This document presents a study on value creation, co-production and co-creation in NGO-operated clothing industries. It outlines the objectives to conceptualize and model these processes for such industries, demonstrate the model using two cases, and identify directions for future research. The study reviews relevant literature on value creation, co-production and co-creation. It then presents a model showing how these operate in NGO-run clothing companies like Grameen UNIQLO and Aarong, where customers participate in production. Interviews confirm special customers' involvement. While both cases co-create value, Grameen UNIQLO does so more jointly through shared knowledge. The study concludes more research is needed to validate the model

1. Value creation, co-production and
co-creation in NGO-operated
clothing industry
Md. Abdul Kalam Siddike, Amna Javed, and Youji Kohda
School of Knowledge Science
Japan Advanced Institute of Science and Technology
31-10-2013

2. Outline of Presentation
• Introduction of the study
• Objectives of the study
• Literature review
– Value creation, Value co-production, Value co-
creation
• Value creation, co-production, and co-creation model
for NGO-operated clothing industry
• Comparison of NGO-operated clothing industry
（Grameen UNIQLO and Aarong cases）
• Conclusion
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3. Introduction
• Service-dominant Logic (SDL) is an alternative
perspective to the traditional, Goods-dominant logic
(GDL) paradigm
• Which has been recognized as a potential theoretical
foundation of service science
– The main goal of service science is to apply scientific
understanding to advance our ability to design,
improve and scale service systems for business and
societal purposes
• The only difference is conceptualization of services
between Goods-dominant and Service-dominant
logic
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4. GDL (Goods-dominant Logic)
• The conventionally dominant logic of marketing and
market
• Services are units of output
• The purpose of economic activity is to make and
distribute units of output (goods)
• Embedded with utility (value) during production
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5. SDL (Service-dominant Logic)
• A reoriented paradigmatic perspective on marketing
and market
• Service is the application of competencies for the
benefit of the other party
• It implies that service is the basis of all economic and
social exchange
• All businesses are service businesses and all
economics are service economies
• Goods are a distribution mechanism for service
provision
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6. Research Objectives
• To conceptualize value creation, co-production and
co-creation in non-government organization (NGO)-
operated clothing industry
• To design a value creation, co-production, and co-
creation model for NGO-operated clothing industry
• To demonstrate the model by taking the cases from
Grameen UNIQLO and Aarong (two fast fashion
clothing companies in Bangladesh)
• Future directions to develop a unified model of value
creation, co-production, and co-creation for clothing
industry that will be utilized to other sectors
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7. Motivation of the Study
• In Bangladesh ， Grameen Bank and Brac are
working for changing the life style of poor
people in rural areas (poor people)
• Grameen UNIQLO and Aarong are producing
cloths for the rural people， especially Grameen
UNIQLO
• Their main purpose is to provide education，
health ， microfinance ， etc services for rural
people through clothing business
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8. Literature Review
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9. Value Creation (Literature Review)
Authors Definition of value creation
Prahalad and
Ramaswamy
[4]
Value creation is the process in which companies
and customers play a distinct role of producer and
consumer. It is a one way process that flows from
firm to consumer, and controlled by firms only
Ueda,
Takenaka and
Fujita [5]
It is an act of creativity in which the value for
producer and consumer can be determined
separately
Gronroos and
Voima [6]
It is an ongoing process that explains the
customers’ ability to extract value from products
and other resources in use
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10. Value Creation
• Value creation is defined as a unidirectional process
that flows from producers to customers to create
value in the form of products
• In case of both traditional and NGO-operated clothing
industry, producers produce cloths for customers
• And value creation occurs independently
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11. Value Co-production (Literature Review)
Authors Definition of value co-production
Ordanini and
Pasini [8]
Co-production is by using the knowledge of
customers to maximize the service exchange
benefits
Jacob and
Rettinger [9]
The interaction between buyer and seller for the
purpose of creation of new product is co-
production
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12. Value Co-production
• Value co-production is defined as a joint participation
of customers and producers in the process of
manufacturing and developing products/services
• In case of NGO-operated clothing industry, customers
design, process/arrange, and produce
products/services by working together with producers
and designers in clothing companies
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13. Value Co-creation (Literature Review)
Authors Definition of value co-creation
Prahalad and
Ramaswamy
[12]
It is a joint creation of value and experiences by the
company and customers having some necessary
adjustments
Prahalad and
Ramaswamy
[4]
It is a two way process that flows from firm to
consumers and consumers to firm in return. Consumers
have the right to impose their view of choice
Ueda,
Takenaka and
Fujita [5]
It is an act of collective creativity that is experienced
jointly by two or more people so the value for producer
and consumer cannot be determined separately
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14. Value Co-creation
• Value co-creation is defined as a bidirectional process
that flows for a joint creation of value between
customers and producers
• In case of NGO-operated clothing enterprises,
producers develop or create new products or services
jointly with customers. Here, customers participate in
the production process, advertising process, and
selling process. That means customers provide co-
role as producers and customers
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15. Value creation, co-production,
and co-creation model for
NGO-operated clothing
industry
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16. Traditional Clothing Industry
• Clothing: A basic human
needs
• Clothing industry is fully
GDL-based
• Producers products
customers purchase
products by the exchange
of money
• Value is measured by the
product itself and the
exchange of money
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17. NGO-operated Clothing Industry
• Grameen UNIQLO and
Aarong are two leading
clothing companies in
Bangladesh
• Social entrepreneurs work
with Grameen Bank and
Brac (Bangladesh Rular
Advancement Committee)
• Special (members of
Grameen Bank and Brac)
and regular types of
customers
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18. Value Creation, Co-production, and Co-
creation Model for Grameen UNIQLO
• Producers are jointly
developing new products
with customers through the
sharing of experiences,
knowledge, and wisdom
• It reinvests their profits for
social business, educational
program, health program, etc.
• Producers produce products
for regular customers
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19. Interview with Grameen UNIQLO’s
Manager
• Both interviewees conformed that:
– The borrowers of Grameen Bank work as producers as
well as customers
• One interviewee reported that:
– Rural women (special customers) sell cloths from door
to door in rural areas
– Products are sold on consignment with paid
commission based on sales
• Second interviewee reported that:
– Profits will be reinvested in other social businesses
– Bangladeshis are developing the business on their own.
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20. Value Creation, Co-production and Co-
creation Model for Aarong
• Special customers are
taking part in production
by sharing their
knowledge, experiences
and wisdom
• Re-invests the profits for
social entrepreneurship
and special customers
for social business
• The special customers
are producing products
mainly for the regular
customers
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21. Comparison of Grameen UNIQLO and
Aarong cases
Grameen UNIQLO
• Co-creates values jointly
with customers
• Producers and customers
are interacting together
and producing new
products through the
sharing of their knowledge,
experiences, and wisdom
• Community-oriented value
co-creation
Aarong
• Co-creates values very
nominally
• Producers produces
products for selling to
regular customers and
they re-invest their profits
for health services,
educational programs,
poverty eradication and
empowerment of rural
women
• Market-oriented value co-
creation
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22. Conclusion
• Values are creating through the joint interaction of
producers and customers by sharing their knowledge,
experiences, and wisdom
– Grameen UNIQLO, special customers are taking part in the
production and development of products
– Aarong, producers are the special customers who are
producing cloths for regular customers
– The created values from these two companies re-invest to
social entrepreneurship business which includes educational
program, health services, and empowerment of rural women
• Value creation, co-production, and co-creation model in
NGO-operated clothing industry is unique in nature
• In future, qualitative research will be conducted to justify
the proposed model that will broaden the dimension of
SDL concept, and it will be applicable to other sectors
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23. Thank you for your kind
attention
Questions or comments, Please
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