Management of Customer Co-development in Business-to-Business Markets

Management of customer co-development means involving customers in the development of new products and services, and coordinating the process. In business-tobusiness markets, customer co-development enables the development of innovations that better match customer needs and strengthens customer relationships. However, close collaboration with customers can hamper the innovativeness of new products and lead to overly customized solutions. Therefore, the management of co-development is crucial to its success. Yet the existing research on management of co-development has mainly focused on selecting the right collaboration partners, and the field lacks understanding on how to manage the tensions inherent in customer co-development. The purpose of this thesis is to increase understanding on the management of the codevelopment. The thesis is divided into two parts. The first comprises the literature review and conclusions for the whole study, and the second presents four publications. From the methodological perspective, the research papers follow exploratory qualitative research design. The empirical data comprise interviews with 60 persons, representing 25 different organizations, and a group of 11 end users. The study conceptualizes management of customer co-development in three dimensions 1) relational co-development processes, 2) co-development challenges and paradoxes, and 3) internal customer involvement processes. The findings contribute to the customersupplier relationship, innovation, and marketing management literatures by providing a framework on supplier-customer co-development, addressing co-development paradoxes and their management processes, and suggesting practices for customer involvement. For practitioners, the findings provide tools to manage the challenges related to codevelopment with customers.

Transformation into Platform - How can an organisation move from a single-sided business to platforms? A case study at Lyyti

The research studies the transformation from a single-sided offering to a multi-sided platform. The study aims to define platforms and their benefits, creating a theoretical framework by applying change management models with the platform theory, and by finding critical change points of the transformation. The empirical research was done by utilizing action research. The researcher worked as project manager in the case company, and studied the transformation project by working actively and leading the project team. The result of the project was a study of how the company would be able to manage the transformation. The results clearly showed that the company didn’t have the capabilities to finish the transformation. As a conclusion, the study showed that the critical change points that led to the project failure were, that the project was managed with insufficient change managerial efforts, which later resulted as lack of commitment to re-allocating the resources to complete the transformation. Many of the critical change points were results of combined change managerial and platform-related issues.

Learning by failure in entrepreneurship - Case study of selling Xylitol to Poland

My thesis aim is to find out what factors that can explain the entrepreneurial failure in my own entrepreneurial venture to sell Finnish xylitol product to Poland. In addition I seek to answer to the question of why Finnish xylitol products are not sold in Poland. This area has not been studied prior to my thesis. The study method is case study. Data collection is based on auto-ethnographic method where field notes and documents generated from my business venture were used. I discovered that Polish consumers are not exposed to consumer education of xylitol health benefits. The underlying potential in xylitol products expansion from Finland to foreign countries is still mostly unleveraged. My business venture failed because I was not able to convince Finnish confectionery companies Fazer and Cloetta to give enough support for my project. Polish dentists were also opposed having a competitor from Finland to Wrighley company which dominates the Polish confectionery markets.

Consumer perceived risk, risk reduction strategies and transaction intentions in online marketplaces

Even though online commerce has garnered vast academic interest during the recent years, theoretical grounds for consumer behavior online still remains ambiguous. Despite the globally rapid growth of online commerce, only a fraction of Internet browsers end up purchasing goods online. This is argued to be caused by the intangible and distant nature of the Internet, causing overwhelming perceived risks for consumers and negatively affecting transaction intentions. To combat perceived risks, consumers may actively or passively seek to relieve those risks to tolerable level. These risk reduction strategies refer to both institutional mechanisms as well as consumer risk reduction strategies. The objective of this thesis is to provide further understanding upon the relationships between consumer perceived risk, risk reduction strategies and transaction intentions in online marketplaces. To serve the objectives of the present thesis, a quantitative approach was chosen as the method for conducting empirical research. The data was collected with an online survey through discussion board, using a random sample approach. The proposed research model was examined with a set of hierarchical regression analyses. Results revealed several direct relationships as well as moderating interaction effects. The key finding of this thesis is that institutional risk reduction mechanisms significantly contribute to consumer perceived risks. These mechanisms have the potential to reduce perceived risks, and therefore may stimulate transaction intentions. Additionally, it was observed that risk reduction strategies moderate the relationship between intermediary provided risk relievers, consumer perceived risks and transaction intentions. Retailer related risk reduction strategies were also shown to enforce the effectiveness of payment methods; however feedback and monitoring mechanism was shown to have a diminishing effect of perceived risk only when consumers did not rely on product related risk reduction strategies. The present thesis also illustrates the importance of effective information search, as those consumers are more willing to transact as the perceived risks become less significant. For managerial purposes, the importance of well-functioning institutional mechanisms cannot be emphasized enough.

Mikroyrityksen ja tilitoimiston välisten prosessien kehittäminen sähköistämisen avulla

Tämä tutkielma käsittelee mikroyrityksen ja tilitoimiston välistä yhteistyötä sekä sen edistämistä sähköistämisen keinoin. Aihetta käsitellään ulkoistamisen näkökulmasta, jolloin taloushallinnon prosessit käsittävät tilitoimiston ja yrityksen välisen tiedonvaihdon ja yhteistyön. Tutkielmassa käsitellään taloushallinnon roolia ja prosesseja sekä taloushallinnon ulkoistamisen teoreettisia lähtökohtia. Tämän jälkeen syvennytään taloushallinnon sähköistämiseen sekä sen etuihin ja haittoihin. Aiheita pyritään käsittelemään sekä yleisellä tasolla että mikroyritysten näkökulmasta. Tutkielman tavoitteena on teorian ja empiirisen tutkimuksen avulla selvittää, millaisia sähköisiä keinoja valitun kohdeyrityksen ja tilitoimiston yhteistyön kehittämiseen on tarjolla ja kuinka nämä keinot edistäisivät osapuolten välistä yhteistyötä. Työssä käytetty tutkimusmenetelmä on kvalitatiivinen ja tutkittavaa ilmiötä on tarkasteltu tapaustutkimuksen keinoin. Tutkimusaineisto kerättiin kohdeyrityksen omistajayrittäjältä keskusteluin sekä kohdeyrityksen käyttämälle tilitoimistolle sähköpostitse lähetetyllä kyselyllä. Tutkielmassa päädyttiin siihen, että sähköisistä menetelmistä on saatu apua esimerkiksi kuittikirjanpidossa. Käytössä olevien sähköisten palveluiden määrää sen sijaan voitaisiin vähentää ainakin poistamalla yksi laskujenhallintaohjelma käytöstä. Tämä edistäisi tositteiden kulkua yritykseltä kirjanpitäjälle ja samalla päästäisiin eroon myös yhdestä käyttöominaisuuksiltaan kehnosta laskujenhallintajärjestelmästä. Toisaalta todettiin, että ydinongelmat eivät loppujen lopuksi liity heikkoon teknologiaan vaan ihmisten välisiin suhteisiin eivätkä nämä ongelmat ole ratkaistavissa teknologian keinoin.

Digital rights management –systeemit ja kuluttajien suhtautuminen niihin peliteollisuudessa

Tämän kandidaatintutkimuksen tarkoituksena on löytää vastaus siihen, miten vahva voi olla DRM-systeemi, ennen kuin kuluttajat eivät enää hyväksy sitä. DRM-systeemejä on monen tasoisia, mutta ne eivät ole soveltuvia sellaisenaan kaikille eri alustoille. Peliteollisuuden digitaalisten käyttöoikeuksien hallintajärjestelmillä on omanlaisensa lainalaisuudet kuin esimerkiksi musiikkiteollisuudella. Lisäksi on olemassa tietty tämän hetkinen hyväksytty DRM:n taso, josta voi olla vaarallista poiketa. Tutkimus on luonteeltaan laadullinen tutkimus. Työssä on sovellettu sekä diskurssi- että sisällönanalyysin oppeja. Tutkimuksen aineistona on erilaisten viestiketjujen tekstit, joiden pohjalta pyritään löytämään vastaus tutkimuskysymykseen. Ketjut on jaettu eri vahvuisiksi sen perusteella, miten vahva on DRM:ää koskeva uutinen, jonka pohjalta viestiketju on syntynyt. Koska aineisto on puhuttua kieltä ja sillä on aina oma merkityksensä kontekstissaan, ovat valitut menetelmät soveltuvia analysoimaan aineistoa. Eri ketjujen analyysien tuloksien pohjalta voidaan sanoa, että DRM ei voi olla sitä tasoa suurempi kuin mikä on sen hetkinen vallitseva taso. Jos tästä tasosta poiketaan pikkaisenkin, voi se aiheuttaa suurta närästystä kuluttajien keskuudessa, jopa siihen saakka, että yritys menettää tuloja. Sen hetkiseen tasoon on päästy erinäisten kokeilujen kautta, joista kuluttajat ovat kärsineet, joten he eivät suosiolla hyväksy yhtään sen suurempaa tasoa kuin mikä vallitsee sillä hetkellä. Jos yritys näkee, että tasoa on pakko tiukentaa, täytyy tiukennus tehdä pikkuhiljaa ja naamioida se lisäominaisuuksilla. Kuluttajat ovat tietoisia omista oikeuksistaan, eivätkä he helpolla halua luopua niistä yhtään sen enempää kuin on tarpeellista.

Effects of subsidizing the first employee – Empirical evidence from Finland

Small businesses form a significant share of all businesses and employ a large share of all employees. Therefore, governments are often interested in subsidizing them and especially employment in smaller firms. Nonemployer firms have received special interest, especially in Finland, due to their large share of all businesses. It has been argued that the government should encourage them to hire by subsidizing employment. However, there is no evidence on the effectiveness of such policies. In general, there is surprisingly little evidence on how small firms react to employment subsidies or of employment subsidies targeted according to firm characteristics. The subject of this thesis is the effects of subsidizing the first employee. While theoretical background suggests the subsidy might have efficiency gains, because there might be market inefficiencies that lead to too little employment in small firms. The focus of this research, however, is on the empirical evidence. There was a regional subsidy for hiring the first employee in Finland between 2007 and 2011. Nonemployer firms in the subsidy area were eligible for a wage subsidy for two years when they hired the first employee. The design of the subsidy enables studying the effects in a natural experiment framework that are nowadays popular in public economics. It can be shown that the area without the subsidy provides a good counterfactual to the area where the subsidy was available. Therefore, the effects of the subsidy can be estimated with difference-in-differences method. This method compares the change in the subsidy area to the change in the area without the subsidy. The data used is firm level data spanning from 2000 to 2013. The data is provided by the Finnish Tax Administration including tax declarations by all Finland based companies. The effects for hiring decisions are estimated by examining the effects for alternative variables such as employment, wage expenditure and turnover. According to the results, the subsidy did not have statistically significant effect on any of the variables of interest. Therefore, it can be concluded that the subsidy did not increase hires in nonemployer firms. This implies that the labour demand elasticity of nonemployer firms is very small. The results are in line with previous literature on the effectiveness of general employment subsidies in Scandinavia that suggest that labour demand elasticity is rather small resulting in small or no effects of employment subsidies. However, my research provides new evidence on labour demand of nonemployer firms especially that has not been studied before. The results are in line with the observation that most nonemployer firms are self-employed persons who are not interested in growing their business to employ others as well, but only provide for themselves. Because of this employment subsidies to the self-employed are not particularly well targeted. The theoretical grounds for the subsidy actually hold for other small firms as well, so it can be argued the subsidy would be more effective if it was extended for hiring the first few employees.

Selling customer value in B2B markets - Case KONE JumpLift

Skepticism of promised value-added is forcing suppliers to provide tangible evidence of the value they can deliver for the customers in industrial markets. Despite this, quantifying customer benefits is being thought as one of the most difficult part in business-to-business selling. The objective of this research is to identify the desired and perceived customer benefits of KONE JumpLift™ and improve the overall customer value quantification and selling process of the solution. The study was conducted with a qualitative case analysis including 7 interviews with key stakeholders from three different market areas. The market areas were chosen based on where the offering has been utilized and the research was conducted by five telephone and two email interviews. The main desired and perceived benefits include many different values for example economical, functional, symbolic and epistemic value but they vary on studied market areas. The most important result of the research was finding the biggest challenges of selling the offering which are communicating and proving the potential value to the customers. In addition, the sales arguments have different relative importance in studied market areas which create challenges for salespeople to sell the offering effectively. In managerial level this means need for investing into a new sales tool and training the salespeople.

Customer involvement in new service development

This case study aims at filling the research gap in the literature, by researching how customers experience customer involvement in new service development, in addition to giving insight on what are the organisational customers’ motivations to become involved in service development. These subjects are studied by conducting three interviews. The thesis gives a review of previous findings regarding customer-driven new service development, customer involvement, customer roles, modes of involvement, communication in the involvement process, what is the role of customer engagement and what are the motivational drivers for customers. The thesis also explains what new service development is and makes a distinction between new service development and new service design. The results revealed that organisational customers want to be involved throughout the development process, with active involvement in the beginning and end phases. Moreover, customers prefer face-to-face methods and active and bidirectional communication throughout the process. The findings propose seven motivational factors, a new framework for customer-driven new service development and communication process map. The managerial implications list five themes for service providers to take into consideration when involving customers to the service development process.

Collecting valuable consumer data: Motivating consumers to disclose personal information

Collecting and analyzing consumer data is essential in today’s data-driven business environment. However, consumers are becoming more aware of the value of the information they can provide to companies, thereby being more reluctant to share it for free. Therefore, companies need to find ways to motivate consumers to disclose personal information. The main research question of the study was formed as “How can companies motivate consumers to disclose personal information?” and it was further divided into two subquestions: 1) What types of benefits motivate consumers to disclose personal information? 2) How does the disclosure context affect the consumers’ information disclosure behavior? The conceptual framework consisted of a classification of extrinsic and intrinsic benefits, and moderating factors, which were recognized on the basis of prior research in the field. The study was conducted by using qualitative research methods. The primary data was collected by interviewing ten representatives from eight companies. The data was analyzed and reported according to predetermined themes. The findings of the study confirm that consumers can be motivated to disclose personal information by offering different types of extrinsic (monetary saving, time saving, self-enhancement, and social adjustment) and intrinsic (novelty, pleasure, and altruism) benefits. However, not all the benefits are equally useful ways to convince the customer to disclose information. Moreover, different factors in the disclosure context can either alleviate or increase the effectiveness of the benefits and the consumers’ motivation to disclose personal information. Such factors include the consumer’s privacy concerns, perceived trust towards the company, the relevancy of the requested information, personalization, website elements (especially security, usability, and aesthetics of a website), and the consumer’s shopping motivation. This study has several contributions. It is essential that companies recognize the most attractive benefits regarding their business and their customers, and that they understand how the disclosure context affects the consumer’s information disclosure behavior. The likelihood of information disclosure can be increased, for example, by offering benefits that meet the consumers’ needs and preferences, improving the relevancy of the asked information, stating the reasons for data collection, creating and maintaining a trustworthy image of the company, and enhancing the quality of the company’s website.

Mobile E-commerce business model – A value web based approach to business models in mobile gaming industry

Tämän tutkimuksen tavoitteena oli tutkia langattomien internet palveluiden arvoverkkoa ja liiketoimintamalleja. Tutkimus oli luonteeltaan kvalitatiivinen ja siinä käytettiin strategiana konstruktiivista case-tutkimusta. Esimerkkipalveluna oli Treasure Hunters matkapuhelinpeli. Tutkimus muodostui teoreettisesta ja empiirisestä osasta. Teoriaosassa liitettiin innovaatio, liiketoimintamallit ja arvoverkko käsitteellisesti toisiinsa, sekä luotiin perusta liiketoimintamallien kehittämiselle. Empiirisessä osassa keskityttiin ensin liiketoimintamallien luomiseen kehitettyjen innovaatioiden pohjalta. Lopuksi pyrittiin määrittämään arvoverkko palvelun toteuttamiseksi. Tutkimusmenetelminä käytettiin innovaatiosessiota, haastatteluja ja lomakekyselyä. Tulosten pohjalta muodostettiin useita liiketoimintakonsepteja sekä kuvaus arvoverkon perusmallista langattomille peleille. Loppupäätelmänä todettiin että langattomat palvelut vaativat toteutuakseen useista toimijoista koostuvan arvoverkon.

Drivers and Barriers of Collaboration in the Value Chain of Paperboard-Packed Consumer Goods

Value chain collaboration has been a prevailing topic for research, and there is a constantly growing interest in developing collaborative models for improved efficiency in logistics. One area of collaboration is demand information management, which enables improved visibility and decrease of inventories in the value chain. Outsourcing of non-core competencies has changed the nature of collaboration from intra-enterprise to cross-enterprise activity, and this together with increasing competition in the globalizing markets have created a need for methods and tools for collaborative work. The retailer part in the value chain of consumer packaged goods (CPG) has been studied relatively widely, proven models have been defined, and there exist several best practice collaboration cases. The information and communications technology has developed rapidly, offering efficient solutions and applications to exchange information between value chain partners. However, the majority of CPG industry still works with traditional business models and practices. This concerns especially companies operating in the upstream of the CPG value chain. Demand information for consumer packaged goods originates at retailers' counters, based on consumers' buying decisions. As this information does not get transferred along the value chain towards the upstream parties, each player needs to optimize their part, causing safety margins for inventories and speculation in purchasing decisions. The safety margins increase with each player, resulting in a phenomenon known as the bullwhip effect. The further the company is from the original demand information source, the more distorted the information is. This thesis concentrates on the upstream parts of the value chain of consumer packaged goods, and more precisely the packaging value chain. Packaging is becoming a part of the product with informative and interactive features, and therefore is not just a cost item needed to protect the product. The upstream part of the CPG value chain is distinctive, as the product changes after each involved party, and therefore the original demand information from the retailers cannot be utilized as such – even if it were transferred seamlessly. The objective of this thesis is to examine the main drivers for collaboration, and barriers causing the moderate adaptation level of collaborative models. Another objective is to define a collaborative demand information management model and test it in a pilot business situation in order to see if the barriers can be eliminated. The empirical part of this thesis contains three parts, all related to the research objective, but involving different target groups, viewpoints and research approaches. The study shows evidence that the main barriers for collaboration are very similar to the barriers in the lower part of the same value chain; lack of trust, lack of business case and lack of senior management commitment. Eliminating one of them – the lack of business case – is not enough to eliminate the two other barriers, as the operational model in this thesis shows. The uncertainty of the future, fear of losing an independent position in purchasing decision making and lack of commitment remain strong enough barriers to prevent the implementation of the proposed collaborative business model. The study proposes a new way of defining the value chain processes: it divides the contracting and planning process into two processes, one managing the commercial parts and the other managing the quantity and specification related issues. This model can reduce the resistance to collaboration, as the commercial part of the contracting process would remain the same as in the traditional model. The quantity/specification-related issues would be managed by the parties with the best capabilities and resources, as well as access to the original demand information. The parties in between would be involved in the planning process as well, as their impact for the next party upstream is significant. The study also highlights the future challenges for companies operating in the CPG value chain. The markets are becoming global, with toughening competition. Also, the technology development will most likely continue with a speed exceeding the adaptation capabilities of the industry. Value chains are also becoming increasingly dynamic, which means shorter and more agile business relationships, and at the same time the predictability of consumer demand is getting more difficult due to shorter product life cycles and trends. These changes will certainly have an effect on companies' operational models, but it is very difficult to estimate when and how the proven methods will gain wide enough adaptation to become standards.