• Why joint value creation is needed for an organization?
The purpose of a business is to serve value to its customers, employees and owners and hence gain success by doing so. Collaboration is critical for today’s consumer products distributors, retailers and suppliers. Companies with well-defined value creation strategies processes and policies are co-developing innovative business models and plans that are creating extraordinary growth and competitive advantage. For example – The Partnering Group was founded on the mission of serving clients seeking superior consumer value through collaborative planning. As a result, TPG is the most commonly endorsed consultancy, among leading consumer products companies and associations, for their best practices in joint value creation. TPG continues to develop innovative techniques and methods that will harness the power and resources of the retail-supplier relationship.
• New evolving processes for joint value creation
- Create Value: Identify & agree on the value
Leverage each other’s Capabilities
Drive Joint Business plans co-owned by top customer management and company.
Respect each party’s competencies and ability to deliver.
Make use of all available supply and demand capabilities.
Execute with excellence in-store and in the system.
- Capture Value: Quantify the value systematically
Put in place a joint scorecard with common goals and objectives co-owned with the retailer.
Quantify both the supply and demand value against the retailer’s financial measures and shopper metrics.
Reinforce the benefits of a long-term creation strategy.
- Commercialize Value: Sell and manage the value exchange
Establish the right process for value reinvestment behind key business drivers.
Understand how all the parts fit together.
Provide the necessary enablers to ensure mutual benefit.
• What is joint value creation and how is an organization benefitted from it?
It’s an exchange of capabilities and assets between two companies where both achieve what neither could do on its own. It focuses on growing or creating new value together, not capturing larger share of fixed value.
- Better products based on customer desires – Every aim to invest in co-creation is to make something new. The consumer’s demand is always top priority as per which the products are made. Bringing new product in the market reflects the way customers think.
- Better financial performance – Customer co-creation helps to bring your community closer to the business and builds stronger ties with fans and buyers which in turn improves the financial performance.
- New and unexpected ideas – One of the goals is to keep creating new and exciting goods to bring into the market so that customers are encouraged to buy that company’s products. Co-creation brings new voices and ideas into the fold.
- Making the consumer part of the creation process – The whole point of creating something new is for the consumer because the consumer by way of demand and purchase decides whether the product or service will survive in the market or not. The process is also a key way to increase customer loyalty. A user who sees their ideas taken seriously and even pursued through to development is now part of the decision-making force.
- Removing barriers between industries – Working with co-creators brings brand new skills into the company. You may not even realize how a supply chain expert or mechanical engineer could help you design the next great handbag, tea bag, or sleeping bag. The beauty is, you have access to these skills with no risk. And if their ideas are no good, you simply move on to the next one.
• Conclusion
- Joint value creation in future will be based oneconomies of creativity: mass customization and the high value of bringing a new product or service improvement to market; the ability to find a solution to a vexing customer problem; or, the way a new product or service is sold and delivered.