Presentation slides of conference paper: Mapping Multidimensional Value(s) for Co-Creation Networks in a Circular Economy
The transition towards circular economy cannot be achieved if
individual agents advance their own interests independently. Companies need to build new collaborative networks for value co-creation. Therefore, identification of what kind of value will be created or destroyed for different partners in the networks is critical. In this presentation, we propose a framework for
mapping multidimensional value in co-creation networks by combining three streams of literature: (1) Circular Economy, (2) Co-Creation and Collaborative networks, (3) Sustainable value creation. The specific contribution of the framework is that it recognizes that the value created in different parts of networks is linked, and the change of value in one link influences others. Moreover, the approach of the paper adds the dimension of circularity into
analyses of value creation.
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Mapping Multidimensional Value(s) for Co-Creation Networks in a Circular Economy
1. VTT TECHNICAL RESEARCH CENTRE OF FINLAND LTD
Mapping Multidimensional Value(s)
for Co-Creation Networks in a
Circular Economy
Outi Kettunen, Katri Valkokari and Anna Aminoff
VTT Technical Research Center of Finland
2. 216/08/2017 2
Content
Circular economy and this research
Background literature
Our framework for mapping value in a CE
Case illustration
Conclusions and next steps
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Circular economy in a nutshell
A circular economy is an industrial system that is restorative or
regenerative by intention and design (EMF, 2013; Lieder and
Rashid 2016)
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Circular economy and co-creation networks
The transition towards a CE cannot be achieved if individual
organizations advance their own interests independently…
…Companies need to build new collaborative
networks for value co-creation…
…Identification of what kind of value will be
created or destroyed for different partners
in the networks, aiming to create win-win-win
business models, is critical
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Our contribution
In this study we propose a systematic approach for identifying
multidimensional value in co-creation networks
We combine streams of literature on three topics 1) Circular
Economy 2) Co-Creation and Collaborative networks 3) Sustainable
value creation
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Research questions and aims
Research questions:
1. How can multidimensional value(s)
be identified for the actors’ co-
creation networks?
2. How are the multidimensional
values linked together from the
viewpoint of different actors?
The aim of the framework
developed in this study is to
Provide rich data for the research to
develop an understanding of value
creation in a CE
Guide managers to recognize the
implications of novel CE business
models for different actors in a co-
creation network.
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1/3 Circular economy
Recently CE discourse has started to emphazise the economic aspect, seeing CE
business models as enablers to create a competitive advantage.
The CE sets new expectations on business network actors.
The future business models will be radically different
These will affect the roles of actors as well as value distribution
The transformation towards a CE sets challenges especially for established
companies
Previous literature has presented several approaches to CE business models,
including
6R methodology: reduce, reuse, recycle, recover, redesign and remanufacture
EMF includes in the value circle 5 activities: share, maintain/prolong, reuse/redistribute,
refurbish/remanufacture and recycle
These and other approaches require collaboration and integration across businesses in the
product life-cycle stages
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2/3 Sustainable Value Creation and Value Creation in a CE
Sustainable value creation and value creation in a CE are closely linked,
but as the latter is still in its incancy, we base our framework mainly on the
former one
Sustainable value creation recognizes three bottom lines: economic,
environmental and social aspects
Bocken et al. recognize four different forms of value that enchance the
balance between the self-interests of involved actors and facilitate
collaboratively shaping the value for different stakeholders. The forms are:
value captured value missed value destroyed new value opportunities.
CE emphasizes the multidimensional aspects of value creation, as
achieving only economic benefits doesn’t guarantee the business to be
restorative and regenerative.
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3/3 Co-creation and Collaboration Networks
A concept of A Green Virtual Enterprise Breeding
Environment (GVBE)
Is defined as a long term strategic alliance of green
enterprises
Several tools and methods development to assist the
interaction
More studies focusing especially on dynamics of
collaborative co-creation networks are needed
In a CE, value is not created in a firm in isolation, but
firms and their stakeholders acting together. There
are often game changing changes in business
models and the considerations of value for the broad
range of new network actors and stakeholders
become vital.
In this study
We define CE co-creation network as a dynamic
network including both the actors of the core business
value network and other relevant stakeholders
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Distributor
”End” user
End of life
cycle
service
provider
Material
supplier
Innovator
R&D partner
Technology
provider
Producer
STAKEHOLDERS
CORE BUSINESS
VALUE
NETWORK
Society
Environment
Share
Recycle
Reuse /
redistribute
Maintain /
Prolong
• Intangible (Knowledge/Value)
flows
• Tangible (Material/Monetary) flows
Re-service
provider
Refurbish /
Remanufacture
The actors and their relationships in the layered CE co-creation network
13. 13
DEFINING THE PRELIMINARY VALUE PROPOSITION OF THE NETWORK
Other actors Potential value sources and value for core actors Possible missed or destroyed value
1
IDENTIFICATION OF ACTORS OF THE (PROSPECTIVE) NETWORK AND ITS VIEW
Innovators:
Raw-material suppliers:
Producer:
Distributor:
End users:
Others
What enhances?
What hinders?
2
VALUE HUNTING
Company A
Potential value sources and
value for core actors
Possible missed or destroyed
value
What enhances? What hinders?
3
The Preliminary Framework and the 3 steps
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Research design
Case Company Tentative business model of a
network
Workshop
participants
Case A Company 1:
SME
Profitable processing of mixed
construction site waste into
secondary raw material.
Managing Director
Head of production
Head of R&D
Quality manager
Case B Company 1: High-quality sorting including
data bank, collection equipment
and methods, and logistics
centers close to the waste source.
Managing Director
Head of production
Head of R&D
Quality manager
Case C Company 2:
Startup, social enterprise
Service provider,
digitalization
Digitalized concept, which
enables recycling centers to
digitalize the process, and add
value-added services.
CEO (owner)
Chairman of the
board, Investors (2)
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Testing the framework
We tested the preliminary framework in three cases.
The testing was performed in three-hour
workshops.
In the workshops the participants
1. Defined their value proposition of the networked
business model
2. Identified the actors in their future network
3. Continued, based on the first two steps, with value
hunting concerning the key players in the network.
The steps were documented in a table presented
earlier.
Key findings of the test workshops gave us
information on its advantages, development needs
and also of companies’ general challenges in
picturing the prospective networks and its value
creation.
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Experiences of the companies of using the framework
The framework was seen beneficial
in helping the focal company to perceive the perspectives of other actors in the network.
for identifying value in a co-creation network in the CE.
Why was it beneficial?
it inspires to start to picture and identify the whole co-creation network when planning new
CE business models.
it supports the need to involve several partners in value creation in the CE and guides into
seeking and establishing collaboration with the co-creation network partners.
It seems to guide the mind to seeing the viewpoint of other actors in the network.
Other observations
The companies were interested mainly in their closest partners, who are often also their
everyday contacts.
Companies seemed to focus on partners who relate to the material flow, and not as much
to partners who take part in, e.g., R&D or other expertise.
The outermost circle is not very interesting to the companies, depending, however, on the
business field – e.g. regulators might be important.
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Development needs for the framework
Better guidance to recognize who
actually is the “final” user. In two of our
cases, the actual final user was not listed as a
stakeholder.
More precise snapshots from certain
parts of the value circle to better map the
key partners, and consequently to be
able to concentrate on the right actors in
the value-hunting step.
Developing the list of actors in the
circular economy co-creation network.
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Case company 1: “Profitable processing of mixed
construction site waste into secondary raw material.”
The case company is originally a waste
management company, but now also produces
ecological paving stones out of recycled wood.
It plans to develop various secondary raw
materials for other manufacturers.
The company has now developed and tested the
paving stones, and is aiming to increase their
sales by establishing profitable new business
models related to the stones.
It is looking for new business opportunities for the
whole network: sorting the waste also at the origin,
processing the waste further into raw materials,
and developing, producing and selling the
products out of the processed waste.
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Roles of Company 1 in its core-business network in Case A
Innovator:
Company
1
Construction
site
Waste
management
transportation
company
Waste
recovery and
processing
(Company 1)
Raw material
producer
(Company 1)
Goods
manufacturer
of secondary
raw materials
21. 21
DEFINING THE PRELIMINARY VALUE PROPOSITION OF THE NETWORK:
Profitable processing of mixed construction site waste into raw material
Other actors Potential value sources and value for core actors Possible missed or destroyed value
Society as a whole Raw material and energy self-sufficiency
Raw material supplier Raw material quality and efficient material procurement
Efficient processes
Need for warehousing permices of non-separeted
waste diminishes
End user (Company A’s customer) Increased quality of raw material
Extensive delivery network Increased business opportunities
Machine and equipment suppliers Separation equipment
IT providers
Energy production plants and waste Waste as a fuel for energy plants diminishes
1
IDENTIFICATION OF ACTORS OF THE (PROSPECTIVE) NETWORK AND ITS VIEW
Innovators: Universities, own expertise
Raw-material suppliers: Construction and transportation companies
Producer: Company A
Distributor: Future wholesaler/distributor of renewable materials. Raw
material stock for secondary raw materials.
End users: Producers of secondary raw materials products. Manufacturers
of goods from secondary raw materials. Energy plants.
Others Energy plants, waste processing plants
What enhances?
• Changes in the values of people and companies
• Regulation
• Technological advancements
• Waste reception costs
What hinders?
• Increasing amount of plants burning waste
2
VALUE HUNTING
Company A
Potential value sources and
value for core actors
Possible missed or destroyed
value
What enhances?
• Regulation Traceability of
materials Technologies
Competition and competitors
Awareness of consumers
Owners and the strategies of the
company Awareness of new
possibilities
What hinders?
• Dirty and mixed waste Our own
limited thoughts Competition of
the construction waste Analysis
costs of materials Expensive
treatment processes and
equipment Increase in the
waste burning cacpacity
• Streghtening the upstream and
downstream business chain
• Business expansion to new
markets
• The value decreases since most of
the material is burned or directed
to the competitors for treatment
• Obsolence increases over time
• Transportation costs
3
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Conclusions
General
conclusions
Our framework
recognizes that the
value created in
different parts of a
network is linked
The change in benefits
and costs in one link
influences others.
The approach adds the
dimension of circularity
into value creation and
capture.
For
practitioners, the
framework…
Was seen valuable
Adds understanding of
the implication towards
the co-creation network
as a whole.
May guide the
companies in
developing circular
business and achieving
win-win-win models
For research,
the framework
may enable..
To further analyze and
categorize what kind of
value is created in a CE
and advance research
of CE business models
To form archetypes of
co-creation networks in
different kinds of
business models.
Data collection for
missed value today and
major value creation
opportunities in a CE.
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Next steps
Identified key players of the
network will be motivated for
actual collaboration, in order to
address the possibilities,
challenges and value issues
together at network level.
Further research on co-creation
of business models in networks.