Chapter | Business Network Transformation: Strategies to Reconfigure Your Business Relationships for Competitive Advantage | 2009

Creating Superior Customer Value in a Connected World

by Ranjay Gulati


"In the early twenty-first century, customers are more demanding than ever, and difficult economic times make them all the more so. As customers tighten their wallets and increase their demands, firms face greater pressure to provide superior customer value. Reducing costs, improving efficiency, and even creating more compelling goods may not be enough to satisfy customers anymore, not if what the customers ultimately want is to design the firm's offerings themselves. What is a firm to do when customers will not be satisfied easily? The answer is, in a word, collaboration—with suppliers, partners, and customers in creating and delivering value—on a scale not seen before in the annals of business. Nearly every aspect of business—from product design to the idea of value itself—stands to be transformed by twenty-first-century collaboration, made possible by twenty-first-century information technologies. Advances in connectivity are fueling a revolution in collaboration, and enhanced collaboration is opening up new opportunities to create superior customer value. In a connected world, the processes by which value is created, delivered, shared, and communicated are being transformed. We are seeing the evolution of collaborative business processes, where firms work closely with partners and suppliers to design, make, and sell their offerings. We are also seeing the rise of collaborative business networks, where traditional value chains are being dismantled and reassembled as business networks where firms leverage the capabilities and resources of a network of partners to reduce costs and to create innovative value propositions. The emergence of collaborative value exchanges, collaborative business processes, and collaborative business networks is a defining theme in the evolution of business enterprises in the new century. Enterprises of the future will need to collaborate in all three ways in order to compete and win customers. In this chapter we explore the new possibilities that digital networks create for firms as they seek to collaborate with customers. Next, we focus on the role that digital media play in transforming the way customers and firms collaborate to create value. We show how these collaborative value exchanges can also extend to the firm's partners. By taking the collaboration concept to the ecosystem level, we suggest that firms can greatly enhance their business processes and value propositions by creating collaborative business networks. We then highlight the important role of enterprise technologies as enablers of collaborative business processes and collaborative business networks. We conclude by identifying key strategy implications for firms as they seek to evolve their offerings, business processes, and ecosystems in a connected world."

Keywords: Customer Satisfaction; Customer Value and Value Chain; Consumer Behavior; Product Design; Social and Collaborative Networks; Value Creation;


Gulati, Ranjay. "Creating Superior Customer Value in a Connected World." In Business Network Transformation: Strategies to Reconfigure Your Business Relationships for Competitive Advantage, edited by Jeffrey Word. Jossey-Bass, 2009.