The Future of Competition

Abstract

THE SUMMARY IN BRIEF In a world of infinite choice, instant gratification, and unbounded opportunities for innovation, why, ask University of Michigan Business School professors C.K. Prahalad and Venkat Ramaswamy, are companies still unable to satisfy customers or sustain growth and profitability? The answer lies in the evolving role of the customer — from passive recipient to active co-creator — in the value creation process. No longer do customers receive value through the purchase of products and services alone. Instead, individual customers are interacting with a network of firms and consumer communities in order to satisfy their unique preferences — and the value they obtain comes from the sum total of those personal experiences. To compete in this developing marketplace, companies must fundamentally alter their value creation infrastructures. They make information and operations transparent and accessible to all collaborators, and transform their interactions with customers from transactions to meaningful dialogues. For their part, customers must be able to understand and assess all the risks, as well as the rewards, of the choices they make. Exploring the issues that will shape strategy for years to come, the authors reveal what organizations must do to co-create value in the future. Concentrated KnowledgeTM for the Busy Executive • www.summary.com Vol. 26, No. 3 (3 parts) Part 1, March 2004 • Order # 26-06