Managing and measuring value co-creation in business-to-business relationships

Abstract

Abstract Managing the complex network of cross-functional, cross-firm interactions that lead to value co-creation in business-to-business (B2B) relationships is a challenge. Managers need actionable frameworks to guide them through the implementation of a service-dominant business logic based on cross-functional involvement. The goal for this research was to explore the importance of developing cross-functional, cross-firm teams in B2B relationships, and to explain the mechanisms by which cross-functional involvement enables value co-creation. A dyadic case-study approach and a collaboration framework were used to structure a B2B relationship focused on value co-creation. We measured the financial outcomes achieved by the companies one year after the cross-functional teams were implemented, and we interviewed managers to analyse their experiences with the new way of working. We found that cross-functional involvement was a key driver of financial performance for the two firms involved in the relationship. Value co-creation occurs during three cyclical and interrelated phases through which customers and suppliers interact: (1) joint crafting of value propositions, (2) value actualisation, and (3) value determination. We contribute to the Service-Dominant Logic literature by analysing how value is co-created in B2B relationships.