Consumers today have evolved from being passive participants in business processes; as a target for marketers to becoming an active participant involved in the creation of the product offering itself.

CK Prahlad summed up this phenomenon in his book ‘the Future of Competition’ as “Consumers have more choices that yield less satisfaction, top management has more strategic choices that yield less value. Are we on the cusp of a new industrial system with characteristics different from those we now take for granted?”

Consumers today are driven to use their influence in the entire value chain of the business empowered by information that is readily available and not happy with existing choices. Consumers want to collaborate with firms of their choice and thereby co-create value.

Web 2.0: Bleeding edge of Co-Creation

What is web 2.0? To put it plainly it is a knowledge intensive environment where user generated content is created and managed using service oriented architecture. It started because of the move to the internet as a platform. RSS, Wiki’s, Blogs, Social networking sites like My Space are all examples of Web 2.0.

Web 2.0 has been an effective tool by which organisations have introduced technology into their value chain. As most of the content is consumer created this is a classic example of the bottom-up approach.

The Web 2.0 tools are very user friendly as most of them have been created by much focused, committed consumers and once the business viability of the venture has been tested commercially through pilots have been rapidly assimilated into mainstream business. An example in this regard has been the acquisition of ‘Facebook’ by Microsoft.

Another case in the surprisingly regulated market was the early adoption of the anti- leukemic drug Gleevec developed by Novartis AG through consumer activism using blogs a Web 2.0 technology.

The way Forward

Consumers want to be a part of a new movement, to create products that satisfy their needs rather than being passive targets for firms, who are trying to sell their offerings. This movement has found an unlikely hero Web 2.0.

Dr Vikram Venkateswaran

Senior Business Consultant

Covansys-CSC