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1. Introduction
In the emerging economy, the traditional value creation strategy for innovative product development is losing its effectiveness. Companies which follow the conventional company-centric practices face troubles in terms of a decreased customer satisfaction and profitability. Thus, the companies are now more focusing on leveraging the external resources such as customers, rather than internal efficiency, to gain new competitive advantages (Prahalad and Ramaswamy, 2004a; Zhang and Chen, 2008). Such linkage with the external resources brings in the concept of value co-creation which is critical to operationalize this new shift. Prahalad and Ramaswamy (2001) identified the consumer as value co-creator is a new source of competitive advantages. In their conceptual argument, they proposed the DART model that represents dialogue, access, risk assessment and transparency to lessen the conventional information asymmetry between the customers and the firm. The DART model is the key building blocks of the process of value co-creation (Prahalad and Ramaswamy, 2004a). However, customer value co-creation through DART process is an important strategy to facilitate in formulating innovation strategy. While, firms create deep engagement with the consumers through interaction, it is expected that consumer becomes the co-creator of value and thus contributes to the formulation of innovation strategy by companies. In today's competitive world, such innovation strategy increases the scope of greater market performance.
Despite its importance, research on these key building blocks (DART) is largely overlooked. At the same time, it has been found that appropriate construction of the measurements of the DART model has been ignored so far. It is also important to explore to what extent the DART model is practiced by the companies, even though, they believe in value co-creation with consumers. Therefore, the aim of this paper is first to validate scale measurements of DART constructs and then understand its effect on innovation strategy. Second, explore the influence of innovation strategy on the market performance.
To do so, the paper begins by presenting conceptual background and the framework as shown in the Figure 1. The framework presents the DART model as key building blocks of the process of value co-creation together with innovation strategy and market performance.
The following discussion defines the constructs and theoretical propositions (Section 2). In Section 3, the paper describes in details the research...