Conceiving and Marketing Products in the Networking Age
Chapter 2: The Promise of Collaborative Innovation
2.1 INTRODUCTION In an increasingly dynamic business environment, ﬁrms are realizing the importance of collaboration for creating and sustaining competitive advantage. Collaboration with partners and even competitors has become a strategic imperative for ﬁrms in the networked world of business (Brandenburger and Nalebuﬀ, 1996; Gulati et al., 2000; Iansiti and Levien, 2004). In recent years, scholars in strategy and marketing have paid considerable attention to collaboration with customers to co-create value (Thomke and von Hippel, 2002; Prahalad and Ramaswamy, 2004). Nurturing relationships with customers is a priority for most organizations (for example, Day, 2000) at a time when customer intimacy, customer equity and customer relationship management are considered the current marketing mantras (Bhattacharya and Sen, 2003) and relationship marketing is seen as the key to building customer loyalty (for example, Garbarino and Johnson, 1999). While collaboration with customers can span several business processes, one of the most important is collaborating to co-create new oﬀerings. In this chapter, we propose that virtual environments play a key role in enhancing co-creation with customers by presenting low-cost opportunities for customers to interact with ﬁrms. The unique capabilities of the Internet are allowing leading ﬁrms to directly involve customers in their new product development (NPD) activities, a phenomenon we call ‘collaborative innovation’. Customer interaction has always been important in NPD in order to improve the ﬁt between the ﬁrm’s oﬀerings and customer needs (von Hippel, 1988). In Section 2.2, we provide an overview of the academic literature related to customer knowledge and...
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