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For more than 100 years, a company-centric, efficiency-driven view of value creation has shaped our industrial infrastructure and the entire business system. Although this perspective often conflicts with what consumers value - the quality of their experiences with goods and services - companies see value creation as a process of cost-effectively producing goods and services. Now information and c... More

For more than 100 years, a company-centric, efficiency-driven view of value creation has shaped our industrial infrastructure and the entire business system. Although this perspective often conflicts with what consumers value - the quality of their experiences with goods and services - companies see value creation as a process of cost-effectively producing goods and services. Now information and communications technology, the Internet in particular, is forcing companies to think differently about value creation and to be more responsive to consumer experiences. In fact, the balance of power in value creation is tipping in favor of consumers. How do companies co-create valuable experiences with consumers? The traditional company-centric view says: (1) the consumer is outside the domain of the value chain; (2) the enterprise controls where, when, and how value is added in the value chain; (3) value is created in a series of activities controlled by the enterprise before the point of purchase; (4) there is a single point of exchange where value is extracted from the customer for the enterprise. The consumer-centric view says: (1) the consumer is an integral part of the system for value creation; (2) the consumer can influence where, when, and how value is generated; (3) the consumer need not respect industry boundaries in the search for value; (4) the consumer can compete with companies for value extraction; (5) there are multiple points of exchange where the consumer and the company can co-create value.

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