The Impact of Co-creation on Business Models
A Research on the Changes in Business Models through Co-creation Relations


...
Content


   Capgemini
   Background – Business Developments towards Co-creation
   Problems
   Main Research Question...
Capgemini


 Consulting: Advices in business transformation
 Technology: Design/integrate technological solutions
 Outs...
The developments in the business landscape
            indicate a trend towards co-creation

 Developments in the busines...
Problems (1): Business Model changes through
                            Co-creation
                 Resources           ...
Problems (2): Co-creation relation


The decisions to     The choice of an               The choice of                    ...
Problems (3): NPD process


 Stage 0:      Stage 1:                     Stage 3:                    Stage 4:
             ...
Main Research Question


 In what way affects partner selection and co-creation structure of
  a co-creation relation bet...
Methodology


 Literature Study
   • Theoretical Framework
   • Configuration
   • Propositions
 Empirical Research at 7...
Theoretical Findings (1)


 NPD Process
   • Different roles of partners in New Product Development
 Co-creation Partner...
Theoretical Findings (2): Configuration &
                                   Propositions


                              ...
Results (1): Overall Results

Comparison of Organizations on the Research Variables

Company            A                 ...
Results (2): Comparison of Configurations
Stage in NPD                 Variables                Theory                    ...
Results (3): Comparison of Configurations
Stage in NPD                Variables                 Theory                    ...
Conclusions

 Early phases of NPD
   • More alignment dimensions
   • Co-creation structure with high interdependence
   ...
THANK YOU FOR YOUR ATTENTION


        Questions???




                        | Daniël J.E. Giesen
Together. Free your energies

      http://www.capgemini.com
Research Questions


 In which different stages of NPD do organizations co-create?
 Which selection criteria do organiza...
Co-creation Structures



Level of Interdependence          B2B Modes of Collaboration
                                  J...
Propositions


   Organizations that (start to) co-create in concept generation will:
      •   Search for high alignment...
Dataset

                                                  Co-creation                                         Contact    ...
Measurements

Interview Question                 Variable
1, 2, 3, 4                         Company Outline
5, 6         ...
Measurements (2)
Interview Question                      Variable      Items                                         Sub i...
Measurements (3)

Interview Question    Variable         Items                 Sub items
                                 ...
NPD Process


                                                                  Stage 3:
    Stage 0: Concept      Stage 1...
Alignment in Partner Selection

                   Resource/Market   Overlapping   Motivational   Goal
    Technical      ...
Interdependence in Co-creation Structure


      Low Interdependence   Medium Interdependence       High Interdependence
A...
Business Model Changes
    Value                      Distributi                  Value       Core
                Custome...
NPD Process & Alignment in Partner Selection

                                                                            ...
NPD Process & Interdependence in Co-creation
                                    Structure

                              ...
Alignment in Partner Selection &
                         Interdependence in Co-creation Structure


                     ...
NPD Process & Business Model Changes



                                                                       Stage 3:
  ...
Alignment in Partner Selection & Business
                                Model Changes


                      Low Alignm...
Interdependence in Co-creation Structure &
                            Business Model Changes

                      Low I...
Business Model Example: Company A


                    Resources                                    Offer                ...
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Presentation M Sc Thesis Colloquium

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  1. 1. The Impact of Co-creation on Business Models A Research on the Changes in Business Models through Co-creation Relations Master Thesis Daniël J.E. Giesen | Daniël J.E. Giesen
  2. 2. Content  Capgemini  Background – Business Developments towards Co-creation  Problems  Main Research Question  Methodology  Theoretical Findings  Empirical Results  Conclusions | Daniël J.E. Giesen
  3. 3. Capgemini  Consulting: Advices in business transformation  Technology: Design/integrate technological solutions  Outsourcing: Managing IT resources  Consulting: Business Innovation (14 people) • Improve innovation capabilities of organizations for market success • Research: collaborations between organizations for innovation | Daniël J.E. Giesen
  4. 4. The developments in the business landscape indicate a trend towards co-creation  Developments in the business landscape: • Globalization, advances in IT, strong competition, organizational innovations • Saturated markets & decreased margins  Organizations search for new opportunities in markets & technologies • Increased attention on B2B cooperations with customers and/or suppliers in New Product Development (NPD)  Co-creation as a way to add value in NPD • Active & direct cooperation customer-supplier (financially independent) • ‘Learning with’ & ‘create value with’ | Daniël J.E. Giesen
  5. 5. Problems (1): Business Model changes through Co-creation Resources Offer Customer Co-creation Customer Partner Network Relationship Co-creation partners? Relations developed / maintained? Core Distribution Value Customer Business Value Proposition Capabilities Channels Configuration Segment What is the offer? Capabilities/ How to reach Functions Main Activities? For who is the offer? Competences? markets? Revenue Cost Streams PROFIT Structure In which way do we What are the costs? earn money? Financial Performance Figure: The Business Model (adapted from Osterwalder, 2006) | Daniël J.E. Giesen
  6. 6. Problems (2): Co-creation relation The decisions to The choice of an The choice of Dynamic enter a co- appropriate structure for the evolution of the creation partner co-creation co-creation Figure: The sequence of events in co-creations (Adapted from Gulati, 1998)  Co-creation partner selection • Which selection criteria are used? • Changes in Business Model?  Co-creation structure • Which structures are used? • Relation with partner selection? • Changes in Business Model? | Daniël J.E. Giesen
  7. 7. Problems (3): NPD process Stage 0: Stage 1: Stage 3: Stage 4: Stage 2: Concept Project Manufacturing Commercializa- Development Generation Evaluation Development tion Figure: Stages in the NPD Process (Griffin, 1997)  In which stages of NPD does Co-creation take place?  Relation with partner selection?  Relation with co-creation structure? | Daniël J.E. Giesen
  8. 8. Main Research Question  In what way affects partner selection and co-creation structure of a co-creation relation between customer and supplier the organization’s business model, given the stage of NPD in which the co-creation relation takes place? Co-creation Relation Co-creation Partner Selection (Independent Variable) Business Model NPD Process (Dependent Variable) (Independent Variable) Co-creation Structure (Independent Variable) Figure: Conceptual Design | Daniël J.E. Giesen
  9. 9. Methodology  Literature Study • Theoretical Framework • Configuration • Propositions  Empirical Research at 7 Dutch Manufacturing Enterprises • Interview • Explore Propositions  Comparison of Theoretical & Practical Configurations | Daniël J.E. Giesen
  10. 10. Theoretical Findings (1)  NPD Process • Different roles of partners in New Product Development  Co-creation Partner Selection • Technological, strategical, & relational alignment dimensions  Co-creation Structure • Level of Interdependence: Low  Medium  High • Different governance modes: Licensing  Co-makership  Joint Venture  Business Model • Influence of co-creation partner on Business Model building blocks • Business Models on project, business unit, & company level • Different consequences for the organization | Daniël J.E. Giesen
  11. 11. Theoretical Findings (2): Configuration & Propositions Stage 3: Stage 4: Co-creation in Stage 0: Concept Stage 1: Project Stage 2: Manufacturing Commercializa- NPD generation evaluation Development development tion Partner High level of High level of Medium level of Low level of Low level of Alignment alignment alignment alignment alignment alignment Co-creation High Medium-high Medium Medium-low Low Structure interdependence interdependence interdependence interdependence interdependence Large changes Medium-high Few changes within business changes within Medium changes Medium-low Business Model within business model; could end business model; within business changes within (change) model; especially up in new especially on model business model on customer side business models resources side Proposition 1 Proposition 2 Proposition 3 Proposition 4 Proposition 5 Table: Theoretical Configuration & Propositions | Daniël J.E. Giesen
  12. 12. Results (1): Overall Results Comparison of Organizations on the Research Variables Company A B C D E F G Stage 0: Concept Stage 2: Stage 0: Concept Stage 3: Stage 4: Stage 1: Project Stage 2: generation and Development generation and Manufacturing Commercializati evaluation and NPD Process Development further and further further development on further Supplier / Customer / Partner Customer Supplier Supplier Customer Supplier Competitor Partner Technological Technological Technological Technological Technological Technological (2); Strategical (3); Strategical (3); Strategical (2); Strategical Alignment Technological (2) (2); Relational (1) (2); Relational (1) (2); Relational (1) (2); Relational (3) (2) (2); Relational (3) Joint R&D, Research Customer - marketing & Co-makership / Joint venture / cooperation / supplier relation Transitory / low Licensing / low medium high production / Structure interdependence interdependence high / medium interdependence interdependence high interdependence interdependence interdependence Business Model Business unit Business unit Project level Project level Company level Project level Project level level level level Large change, Large change, Business Model new business new business Medium change Medium change Small change Small change Medium change (change) model model | Daniël J.E. Giesen
  13. 13. Results (2): Comparison of Configurations Stage in NPD Variables Theory Practice Explanation Partners already have a long-term relationship. As in theory, medium-high Partners are competitors alignment on Co-creation partner of each other. High level of alignment selection (alignment) technological, strategical, Therefore, not all & relational dimensions alignment dimensions can be used. Co-creation structure Stage 0 Concept High interdependence As in theory (interdependence) generation Co-creation relations can still be in the beginning Large changes within As in theory, medium- stages of NPD. Therefore, business model; could end large changes, also new the definite business Business model change up in new business models business models model can be designed when products are actively sold. Co-creation partner High level of alignment As in theory selection (alignment) Co-creation structure Medium-high As in theory, high (interdependence) interdependence interdependence Stage 1 Project evaluation Medium-large changes As in theory, large within business model; changes, also new Business model change especially on resources business models side Table: Comparison of the Co-creation & Business Model Configuration conducted from Theory and Practice | Daniël J.E. Giesen
  14. 14. Results (3): Comparison of Configurations Stage in NPD Variables Theory Practice Explanation As in theory, medium-low Partners are more or less alignment, focusing on condemned to each other. Co-creation partner Medium level of alignment selection (alignment) technological & strategical Therefore, not all alignment dimensions dimensions can be used. Stage 2 Development Co-creation structure Medium interdependence As in theory (interdependence) Medium changes within Business model change As in theory business model As in theory, alignment Co-creation partner focuses on technological Low level of alignment selection (alignment) dimensions Stage 3 Manufacturing Co-creation structure Medium-low As in theory, mostly low development (interdependence) interdependence interdependence Medium-small changes As in theory, mostly small Business model change within business model changes in business model As in theory, alignment Co-creation partner focuses on technological Low level of alignment selection (alignment) dimensions Co-creation structure Stage 4 Commercialization Low interdependence As in theory (interdependence) Few changes within business model; especially Business model change As in theory on customer side Table: Comparison of the Co-creation & Business Model Configuration conducted from Theory and Practice | Daniël J.E. Giesen
  15. 15. Conclusions  Early phases of NPD • More alignment dimensions • Co-creation structure with high interdependence • Large changes in business model / new business model  Later phases of NPD • Less alignment dimensions • Co-creation structure with less interdependence • Smaller changes in business model  Logical explanations for outliers  Findings can be assumed  Preconditions for futher research • New relationship • No forced relationship • Finalized NPD process | Daniël J.E. Giesen
  16. 16. THANK YOU FOR YOUR ATTENTION Questions??? | Daniël J.E. Giesen
  17. 17. Together. Free your energies http://www.capgemini.com
  18. 18. Research Questions  In which different stages of NPD do organizations co-create?  Which selection criteria do organizations use in choosing a co-creation partner?  What kinds of structures do organizations use to organize co-creation relations?  What is a business model?  Which changes do organizations face in their business models?  In which way does the stage of NPD influence the choice of a partner in a co-creation relation?  In what way does the stage of NPD influence the choice for a structure of the co-creation relation?  To what extent does a partner choice determine the structure of a co-creation relation?  In what way does the stage of NPD influence an organization’s business model?  To what extent does the choice for a partner for a co-creation relation influence the organization’s business model?  To what extent does the chosen structure for the co-creation relation influence an organization’s business model? | Daniël J.E. Giesen
  19. 19. Co-creation Structures Level of Interdependence B2B Modes of Collaboration Joint Ventures & Research Cooperations High Joint R&D Minority Investment and Cross-holding Medium Customer-Supplier Relations, Co-production, Co-makership Technology Exchange Agreements (mutual), Technology Sharing, Cross-licensing Low One-directional Technology Flow, Licensing, Transitory | Daniël J.E. Giesen
  20. 20. Propositions  Organizations that (start to) co-create in concept generation will: • Search for high alignment with a partner • Structure the co-creation relation with high interdependence • Face large changes within business model or face new business models  Organizations that (start to) co-create in project evaluation will: • Search for high alignment with a partner • Structure the co-creation with medium-high interdependence • Face medium-large changes within business model, especially within resources part  Organizations that (start to) co-create in development will: • Search for medium alignment with a partner • Structure the co-creation with medium interdependence • Face average changes within business model  Organizations that (start to) co-create in manufacturing development will: • Search for less alignment with a partner • Structure the co-creation relation with medium-low interdependence • Face medium-small changes within business model  Organizations that co-create in commercialization will: • Search for less alignment with a partner • Structure the co-creation relation with low interdependence • Face small changes within business model, especially within customer part | Daniël J.E. Giesen
  21. 21. Dataset Co-creation Contact Date Business Unit Products Co-created Product Stage of NPD Partner Date Interview Above Water Systems Customer & Naval & Concept A Network-centric Research Key Exchange Cell 02-06-2008 09-06-2008 Maritime generation Systems Institute Nutritional Ingredients for Animal B Supplier Enzymes Development 05-06-2008 10-06-2008 Products Nutrition Corporate Mobile, Processor, Supplier / Wireless Concept C Innovation & 05-06-2008 12-06-2008 Memory Technologies Competitor Applications generation Technology Management Manufacturing D Retail Support Loss Prevention Systems Supplier 02-06-2008 17-06-2008 Information System development Technology Commercializa- E Melamine Melamine Customer Package, 05-06-2008 19-06-2008 tion Accelerator Aramid/Nomex Advanced High-segment Textiles F Supplier applications in Development 02-06-2008 27-06-2008 Textiles (specific characteristics) Textiles Decorative varnish Chemicals Aluminum Plating Project G Performance coatings Customer 25-06-2008 30-06-2008 (Polymer) Process evaluation Chemical products | Daniël J.E. Giesen
  22. 22. Measurements Interview Question Variable 1, 2, 3, 4 Company Outline 5, 6 Respondent’s Background 7, 8, 10, 11 Co-creation Relation (Characteristics) 9 NPD process 13, 14(a-c) Co-creation Partner Selection 12 Co-creation Structure 15, 16 (a-i) Business Model 17 Business Model Changes Interview Question Variable Items Concept generation Project evaluation 9 NPD process Development Manufacturing development Commercialization | Daniël J.E. Giesen
  23. 23. Measurements (2) Interview Question Variable Items Sub items Technological capabilities Technological alignment Resource/Market knowledge complementarity Overlapping knowledge base Co-creation Motivational correspondence Partner 13, 14(a-c) Strategical alignment Goal correspondence Selection Compatible cultures Relational alignment Propensity to change Long-term relationship Degree of Nr. of alignment Alignment dimensions Items Sub items Interview Question Variable Low 1-3 Joint Ventures & Medium 4-5 High Research Cooperations High 6-8 Joint R&D Minority Investment and Cross-holding Customer-Supplier Medium Relations, Co- production, Co- 12 Co-creation Structure makership Technology Exchange Agreements (mutual), Technology Sharing, Low Cross-licensing One-directional Technology Flow, Licensing, Transitory | Daniël J.E. Giesen
  24. 24. Measurements (3) Interview Question Variable Items Sub items Partner network Resources Core capabilities Value configuration Offer Value proposition 15, 16 (a-i) Business Model Customer relation Customer Customer segment Distribution channel Cost structure Financial performance Revenue streams Interview Question Variable Items Score Business model Small 1 17 building block Large 3 changes Variable Item Score Small 1-9 Total business model change Medium 10-18 Large 19-27 | Daniël J.E. Giesen
  25. 25. NPD Process Stage 3: Stage 0: Concept Stage 1: Project Stage 2: Stage 4: Manufacturing generation evaluation Development Commercialization development Co-creation with     A customer starts Co-creation with   B supplier starts Co-creation with     C supplier/competitor starts Co-creation with D supplier Co-creation with E customer Co-creation with F supplier Co-creation with    G customer/partner starts | Daniël J.E. Giesen
  26. 26. Alignment in Partner Selection Resource/Market Overlapping Motivational Goal Technical Compatible Propensity Long-term knowledge knowledge corresponden correspon Total capabilities cultures to change relationship complementarity base ce dence A X X X X X 5 B X X X 3 C X X X X X X X 7 D X X 2 E X X X 3 F X X X X X 5 G X X X X X X 6 Low alignment Medium alignment High alignment A X B X C X D X E X F X G X | Daniël J.E. Giesen
  27. 27. Interdependence in Co-creation Structure Low Interdependence Medium Interdependence High Interdependence A Research cooperation B Co-makership C Joint venture D Transitory E Licensing F Customer-supplier relation G Joint R&D | Daniël J.E. Giesen
  28. 28. Business Model Changes Value Distributi Value Core Customer Customer Partner Revenue Cost Propositi on Configura Capabiliti Total Segment Relation Network Streams Structure on Channel tion es A 3 1 3 3 3 3 16 B 3 3 3 3 1 13 C 3 1 3 1 3 3 1 3 3 21 D 1 1 1 1 1 5 E 1 1 3 1 3 9 F 1 1 3 3 1 1 10 G 3 1 1 3 3 3 3 3 3 23 Small change Medium change Large change X A (Project level) X B (Project level) X C (Company level) X D (Business unit level) X E (Project level) X F (Business unit level) X G (Project level) | Daniël J.E. Giesen
  29. 29. NPD Process & Alignment in Partner Selection Stage 3: Stage 0: Concept Stage 1: Project Stage 2: Stage 4: Manufacturing generation evaluation Development Commercialization development Company B – Company D - Company E - Low Alignment Supplier Supplier Customer Company A – Medium Alignment Company F - Supplier Customer Company C – Company G – High Alignment Supplier/Competitor Supplier/Partner | Daniël J.E. Giesen
  30. 30. NPD Process & Interdependence in Co-creation Structure Stage 3: Stage 0: Concept Stage 1: Project Stage 2: Stage 4: Manufacturing generation evaluation Development Commercialization development Low Company D - Company E - Interdependence Transitory Licensing Company B – Co- makership Medium Company F – Interdependence Customer-Supplier relation Company A – Research High Company G – Joint Cooperation Interdependence R&D Company C – Joint Venture | Daniël J.E. Giesen
  31. 31. Alignment in Partner Selection & Interdependence in Co-creation Structure Low alignment Medium alignment High alignment Company D – Supplier Low Interdependence Company E – Customer Company A – Customer Medium Interdependence Company B – Supplier Company F – Supplier Company C – Competitor High Interdependence Company G – Partner | Daniël J.E. Giesen
  32. 32. NPD Process & Business Model Changes Stage 3: Stage 0: Concept Stage 1: Project Stage 2: Stage 4: Manufacturing generation evaluation Development Commercialization development Low BM Change Company D Company E Company B Medium BM Change Company A Company F High BM Change Company C Company G | Daniël J.E. Giesen
  33. 33. Alignment in Partner Selection & Business Model Changes Low Alignment Medium Alignment High Alignment Company D Small BM Change Company E Company A Medium BM Change Company B Company F High BM Change Company C Company G | Daniël J.E. Giesen
  34. 34. Interdependence in Co-creation Structure & Business Model Changes Low Interdependence Medium Interdependence High Interdependence Company D Small BM Change Company E Company B Medium BM Change Company A Company F Company C High BM Change Company G | Daniël J.E. Giesen
  35. 35. Business Model Example: Company A Resources Offer Customer Co-creation Research Institute Intense relationship Ministries of Defense Knowledge exchange Organization’s BU’s (Technology) Net-enabled capabilities Integration effort: Innovative customers Business Above Water Systems Synchronize existing Network-centric System Marketing & Sales (Netherlands, UK) Armed forces field systems / Build simulation (Key Exchange Cell) Department Fast followers Functions knowledge environment Off-the-shelf customers NA (perhaps selling system in a later stadium Development costs PROFIT to fast following and off-the-shelf customers Financial Performance | Daniël J.E. Giesen

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