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Abstract

Value co-creation (VCC) has served as a facilitator for business innovation by considering the benefits of the relationships between the involved actors. The previous research on VCC has signified an essential impact for both customers and organisations through the negotiated exchange process, which is associated with the service-dominant logic. However, there is limited empirical research that has conceptualised the VCC process. Therefore, this study aims to address this gap by exploring the co-creation process within a value chain. The focus of the study is vegetable marketing in Indonesia. Horticulture business in Indonesia represents a significant contribution to the national economy. The transformation of agri-food supply chains from a traditional product-focussed towards a modern, service-based approach makes them a suitable empirical focus to explore value co-creation. In-depth interviews with multiple agribusiness actors (n=20) within vegetable supply chains of various complexity were undertaken in the West Java Province. An inductive, interpretive analysis shows that VCC can be defined as a result of an iterative process with proactive, inclusive, and collaborative action by involving all actors in the business ecosystem to actively engaged in exploring, exchanging resources and tracking new ideas to satisfy customer needs. The objective of co-creation in a B2B context is to develop an extensive business network, to enhance knowledge and achieve competitive advantage. Multiple stakeholders formed a networkof small businesses to propose a solutionby aligning and synchronisingthe market participants, not only supplier or retailer with the consumer, but also producers such as farmer or farmer groups. The resultshighlight the importance of actors’ willingness to engage in collaboration, mutual understanding, mutual benefits, and thedevelopment of the agriculture community. Four factors are the potential contributors to the VCC process facilitated by inclusive business initiatives. Adopting co-creation initiatives requires the involved parties to realise that the activities offer mutual benefits to all collaborators. The mutual understanding among the involved actors can represent a new idea and develop close relationships on addressing market challenges while the development of the agricultural community to an inclusive agribusiness model is part of the initiative to strengthen businesses.Also, the realisation of co-creation outcomeshassignificant impacts on generating new demand, enhancingthe consumer experience, changing consumer behaviour and improving competitive advantages.A holistic conceptual modelintegrates value co-creation and inclusive business toassess the co-creation potential.The paper also discusses the potential theoretical and practical implications.

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