Service systems for value co-creation

Over the last few decades there has been growing interest from both marketing researchers and practitioners in the creation of value (Eggert & Ulaga, 2002). In a series of publications on the Service-Dominant Logic (S-D Logic), Vargo and Lusch (2004: 2008) review the economic foundations that underpin how value creation is understood. In doing so, they put forward a number of propositions, which have had a significant impact on current management theory and practice. The central tenant of value creation under an S-D Logic is that value is always uniquely and phenomenologically determined by the customer. Therefore first, the enterprise cannot deliver value but only offer value propositions, and second, the customer is always a co-creator of value and therefore a customer’s value-creating processes and resources affect the success of a company’s value proposition. Given this orientation, and since the context of value creation is not within the firm’s control, managing the customer as a co-creator of value-in-use would present itself as a major challenge in designing and managing service systems. This chapter investigates the challenges of a service system for co-creation through a review and comparative analysis of three widely published cases considered to be service systems for co created outcomes. As a result, six challenges of a service system for co creation are summarised; the determination challenge; the measurement challenge; the revenue challenge; the context challenge; the resource challenge; and the skills challenge.