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This interview of C.K. Prahalad, one of the world's leading strategic thinkers, aims to offer corporate leaders a practical look at the radical concepts presented in his The New Age of Innovation (HBP, 2008), written with M.S. Krishnan. A lengthy review of the book is also in this issue.

The questions for this interview were researched by a team of Strategy & Leadership contributing editors. The interview was conducted by Robert J. Allio, a consultant who has previously been a senior executive at major US and Canadian corporations and a business school dean.

Prahalad believes that many businesses will undergo a transformation in the near future as value shifts from offering products to providing co‐created personalized experiences.

Because his new ideas explore the cutting‐edge of management innovation, managers will likely appreciate having Prahalad explain how his new model works. It posits that value will be determined by one customer co‐created experience at a time, defined as n=1; and to compete successfully in this environment, firms must access resources from multiple outside sources, either local or global, defined as R=G. In this interview he discusses the practical steps needed to ready a company to compete in this new business landscape.

C.K. Prahalad is the Harvey C. Fruehauf Professor of Business Administration and Professor of Corporate Strategy and International Business at the University of Michigan Business School. Previous appointments include a visiting professorship at INSEAD and a professorship at the Indian Institute of Management, Ahmedabad where he was also Chairman of the Management Education Program. Here he talks to Sarah Powell about the concept of co‐creation.

Strategy & Leadership asked the originator of the concept of co‐creation of unique value with customers to explain how it works in theory and practice.

Questions for this interview were prepared by both academics familiar with C.K. Prahalad's concepts and managers struggling to innovate new value propositions.

Co‐creation theory asks a basic question. What if: Consumer ≥ the Firm? Instead of assuming that their firm can innovate unilaterally, managers are learning to depend on the consumers to be involved. They shift from product innovations to experience innovations.

Case studies of the development of new experienced‐based value propositions need to address issues such as sustainability of competitive advantage.

The theory points the way to new growth opportunities. If we accept the role of the consumers in helping us create their own experience then finding new markets is not all that onerous. Look at Starbucks–coffee, credit cards, music, and wireless.

Raises basic and provocative questions about the role of the customer in the future of the firm.

As recently as 24 months ago, the principal focus of management attention was cost reduction. Today, the captivating target is growth. How do you account for this rapid shift in interest?

As organizations have expanded globally, control mechanisms utilized in the past may need to be supplemented with a new type of personnel, that of the inpatriate. Expatriates were the most widely used staffing for corporate control, but due to various issues, a complementary set of employees to facilitate corporate goals could be utilized. Inpatriation, as a practical and conceptual means to augment expatriation, is discussed, compared with, and contrasted to, expatriation. This research explores the use of inpatriates in facilitating global control.

Unlike previous studies which emphasize market oriented performance from the perspective of firms or customers, but mainly internally, the paper proposes that firms should prioritize customer‐focused performance defined totally externally from the perspective of targeted customers, which are the fundamental drivers of purchasing or repurchasing behaviors of customers and consequently the key to successful competition in the customer‐centered era. Then, the role of customer‐focused performance in the overall business performance system is examined. After the components and dynamics of customer‐focused performance are analyzed, much attention is given to its key determinants in perspective of a resource‐based view, which aims mainly at bridging the current gaps between strategic management and service management. In addition, important propositions are presented and future implications are discussed.

Aim of the present monograph is the economic analysis of the role of MNEs regarding globalisation and digital economy and in parallel there is a reference and examination of some legal aspects concerning MNEs, cyberspace and e‐commerce as the means of expression of the digital economy. The whole effort of the author is focused on the examination of various aspects of MNEs and their impact upon globalisation and vice versa and how and if we are moving towards a global digital economy.

This second part of Strategy & Leadership's interview with Prof. Venkat Ramaswamy, one of the early proponents of co-creating value with stakeholders, asks him about the progress of the “co-creation transformation” of markets on its tenth anniversary and its wider implications for firm strategists and public policy makers. The interview concludes with a remembrance of the late C.K. Prahalad, a co-developer of the theory, and reviews his many contributions to the advancement of strategic management.

This interview considers how the co-creation view starts with interactions as the locus of value and platforms of engagements with individuals as the locus of value creation.

The co-creation paradigm is a dynamic perspective that sees the interaction of customers, employees and other stakeholders as forums for learning and ever-expanding capability building.

Strategy as “stretch and leverage” in the world of co-creation becomes about joint aspirations>joint resources.

Corporate managers need to understand that leading companies that have successfully adopted the co-creation model follow a simple principle – they focus their entire organization on the engagements with individuals.

This article traces the evolution of strategic management and knowledge management research during the past four decades with particular emphasis on the role of knowledge in interorganizational collaborative arrangements. By outlining the main strategic management perspectives in contemporary business literature and combining them with current knowledge management perspectives, an indication of the evolution of research pertaining to strategic knowledge management emerges. It is shown that most of the current strategic knowledge management research is conducted within the existing paradigms of strategic management. A criticism of this is offered and the article concludes by offering a new, more dynamic perspective of knowledge management, focusing on the synergies of knowledge‐related capabilities in explaining the formation and economic justification of strategic collaborative arrangements.