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|| Co-Creation of Value – Towards an Expanded Paradigm of Value Creation Towards an Expanded Paradigm of Value Creation ||
Co-Creation of Value – Towards an
Expanded Paradigm of Value Creation
Co-creation is the process by which products, services, and experiences are developed jointly by
companies and their stakeholders, opening up a whole new world of value. Firms must stop thinking of
individuals as mere passive recipients of value, to whom they have traditionally delivered goods, services,
and experiences. Instead, firms must seek to engage people as active co-creators of value everywhere
in the system.
VENKAT RAMASWAMY
n the late 1990s, C. K. Prahalad and I began discussing the impor- Beyond Activities to Interactions
I tance of co-opting customer competence when developing new Consider Nike whose Nike+ “experience” kit consists of a wireless
products and services, and even experiences. In a Harvard Busi- device that transmits speed and distance information from a sensor-
ness Review article in 2000, we noted that, thanks largely to the equipped Nike running shoe to an iPod Touch or special wrist-
Internet, the active, engaged customer was dramatically transform- band. Then, through a website () runners can track
ing the industrial system as we know it. We went on to emphasize their progress, set personal goals and challenge friends to races.
how companies had to learn to “co-create” value with customers. With over 1 million runners and over 130 million miles uploaded
In 2004, C. K. Prahalad and I wrote a book defining the implica- as of June 2009, Nike+ has been a runaway success. For Nike, its
tions of the shift in modern society towards the centrality of indi- market share has increased by as much as ten
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