The AERU Value Chain Compass

Value Co-Creation

Innovation

Innovation in a value chain ranges from small operational improvements that increase the value chain’s efficiency, to the development of new products that initially may be unfamiliar to consumers. In some cases, an enterprise might be able to make an innovation using its internal resources, particularly when the aim is to reduce costs without diminishing quality. When the innovation aims to increase revenue, however, success may require collaboration across the value chain.

Case studies in the research included value chains where the managers adopt a purposeful approach to support innovation.

Questions for developing a value chain

• How does the value chain encourage and evaluate ideas for innovation?

• How does the value chain support collaboration among partners to achieve innovation that creates greater value?

• How does the value chain negotiate risks and rewards for participants in innovation projects?