- Hardcover: 272 pages
- Publisher: Harvard Business Review Press (February 18, 2004)
- Language: English
- ISBN-10: 1578519535
- ISBN-13: 978-1578519538
- Product Dimensions: 6.6 x 1 x 9.5 inches
- Shipping Weight: 11.2 ounces (View shipping rates and policies)
- Average Customer Review: 3.3 out of 5 stars See all reviews (27 customer reviews)
- Amazon Best Sellers Rank: #325,963 in Books (See Top 100 in Books)
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The Future of Competition: Co-Creating Unique Value With Customers
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From Publishers Weekly
According to this turgid volume of business metaphysics, dwindling profit margins caused by intensified competition, a glut of commodity production and knowledgeable, web-empowered consumers will usher in "a new industrial system" characterized by "co-creating value through personalized experiences unique to the individual consumer." Under the new regime, headstrong consumers will "seek to exercise their influence in every part of the business system," and companies will accommodate them by, for example, allowing them to design their own individualized cosmetics and houseboats (an innovation whose benefits include "emotional bonding with... the company" and "a greater degree of self-esteem"). Rather than simply selling their products and services, companies will design "experience environments" that comfort the consumer in any contingency, such as General Motors' On-Star satellite communications system, which can summon help after an accident, open the car doors if the driver is locked out and direct motorists to the nearest Italian restaurant. Beneath the avant-garde terminology, the book mostly boils down to a medley of strategies to make business more consumer-friendly, like flexible pricing schemes, electronic gadgets that are easy to use instead of baffling, options and add-ons, meticulous market research and lavish customer service and support. But business professors Ramaswamy and Prahalad, coauthor of Competing for the Future, inflate this rather familiar "customer-is-king" approach to a level of abstraction and mystification-the health-care industry, for instance, is actually "a complex, evolving wellness space"-that is needlessly opaque and portentous. Managers who thought their job was to make or do something that people might want to buy will be scratching their heads over this book.
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"...an excellent new book." -- Fortune, January 2004
"...an important book, full of disruptive ideas." -- BusinessWeek, March 1, 2004
"Intriguing." -- Detroit Free Press, 27 January 2004
"The book's many examples cast a convincing spell that co-creation is the wave of the future." -- The Globe and Mail, April 14, 2004
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Top Customer Reviews
The idea of co-creation can be directly related to the concept of customer relationship management (CRM) from the book, "Managing Customer Relationships" by Don Peppers and Martha Rogers. Peppers and Rogers state that CRM is a set of business practices designed to put an enterprise into closer touch with its customers in order to learn more about them and deliver the best value to each of them (2007). Similarly, "The Future of Competition" states that value is co-created when companies and consumers interact (Prahalad et al, 2004). This interaction creates a mutual relationship, allowing the company to incorporate consumer insights into their products and services. The authors of both books clearly recognize the importance of building consumer relationships in order to keep up with the rapid changing marketplace.
Further analysis of the book revealed that the theory of co-creation is not unique to a specific product, but to the entire consumer experience. Specifically, Prahalad and Ramaswamy look towards experiences in innovation of products, in the personalization of products and services and through networks where companies create multiple points of interaction with their consumers throughout multiple stages of a product lifecycle. Maintaining relationships throughout multiple points of interaction, or linkage, helps create value and often yields a loyal consumer over time (Prahalad et al, 2004).
Overall this book does a nice job of comparing the traditional role of the company versus the new idea of co-creation with the consumer. While many of the examples given in the book appear to be outdated (ex. Napster, John Deere), they provide a baseline for what is happening in the industry today and help you identify some more current examples of the theories provided.
One of the best examples of co-creation and the value that it creates is the new 2-D barcode system. 2-D barcodes interact with smart phones, enabling consumers to access data about any given product wherever they are. This new technology creates value to that consumer who can easily research and gather data about any specific product in order to make an informed decision before purchasing. In addition, retailers are finding the value in these systems because allowing consumers the ability to research an item and even shop the competition while maintaining in their store creates a trusting relationship between the consumer and company, ultimately leading to a loyal customer over time.
While I found the book a bit difficult to get through due to the particular writing style of these authors, the concepts are relevant to today's evolving marketplace and provide some good baseline, especially for someone who does not have a marketing or business background. Overall the message is clear. Consumers will be heard and if the companies that sell to them want to succeed, they will listen.
The authors do a fairly good job with their use of examples and theory to support their arguments that the marketplace is changing to a customer focused from a company focused arena. I appreciate the use of numerous companies in their examples from Palm to international and lesser known medical companies. Additionally, the DART explanation that the authors used to explain the co-creation of value was an easy to understand model that was simple to understand and comprehend throughout the book as the authors put additional levels onto it.
However, even with all of the supportive examples that were used, specific reference to specific tools and products to harness the information about the changing consumer and their experience were not sufficiently mentioned. The usage of tools such as Analytics, Data Mining or Myspace that are utilized to understand and perfect the co-value experience were not included and this was a field that was growing in popularity during 2004. If he were able to identify those trends during the writing of this book I would be more impressed. This is all not to say that the mentioning of process improvements such as Six Sigma were not strong evidence of his theories, but they could have mentioned more of the possibilities.
Furthermore, the author tended to mention a change in the in the marketplace but these were things that companies may have already been aware of then. If I ask the question of whether or not he contributed something new to the world of customer value? I would answer that maybe in 2004, but as for now, the book is slightly out of date and the information is already understood by the general business world.
Most Recent Customer Reviews
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