ITS business and revenue models Chapter | 10 123of business models, and relationships among diverse stakeholders invested in
networked value co-production. Theoretically, this concept holds potential be-
cause it is grounded in realistic behavioral assumptions (imperfect information,
finite cognitive abilities, importance of externalities, and multiple sources of
competitive advantage) and combines supply and demand side consideration
of cocreating and capturing value. Third, business model is a vital concept that
helps in understanding how and why a broad set of individual or collective ac-
tors succeed in sustainably creating, capturing, and disseminating value (Casa-
desus-Masanell & Ricart, 2011).
10.9 Value creation
Value creation is created by the customer and it is supported by specific interac-
tions in the customer/provider relationship. According to Normann and Ramirez
(1993), the goal of a provider is not to make or do something of value for the
customer; it is to mobilize customers to create use-value. This view was further
articulated in the sixth foundational premise of Vargo & Lusch (2008) which
argues that “the customer is always a co-creator of value.” There is no value un-
til an offering is used—that is, experience and perception are essential to value
determination (Storbacka et al., 2012).
Gronroos (2000) argued that firms exist in order to support customers in
their value-creating processes but not to distribute value along a value chain.
According to (Korkman, Storbacka, & Harald (2010), firms need to be viewed
as extensions of customers’ value creating processes but not as extensions of
firms’ production processes. This paradigm shift allows enhanced opportuni-
ties for actors to engage in a wide range of cocreative practices (e.g., Kork-
man, 2006) that lead to improved co-creation of use-value. Vargo and Lusch
(2008) argue that use-value is created as actors-integrate resources in practices.
They argue that all economic and social actors are resource integrators, that is,
value is created as actors integrate sociocultural resources from market-facing
and public-facing entities.
10.10 Cocreation
According to Perks, Gruber and Edvardsson (2012)—“Cocreation involves the
joint creation of value by the firm and its network of various entities (such as
customers, suppliers, and distributors) known as actors. Innovations are thus the
outcomes of behaviors and interactions between individuals and organizations”
(p. 935).
Co-creation offers many advantages for companies wishing to improve their
innovation capabilities from various perspectives. First, cocreation from a cus-
tomer’s perspective, by interaction with a firm allows cocreation of their con-
sumption experiences (O’Cass & Ngo, 2011), enhance customers’ brand experi-
ences (Nysveen, Pedersen & Skard, 2012) and strengthen valued relationships