LIST OF ABBREVIATIONS
CHAPTER 1: INTRODUCTION
1.2. Research Context
The use of social media for generating value and co-creation presents an interesting concept which is the core focus of this study. Although prior research has been carried out to highlight the use of
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social media platform for co-creation, there is lack of consensus on the use of such platforms as the primary criteria for value creation. The study by Rashid et al. (2019) has emphasized on the importance of customer motivation and online communities for presenting useful insights which lead to co-creation. However, the study by Kim and Choi (2019) reported that the core drivers which contribute towards successful co-creation involve customer experience, customer satisfaction, expression and sharing ability. Although this study is based on the use of social media by startups, there is a common understanding that small businesses suffer from lack of understanding and utilization of the social media platform and various tools associated with it for co-creation. In fact, a more relevant study is that of Piller, Vossen and Ihl (2012) where the authors used the social exchange theory to explain the customer co-creation involving an active, creative and social collaboration process which is facilitated by the companies.
Currently, organizations utilize the social media as part of the communication tools in supporting a direct conversation with their customers. Evidence has shown that the actual process of using social media and practicing co-creation as part of the organization’s internal process has triggered vast research (Bradley 2011). Therefore, to formulate a value co-creation framework within the customer field interactions context, the research carefully selected the organizations to meet the research needs which is to explore the opportunities for value co-creation and value capture provided by social media, as well as their applicability to strategy development purposes in the context of the hotel industry. Specifically, the characteristics of the chosen organizations are well considering before enacting the proposed research. First, the organizations are categorized as within the limit of the hospitality sector in the United Arab Emirates. In this respect, the hotel and tourism literature provides evidence of the importance of the value co-creation and, the theoretical basis of e-conversation on tourism applications in this area (Chathoth et al. 2016). For example,
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Trip Advisor publishes all user reviews and ratings for each hotel. Therefore, we can distinguish between a key interactive platform through which participants can participate in interactive authoring practices, and it supports an interactive platform which extends the ability to interact with the organization (Ramaswamy & Ozcan 2018). In the extant literature, it has been reported that higher order customer engagement is essential to enhance value co-creation (Chathoth et al.
2016). Furthermore, simply initiating dialogue is not meaningful towards a positive engagement and co-creation but the factors of access and transparency are crucial while also considering the willingness of the customers to co-create (Sarmah, Kamboj & Rahman 2017; Solakis et al. 2021) Social Media platforms as Twitter, Facebook and Instagram can have a huge influence on the perception of hotels. It has now been shown that more than 70 percent of all consumers consult with a social media outlet before committing to get a hotel service (Waechter 2020).
The second characteristic is to ensure the co-creation is initiated as part of a regular marketing activity within the organization. This would allow more exploratory and in-depth knowledge for the data collection procedure. With these characteristics are expected to lead to a better understanding of the value co-creation and its capture within social media use and support to a value co-creation framework within online interaction context and stand out on the unique cultural attributes that impact value capture.
The scope of the present research is limited to the hotel industry in the UAE. This scope is defined on the grounds of recent data, showing that the U.A.E and Dubai specifically ranks third among the top 10 fastest growing hotel destinations globally with a score of 11.8%, following Washington which ranks first with 14.1% and London ranking second with 11.9%, as depicted in Figure 1.4 (Luxury Hotels Index Reports 2020).
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Figure 1. 4: Most popular hotel destination (Luxury Hotels index Reports 2020)
In addition to the above facts, 99.98% of the UAE population is actively using social media with an average of 7 hours and 24 minutes spent in social media platforms, which places the country among the global leaders in this category (Global media insights 2021). This data shows that the application of social media in diverse business contexts in the country, including the hotel sector provides an abundant ground for detailed research.
Furthermore, Facebook and Instagram are among the most popular social media platforms globally as depicted in Figure 1.5. They have fair popularity in the specific context of the UAE with 79%
of the population actively using Facebook and 67.1% - Instagram (Global media insights 2021).
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Figure 1. 5: Most popular social media platforms globally, millions of users July 2021 (Statista 2021b)
What is more, the data regarding the average engagement per social media post, shown in Figure 1.6 uncovers the potential of the two social media platforms - Facebook and Instagram, to attract considerably higher engagement per post compared to the median across all industries (Feehan 2021). These findings additionally justify the feasibility of the present research. Facebook and Instagram are chosen as the social media for the data collection due to their wide adoption in both Global and UAE aspect (Global media insights 2021). While these are most popular social media platforms, there is an academic gap which focuses solely on the use of these platforms for co- creation as it is observed that the prior research have focused on general data collection across social media platforms and smartphones (Cheung et al. 2020; Zadeh, Zolfagharian & Hofacker 2019).
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Figure 1. 6: Average engagement rate per post – all industries (Feehan 2021)
21 1.3. Problem Statement and Research Gap:
Previous research including Ramaswamy and Ozcan (2018), Cabiddu, De Carlo and Piccoli (2014) has addressed that further investigation on different organizational backgrounds may it is needed to improve the concept of value co-creation within the existence of social media and digital platforms. In addition to that, in a recent paper by Brodie, Löbler and Fehrer (2019) have addressed the importance of having an applicable and testable model of the VCC concept as the SDL still in its fancy. Furthermore, the author highlights while service dominant logic aligns with the metaphysical and sociological conditions for the paradigm which explains the VCC, there is need for further development to meet the conditions for an artefact. Based on this, it is envisaged that a VCC framework would address this gap and would explain the VCC using the social media platform for the hospitality industry. Considering SDL and Absorptive Capacity Theory (ACT) perspective is therefore clearly defined as an online activity involving organizational and online customer engagement towards a mutually beneficial outcome. The research addressing this problem is necessary because the online engagement activities have challenged the conventional organizations to react to a co-creation experience (Ramaswamy & Ozcan 2016).
Digitalization has become ubiquitous today and almost every activity can be done within our digitized world. Therefore, a comprehensive view of the roles of digital platforms and their background is necessary for the sake of the customers (Lenka, Parida & Wincent 2017). The acceptance of technology such as social media can be explained using the technology acceptance model which states that the acceptability of an information system is based on two main factors - perceived usefulness and perceived ease of use (Marangunić & Granic 2015). In social media, the TAM is quite evident due to the ease of use, connectedness, enjoyment and perceived trust factors
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(Al-Qaysi, Mohamad-Nordin & Al-Emran 2020). Other studies have also supported the application of TAM in the context of social media (Choi & Chung 2013; Dutot 2014; Rauniar et al. 2014). Another theoretical model which explains the adoption of social media platform is the social exchange theory which proposes that social behavior is the result of social exchange process in which the participants minimize costs and maximize benefits (Chernyak-Hai & Rabenu 2018).
By using the social media platform, the users are provided with a convenient platform through which they can view and share content of their interest. Moreover, understanding the use of value co-creation perception and the online networks role along with its managerial consequences is worth to address (Ramaswamy & Ozcan 2018; Edvardsson & TronVoll 2019). However, there is only a relatively small body of literature that is concerned with value capture on co-creation experience of value field in the interaction environment (Schryen 2013).
The value co-creation literature reports that co-creation is difficult to understand especially when value is transferred from an organizational to a consumer perspective respectively (Vargo & Lusch 2017). Therefore, managerial effort and action is bounded with the rationality and notion of value capture. A more detailed understanding of the value capture process, as well as the transfer of value in the online engagement platforms and the factors determined such a strategy is worth addressing in order to formulate an effective strategy (Chen et al. 2018; de Oliveira & Cortimiglia 2017; Ramaswamy & Ozcan 2016).
Previous research like Lepak, Smith and Taylor, (2007), Pitelis (2009), Agafonow (2014) and Brodie, Löbler and Fehrer (2019) among others, has focused on explaining the theoretical concept of VCC and value capture, its meaning and definition, the mechanisms associated with it, and how it is used by the organizations. On one hand, Lepak, Smith and Taylor (2007) argued that value
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co-creation is not entirely dependent on customers and could be done either through an individual, organization or society. However, the role of technology is not covered by the authors. Similarly, Pitelis (2009) argued that value co-creation is dependent on nature, determinant and trade-offs under the aegis of the business environment and can be strengthened by learning, adaptive and proactive behavior. The author also asserted that firm differentiation can be considered as a major strategy for value capture, which is again dependent on the learning and proactive behavior of the firm. On the other hand, Brodie, Löbler and Fehrer (2019) argues for the use of service dominant logic towards creating foundations for value co-creation. Nevertheless, additional research has highlighted and addressed the need for future investigation which questions VCC, seeking a more definitive concept of value (Ranjan & Read 2016):
How do actors describe the value and the process of value co-creation?
What mechanisms best create and capture value?
While it is established that customer engagement can lead to value co-creation using the resources and capabilities of the organization through its customers and online network relationships, precisely how it can be accomplished remains vague (Hollebeek, Srivastava & Chen 2016). Then, further examination of the characteristics of co-creation in an increasingly digitalized world of interactions is required (Ramaswamy & Ozcan 2018). Further, Eggert et al. (2018) state that the mechanisms that can be used to assess the value of common experience is an important area for more research in the context of online VCC. Additional evidence on the need for further research on value capture mechanism through Technology use in the organization, is documented by James, Leiblein and Lu (2013, p. 1124) in their detailed literature review of 186 articles, written between 1980 and 2011, regarding value capture and innovation, where the author points out that “we lack
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a cohesive logic that identifies and explains how specific causal mechanisms link different institutional, industry, firm, and technological characteristics with the selection of particular value capture mechanisms”. While Tiago and Veríssimo (2014) have acknowledged the influence of marketing and customer relationship through the use of digital platforms, this study highlights the challenges for firms to adopt a full-fledged social media presence. This leads to the conclusion that the existing literature does not fully reflect the adoption of social media platforms or identify the mechanism of technology in value capture. In other words, all work to date is theoretical in scope and has not fully described the appropriate value capture mechanisms, with several articles calling for further discussion of value capture in social media-based value creations as being critical (Hollebeek, Srivastava & Chen 2016).