Roles of value co-creation on social platforms in driving participating businesses’ sustainable competitive advantage and performance

Purpose This study discusses the sources of value co-creation and its effects on businesses using social platforms such as Facebook, Instagram, Twitter and blogs. Design/methodology/approach A total of 301 survey responses were selected. The selected respondents indicated that they lived in South Korea, had an occupation as a private business or marketer and had used a social platform one or more times a day. The hypotheses were tested using a structural equation model. Findings The study reveals that the source of sustainable value co-creation between social platforms and businesses positively affects the competitive advantage of maintaining businesses. This advantage reveals an integrated relationship that leads to the successful financial performance of businesses through online word of mouth and customer satisfaction. Moreover, this study finds that the relationship between variables differs by social platform types (unidirectional vs bidirectional service). Research limitations/implications The results of this study explain the relationship between value co-production, value-in-use, SCA and long-term performance. However, this study focused on private business and marketing staff working in companies in South Korea. Accordingly, more countries in which social platforms are widely utilized should be taken into account to help generalize the empirical findings. Practical implications There is a difference in the relationship between co-creation activity and cost advantage/long-term performance in accordance with the service type of a social platform. The results indicate that a bidirectional service is a more powerful tool for cost advantage and long-term performance. Originality/value This study focuses on the role of value co-creation in social platforms to ensure companies’ sustainable competitive advantage and performance. The results of this study will help companies develop online marketing strategies using social platforms.