Web technologies are transforming the utility-customer relationship.
Debanjan Chakraborty is a principal consultant at Infosys Technology Limited, and is located in Los Angeles. Email him at firstname.lastname@example.org.
In their book, The Future of Competition: Co-Creating Unique Value with Customers, management gurus C.K. Prahalad and Venkat Ramaswamy describe a dramatic change in the way companies interact with their customers. “The most basic change has been a shift in the role of the consumer—from isolated to connected, from unaware to informed, from passive to active. Increasingly, consumers engage in the process of both defining and creating value.”
One technology in particular is driving this shift: Web 2.0.
Examples abound: Secondlife, Lego, IKEA, Fiat, Cisco, Red Hat—we needn’t look far to find a co-creator of value through Web 2.0. After a significant drop in market value in one year, Dell launched Ideastorm, an on-line community where Dell can listen to its customers’ ideas and implement the best ones. Suddenly, firms of all kinds are embracing this philosophy and attempting to create new methods for gaining competitive advantages. The concept is resource based and involves reaching out to customers and prospective employees, who have the potential to become brand ambassadors.