Abstract
In recent years, increasing numbers of luxury groups have adopted sustainable practices in their supply chains (sourcing, manufacturing, logistics, distribution, servicing, waste and recycling). However, the report from Greenpeace International organization (2014) indicates that some luxury brands/companies did not actively conduct sustainable practices to produce items, which is likely attributed to the cost and risks caused by such practices outweighing the benefits. This, to some extent, is due to the failure of developing collaborative practices. Specifically, some luxury brands may fail to develop collaborative practices to create value that are able to benefit multiple stakeholders. Thus, in our study, we explore the value creation mechanism to create sustainable value that benefits not only brands’ shareholders, but also other stakeholders, including producers, customers, other stakeholders in the society (e.g., marginalized people) and the environment. In addition, based on a case study from Stella McCartney and Kering and the literature on value creation, we develop a novel model for guiding sustainable value creation (i.e., value co-creation model), where the conceptual building blocks and specific practices are presented. Our contribution lies in extending the knowledge of the value co-creation model from co-creation with customers to co-creation with multiple stakeholders and elaborating systematically and empirically sustainable value co-creation mechanisms including the building blocks and specific practices. In addition, this study offers significant managerial insights for luxury brands/companies to effectively achieve sustainable value.
Highlights
Due to environmental degradation and climate change, the manufacturing industry is forced to adopt more sustainable approaches to reduce carbon emission, environmental pollution and energy waste [1,2]
The first building block of the sustainable value co-creation model is to provide complete information flow and product specification, which is consistent with the relevant literature on the block of information access in the value co-creation model [18]
The third building block of the sustainable value co-creation model is to assure green consideration from raw materials to finished products, which is consistent with the relevant literature on the block of supply chain transparency in the value co-creation model [18]
Summary
Due to environmental degradation and climate change, the manufacturing industry is forced to adopt more sustainable approaches (e.g., recycled materials, limited packaging and limited used of chemicals) to reduce carbon emission, environmental pollution and energy waste [1,2]. Based on the elaboration of the cases (McCartney and Kering), this study further explores specific practices for each building block (e.g., diffuse sustainable value associated with the collaboration relationships with other brands and expanded strategic partnership with NGOs). It systematically develops the mechanism for sustainable value creation including building blocks and respective practices from the supply chain perspective that enriches value creation literature and sustainability literature, and offers specific guidelines for operation managers and top management in the luxury industry
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