Value Co-creation Process and Value Orchestration Platform

Abstract

New service businesses such as Amazon, iTunes, and Rakuten have a common characteristic: they act as a platform for orchestrating and facilitating value co-creation by customers and providers. In the value co-creation process, customers and providers interact with each other and co-create new values. The value orchestration platform invites customers and providers to “get on board” and facilitates the process of co-creating value while leaving the control of the process entirely in the hands of providers and sometimes of customers as well.

Such a two-layered service-system model is also applicable for the revitalization of a local community. For example, industrial tourism is a common means to create new values in an area by involving various stakeholders including restaurants, hotels, sightseeing spot managers, and factories. Having a value orchestration platform to facilitate these stakeholders’ value co-creation is definitely needed. However, in contrast to private businesses, there are often no clear “system owners” responsible for the process. This is mainly due to the power structure in the community or the independence of stakeholders.

This chapter models the value co-creation process and value orchestration platform from service science perspective and discusses value orchestration management strategies for business systems. It also discusses the relevance of the model to local revitalization in Japan.

To achieve these purposes, we first examine several major perspectives from which service has been argued so far and clarify our research position in the field of service science. Then, we propose a process model of value co-creation consisting of four phases: co-experience, co-definition, co-elevation, and co-development. Finally, by developing a value orchestration platform model and relating it to the process model, we analyze management strategies for orchestrating value co-creation not only in business but also in community service systems. We also adopt a mathematical approach to the analysis of a network externality problem that inevitably arises when a platform attracts customers and providers.