Department of Marketing

Course Title – Competitive Analysis

Course Code: MKT- 425

Assignment on
Difference between value creation and value co-creation. 10 example of
those companies who follow cocreation.

Submitted to:
Md.Moynul Hasan
Associate Professor
Department of Marketing
Comilla University

Submitted by:
Shahida Binte Rahim
ID No: 11707053
Department of Marketing
Comilla University

Date of Submission – 28-10-2021

Difference between value creation and value co-creation. 10 example of those
companies who follow cocreation.
Value creation
The definition of value creation is giving something valuable to receive something else that's more
valuable to you. This definition is broad and captures both costs and benefits. Further, it applies to
owners, customers, and employees, as I'll describe later.

Value creation is the primary aim of any business entity. Creating value for customers helps sell
products and services, while creating value for shareholders, in the form of increases in stock price,
insures the future availability of investment capital to fund operations. Value creation in today's
companies is increasingly represented in the intangible drivers like innovation, people, ideas, and
brand."

When broadly defined, value creation is increasingly being recognized as a better management
goal than strict financial measures of performance, many of which tend to place cost-cutting that
produces short-term results ahead of investments that enhance long-term competitiveness and
growth. As a result, some experts recommend making value creation the first priority for all
employees and all company decisions.

Although the intangible factors that drive value creation differ by industry, some of the major
categories of intangible assets include technology, innovation, intellectual property, alliances,
management capabilities, employee relations, customer relations, community relations, and brand
value.

Pattern of matter, energy, and/or information has economic value if the following three conditions
are jointly met:

1. Irreversibility: All value-creating economic transformations and transactions are

thermodynamically irreversible.

2. Entropy: All value-creating economic transformations and transactions reduce entropy locally
within the economic system, while increasing entropy globally.

3. Fitness: All value-creating economic transformations and transactions produce artifacts and/or
actions that are fit for human purposes.
The following are illustrative examples of value creation-

Commodities- A farmer uses land, equipment, water, labour, sunlight and seeds to grow onions.
Products- A firm manufactures eye glass frames on a production line.
Services.
Processes.
Machines
Information Technology.
Work.
Knowledge Work.

Value co-creation
Value co-creation generally refers to the mechanisms of interplay and collaboration between
service providers and customers, resulting in experienced value for the parties.

Co-created value arises in the form of personalized experiences for the customer and ongoing
revenue, learning and customer loyalty and word of mouth for the firm. Co-creation also enable
customers to come up with their own idea which might help the firm.

Ramaswamy and his co-author Francis Gouillart wrote: "Through their interactions with thousands
of managers globally who had begun experimenting with co-creation, they discovered that
enterprises were building platforms that engaged not only the firm and its customers but also the
entire network of suppliers, partners, and employees, in a continuous development of new
experiences with individuals."

Value creation Value co-creation

Value creation enterprise Enterprises and consumers
subject
Meaning of value Functional value/exchange Functional value, use value, experience
value value
Carrier of value product Products and services
Market action A place of exchange of The place where the body interacts with
value each other
The academic basis Traditional marketing Service marketing, relationship marketing
10 examples of successful co-creation initiatives

 Unilever
 IKEA
 Sodexo
 DeWalt
 Lego
 DHL
 Anheuser-Busch
 BMW
 General Mills
 Coca-Colaion forces an organization to adopt a long-term perspective and align all of
its resources toward future goals.