Customer Co-creation and Dynamic Capabilities - An IKEA Case Study

Abstract: Dynamic Capabilities of a firm bundle all the processes that enable it to sustain competitive advantage in today’s volatile markets. Study of the microfoundations of dynamic capabilities is a fairly new framework. Even so, it is a widely researched one. Customer co-creation has armored firms with a new level of customer knowledge and mature firms are taking to customer co-creation for designing better value propositions to sustain their competitive advantage in the market. This thesis aims at examining how customer co-creation is contributing to the dynamic capabilities of a mature firm. Through the case study of a mature firm, this research analyses the connection between customer co-creation and microfoundations of dynamic capabilities of a mature firm. Relevant literature of co-creation and dynamic capabilities has been used to analyze the data collected through semi structured interviews, other research work and official information shared online by the firm under study. The findings suggest that customer cocreation has improved the microfoundations of the dynamic capabilities of the firm in focus. The fact that customer co-creation has emerged as a promising innovation strategy for mature firms makes this study important for firms evaluating the use of customer co-creation to improve their dynamic capabilities and sustain their competitive advantage.