Green Co-Creation Strategies among Supply Chain Partners: A Value Co-Creation Perspective

Abstract

In response to the global fight against environmental deterioration and resource shortage, many governments call on firms to implement green innovation strategies. However, for most small and medium-sized firms, the high cost of green innovation makes it difficult to achieve green goals, causing the need for a growing number of firms to cooperate with their supply chain partners on green innovations. Thus, this study explores, from a value co-creation perspective, how supply chain partners share the investment in, and benefits of, green innovation, assuring their long-term cooperation. Based on a three-level manufacturing supply chain, this paper proposes three different types of green co-creation strategies (i.e., the manufacturer and its supplier, the manufacturer and its competitor, the manufacturer and its retailer). We set the mechanism of co-creation to share the cost of green investment and consider the impact of co-creation on the sales of supply chain partners. Then, by constructing the value functions of three co-creation strategies and proving the concavity of these functions, the findings indicate that different co-creation strategies can indeed improve the firm’s profit in a certain range and achieve a different maximum value in a certain green investment sharing point. This study enriches the literature on green co-creation in supply chains by combing green investment sharing strategies among supply chain partners with value co-creation. In addition, this study provides manufacturers with guidelines on how to share green costs and choose a green co-creation strategy in different operational environments.

The Drivers of Green Investment: A Bibliometric and Systematic Review

“…There is a strong relationship between financial returns and sustainability, explained by the level of performance for all the metrics analyzed (Carhart's alpha, Sharpe, net return, reduced cost). Ghosh, Sarmah, and Kanauzia (2020) [24]; Li et al (2020) [82] Duran-Santomil et al (2019) [92]; Kim and Lee (2018) [86]; Ganda and Milondzo (2018) [23]; Teti et al (2015) [70]; Yadav, Han, and Rho (2015) [69] With responsible management and strategy, the firms can use tools to optimize their performance, improving sustainability while not necessarily sacrificing financial outcomes and making the company more profitable and more likely to survive in the long run.…”

“…Han et al (2020) [1]; Karlsson (2019) [78]; Kim and Lee (2018) [86] The cooperation mode of value co-creation can guide the partners to invest in green technology and distribute benefits. Li et al (2020) [82] Environmental issues, such as pollution, resource depletion, and ecological degradation have become major concerns of researchers being analyzed globally. Both economically and politically, their approach is becoming crucial for social development and human survival [87].…”

“…As a snowball effect, the manufacturers have started to influence the suppliers' investment strategies along the supply chain. Consequently, in order to satisfy the demands of environmentally concerned consumers, the relationship between enterprises and other partners in the supply chain becomes a key factor [82].…”

Sustainability Through the Digitalization: Exploring Potentials and Designing Value Co-Creation Architectures for Product-Service-Systems

“…Value co-creation refers to the sharing of value creation processes, activities and resources between different actors that cooperate in an ecosystem (Lusch and Nambisan, 2015). This approach originally comes from the theory of service-dominant logic, became more important with the emergence of digitalization and is now used as a basis for designing sustainable value creation systems (Li et al, 2020). The complexity of these value creation systems is increasing, especially due to the growing number of changing actors, varying interactions and distributed competences.…”

Impact of Strategic Cooperation under Competition on Green Product Manufacturing

“…This study contributes to the sustainable supply chain management research stream by analyzing green product manufacturing decisions. We refer some recent work by [2,[34][35][36] for various aspects in this research direction. Due to a growing awareness among consumers about the environmental impact on products they procure, it is always an important issue to study the transition of supply chain decisions by considering the impact of green quality sensitivity in-demand function.…”