? Any examples?...
Comments5 comments

Expert Tips

Advanced insights about Co-Creation. Here you will find professional advices by experts.


Four Principles for Co-Creation

Building a Co-Creative Enterprise
In their article “Building the Co-Creative Enterprise” (Harvard Business Review, October 2010), Venkat Ramaswamy and Fra...

Ways of Collaborating with Customers

Value Co-Creation, DART Model
In Prahalad’s two recent books, The New Age of Innovation (2008) and The Future of Competition: Co-creating Unique Value...

Recent Innovation Trends | New Innovation Types

Open innovation, User Innovation, Value Innovation, Bottom-up Innovation
Roland Bel (2012) outlines and explains four types of innovations that have become more and more important since the las...

Approaches to Understand your Customer's Needs

Customer Targeting, Customer Needs Identification, Customer Behavior
In order to transform your customer’s experience and to better understand your customer’s needs, it is helpful to constr...

DART Model Example: Nike/Apple

Co-Creating Value
In the article “Co-Creating Value Through Customers’ Experiences: the Nike Case” by Venkat Ramaswamy (Strategy & Leaders...

Classes of Innovation | Sources of Innovation

Innovation, Creativity, Organizational Innovativeness, Lateral Thinking, Out of the Box Thinking, Blue Ocean Strategy
TWO CLASSES OF INNOVATION Innovation can be triggered or enabled by two broad classes: KNOWLEDGE PUSH: Innovation trig...

Designing Complex Products or Systems Through Iterative Rapid-cycle Prototyping

Design Thinking, Disruptive Innovation, Blue Ocean Strategy, Introducing Complex Systems, Co-Creation
Today, organizations are increasingly developing and designing new and complex products or systems. In other words, the ...
Information Sources

Various sources of information regarding Co-Creation. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops.


A Service-Oriented View on Marketing

Service-Dominant Logic, Perspectives on Marketing
Presentation about a service-dominant logic mindset in marketing, including the following sections: 1. Getting the logi...

Perspective: Biography Prahalad (1941-2010)

Developing a Broader Perspective towards the Ideas of Prahalad
A short biography on C.K. Prahalad's career and ideas....

Research Links

Jump to further research sources regarding Co-Creation.













Compare with Co-Creation: Kraljic Model  |  Customer Relationship Management  |  Positioning  |  Product Life Cycle  |  Outsourcing  |  3C's  |  Marketing Mix  |  Extended Marketing Mix  |  Relationship Marketing  |  Bottom of the Pyramid  |  Core Competence  |  Strategic Intent  |  Disruptive Innovation

Return to Management Hub: Change & Organization  |  Marketing & Sales  |  Strategy & Innovation  |  Supply Chain & Quality

More Management Methods, Models and Theory

Special Interest Group

Special Interest Group

Do you know a lot about Co-Creation? Become our SIG Leader and gain worldwide recognition as an expert.

About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
© 2023 12manage - The Executive Fast Track. V16.3 - Last updated: 1-10-2023. All names ™ of their owners.

12manage is looking for BA/MBA students. More info.