Mutual value creation in component co-branding relationships

Purpose – This paper explores the process of mutual value creation in a component co-branding relationship between an unknown component supplier and a well-known Original Equipment Manufacturer (OEM). In particular, the purpose of this paper is to investigate the antecedents of parties’ willingness to engage in mutual value creation, thus enriching Grönroos and Helle’s (2010, 2012) model of mutual value creation.
Design/methodology/approach – An in-depth longitudinal analysis of a single case study in the cycling wear industry is presented based on data gathered from several sources, including long interviews with managers of a component supplier and an OEM, promotional materials, press releases and articles in cycling-related publications and on web portals, and online conversations among amateur cyclists.
Findings – Four antecedents of the willingness to engage in mutual value creation are identified: mutual trust; the perceived easiness of alignment between the supplier’s and OEM’s processes and resources relevant to value creation; the expected creation of a substantial level of additional mutual value; and the expected value gains for each party.
Research limitations/implications – The study analyses only one case in a single industry and adopts a dyadic perspective.
Practical implications – This study suggests that – contrary to the traditional view – when specific antecedents for mutual value creation are present, the component co-branding strategy is available to many innovative small- and medium-sized firms without strong brands.
Originality/value – Beyond enriching Grönroos and Helle’s (2010, 2012) model, this study explains why co-branding relationships can be established even in the absence of a strong component brand.