International Journal for Quality in Health Care Advance Access published June 14, 2016

International Journal for Quality in Health Care, 2016, 1–5

doi: 10.1093/intqhc/mzw051
Article

Article

Co-creating value through demand and supply

integration in senior industry—observations on
33 senior enterprises in Taiwan
YA-TING YANG1,2,3,†, USMAN IQBAL4,5,6, YA-MEI CHEN1, SHYI SU7,
YAO-MAO CHANG3, YUJIRO HANDA8, NENG-PAI LIN1,†, and
YI-HSIN ELSA HSU2,3
1
Institute of Health Policy and Management, National Taiwan University, Taipei, Taiwan, 2Golden Dream
Think Tank and Research Center, Taiwan, 3School of Health Care Administration, Taipei Medical University,
Taipei, Taiwan, 4Graduate Institute of Biomedical Informatics, College of Medical Science and Technology,
Taipei Medical University, Taipei, Taiwan, 5International Center for Health Information Technology
(ICHIT), Taipei Medical University, Taiwan, 6Health Informatics Department, COMSATS Institute of Information

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Technology (CIT), Islamabad, Pakistan, 7Department of Health Business, HungKuang University, Taichung, Taiwan,
and 8Southern TOHOKU Research Institute for Neuroscience, Southern TOHOKU General Hospital, Fukushima,
Japan
†
These authors contributed equally to this work.
Address reprint requests to: Yi-Hsin Elsa Hsu, School of Health Care Administration, Taipei Medical University, Taipei City,
Taiwan No. 250, Wu-Hsing Street, Taipei 11031, Taiwan. Tel: +886-02-2736-1661 Ext. 3622; E-mail: elsahsu@tmu.edu.tw
Accepted 9 April 2016

Abstract
Objective: With global population aging, great business opportunities are driven by the various
needs that the elderly face in everyday living. Internet development makes information spread fas-
ter, also allows elderly and their caregivers to more easily access information and actively partici-
pate in value co-creation in the services. This study aims to investigate the designs of value
co-creation by the supply and demand sides of the senior industry.
Design: This study investigated senior industry in Taiwan and analyzed bussiness models of 33
selected successful senior enterprises in 2013. We adopted series field observation, reviews of
documentations, analysis of meeting records and in-depth interviews with 65 CEOs and
managers.
Setting: Thirty-three quality enterprises in senior industry.
Participants: Sixty-five CEOs and managers in 33 senior enterprises.
Intervention(s): None.
Main Outcome Measure(s): Value co-creation design, value co-creating process.
Results: We constructed a conceptual model that comprehensively describes essential aspects of
value co-creation and categorized the value co-creation designs into four types applying for differ-
ent business models: (i) interaction in experience spaces co-creation design, (ii) on-site interacting
co-creation design, (iii) social networking platform co-creation design and (iv) empowering custo-
mers co-creation design. Through value co-creation platform design, the senior enterprises have
converted the originally passive roles of the elderly and caregivers into active participants in the
value co-creation process.

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2 Yang et al.

Conclusions: The new paradigm of value co-creation designs not only promote innovative devel-
opment during the interactive process, lead enterprises reveal and meet customers’ needs but
also increase markets and profits.

Key words: co-creation value, demand and supply, integration, senior enterprises

Introduction
Methods
Rapid population aging and low birth rate have widely impacted on
We collected data through literature analyses, secondary data of
societies worldwide [1]. The development of senior industry and
study cases, documentations and analyses of their records, individ-
business opportunities are raised in every aspect of elderly needs,
ual personal in-depth interviews with their CEOs or managers and
including leisure activities, continuous learning, living supports,
field observations. We used a qualitative study to understand value
safety, health care and health management, etc. [2]. Taiwan has
co-creation from multiple managers’ perspectives in a senior service.
become an ageing society in 1993 with elderly population over 7%
This study shed light on an under-researched area. Qualitative meth-
and will become an aged society by 2017, with elderly population
ods are considered appropriate to gain an in-depth understanding of
over 14% [3]. Therefore, the market size of senior industry is esti-
the phenomenon of interest for they can offer and produce masses
mated US$120 billion [4]. The senior industry aims on meeting
of detailed data on a small number of individuals, also are useful in
needs of the elderly and their caregivers, including enhancing access
exploring the intricate details of phenomena as complex as senior
and quality of food, clothes, accommodation, transportation, educa-
service industry.
tion, entertainment, health, esthetics, medical services, occupation,
Thirty-three quality enterprises that supported the development
social services, etc. [5–8].
of senior industry in Taiwan were selected in 2013. These enter-
The alternation in the structure of senior industry and the
prises were selected by two criteria: (i) Targeting on elderly daily
expected business opportunities encourage the enterprises to
health life needs: the services provided by enterprises focus on eld-

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improve the core competitiveness of their business models and
added values [2]. With the use of Internet, customers can more easily
access information [9], actively participate in value co-creation and
help enterprises achieve their objectives. In return, the enterprises
design better business models or expand their service categories
through innovation, to achieve customer-centered shifting in the
industrial ecosystem and to establish the relationship of value co-
creation between the supply and the demand sides [10–12].
By investing the services provided by senior enterprises and their
key activities driven by the key resources, Yang et al. (2015) have
found that business models can be categorized into four categories:
the residential care and co-residence model, the home care and living
in place model, the community e-business experience model and the
virtual and physical portable device model [13]. Depending on the
enterprises’ core businesses, they have different degrees of emphasis
on different models to provide elderly centered products, aiming for
offering one-stop shopping services and total solutions [14].
There were lots of quality-related researches for the senior
industry, such as improving quality, safety and outcome of resi-
dential care [15, 16], hospital services [17, 18], home care [19–
21], etc. Recently elderly centered paradigm has shifted into value
co-creation by supply and demand sides for revealing indeed needs
and better quality; co-creation researches focus on issues including
applying co-creation in aged community [22] and in health care
[11, 12, 23, 24]. According to our knowledge, there was no
research on designs for value co-creation with elderlies and their
caregivers from enterprises’ perspectives. Therefore, our study
aimed to analyze successful senior enterprises on their value co-
creation design models and concluded practical approaches for
other senior enterprises. We adopted ‘Business Model Generation’
canvas approach proposed by Osterwalder and Pigneur [25] and
the principles of value co-creation proposed by Prahalad and
Ramaswamy [26] to investigate and compare the value co-creation
designs on the supply and demand sides of 33 senior enterprises in
Taiwan.
erly health life needs, including food, clothing, shelter, communica-
tion, recreation, medical care and social services; (ii) Quality of
enterprises are well recognized: enterprises have been awarded by
either Taiwan government or well-known NGOs. A list of semi-
structured interviews was generated from prior research. Totally 65
CEOs and managers of 33 enterprises were interviewed.
The study involved 122 h of interviews; each CEO interview
took 1–2 h, which had conducted by at least three research team
members. An expert panel reviewed the list to assess the appropri-
ateness of its contents. We used content analysis approach for direct
interview contents by following ‘ladder of analytical abstraction’
proposed by Carney [27] including steps of transcribing, conceptual-
izing, propositionalizing, graphing and theorizing. Consensuses on
analysis results were reached through research member group
discussions.
Results
Out of the selected 33 enterprises, the one with the longest operating
period had been operating for 51 years, with the shortest being
1 year; 30% had only been operating for 10 years or lower. The high-
est revenue of US$30.8 million was earned by a corporate group that
invested in the senior service business as a project, while the lowest
revenue of US$0.2 million was earned by a small size travel agency.
We found the market of them engaged in was not a mass market
by its attributes but rather an assembly of various small markets.
Therefore, most enterprises choose to provide one-stop shopping
service and total solutions. All the study cases started off as individ-
ual enterprises, then gradually integrated resources with their key
partners, through key activities driven by the integrated key
resources, to achieve business structures that met their demands and
to achieve value co-creation.
The factors that differentiated the most in business models of
the cases were ‘key resource activities’ and ‘distribution channels’.
Co-creating value in senior industry • Quality Improvement 3

This study therefore divided the selected enterprises by two factors catch customers’ real needs and create products and services
into four categories according to Yang et al. [13]: residential care exceeding their expectations.
and co-residence model, home care and living in place model, com-
munity e-bussiness experience model and virtual and physical port-
Social network platform co-creation design for the
able device model.
community e-business experience model
According to the concept of value co-creation, the value is cre-
This model focuses on product purchasing or servicing, and has dis-
ated in the process of interaction between customers and an enter-
tribution channels as physical stores to provide products and service
prise. To assess the effects of co-creation, the enterprise should focus
experience that satisfy the daily living demands of the elderly and
on the overall value in co-creating experience, with emphasis on
their caregivers. Enterprise’s core technologies and key partners’
communication, access, risk evaluation and transparency during the
capabilities have been integrated not only to offer a friendly website
co-creating process.
platform for customers to search for products but also to offer con-
This study found that each of the four business models has its
sultation and interaction online before purchase [19, 20]. Enterprises
own correlated value co-creating design implemented during the
that adopt this model have both online platforms and physical chain
interactions between the supply and the demand sides. The four
stores’ services for elderly to try products in person.
combinations of models and designs are as follows: (i) interaction in
This model has focus on the establishment of e-business plat-
experience spaces co-creation design for residential care and co-
forms for the elderly, and other customers have access to online and
residence model, (ii) on-site interacting co-creation design for the
offline services through Internet, blogs, microblogs and other plat-
home care and living in place model, (iii) social network platform
forms. In the process of managing e-business internet channels,
co-creation design for the community e-business experience model
through interactions with the demand side, the enterprises would
and (iv) empowering customers co-creation design for the virtual
establish social networks and create online forums to enhance the
and physical portable device model.
communications between the supply and the demand sides on the
digital platforms, so the indeed needs of the elderly and their care-
givers can be identified.
Interaction in experience spaces co-creation design for
residential care and co-residence model
Empowering customers co-creation design for the

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The residential care and co-residence model have elderlies live in the
same facility, and the facility provides leisure, activities, ongoing
learning, supports in living, supports in safety, health care and
health management. The supply side usually covers access to food,
clothes, living, transportation, education, entertainment, well-being,
esthetics, health care, occupation and social services. The target cus-
tomers of this model range from healthy elderlies to elderlies with
diseases; the enterprises provide staged or continuous care facilities,
including retirement communities, residential care centers, long-term
care communities and facilities for customers with dementia.
The value co-creation design correlated to this model primarily
aims to establish an experience space where the supply side can
invite the elderly in co-residence for interactions or host sharing ses-
sions, forums and salons. By having the experience space, the supply
side and the demand side can have thorough interactions to co-
create products and service designs that are more applicable for the
demand side.
On-site interacting co-creation design for the home
care and living in place model
This model primarily supports elderlies who require assistance in
daily living and health care services, yet they are unable or not will-
ing to live in co-residence facilities. It specifically provides assistance
for family members and caregivers. Focusing the distribution chan-
nels and customer relationships, the senior enterprises sent care-
givers to the homes of the elderly and provided daily living services,
assisting the elderly with meals, washing clothes, cleaning environ-
ment, helping general affairs, assuring safety in movements and trav-
eling to the hospital.
The value co-creation design of this model focuses on daily liv-
ing services, delivered by the supply side through physical visits to
customers’ homes or residences. Through caring interaction and
adopting neat observational techniques, such as the Ohno circle
observation [28, 29], this on-site interaction co-creation design can
virtual and physical portable device model
This model emphasizes on the development and applications of
Internet platforms in assisting their customers with the use of port-
able and mobile devices to enhance the physical and mental well-
being of the elderly and focuses on education and entertainment.
The target customers range from elderlies with high mobility to
those with low mobility, also with a special focus on elderlies with
physical disabilities.
The empowering customer co-creation model works well when
the supply side designs products, such as portable devices and appli-
cations’ (APPs) aids and invite the elderly and their caregivers to
experience and involve in checking whether services and products
meeting their needs in daily life. It changes the roles of elderly from
being passively taken cared of to suitably utilize their capabilities
and to empower the elderly to participate in the design of mobile
products. Through the proactive participation of the elderly and
their caregivers, either paid by enterprises or being volunteers, the
participation in the interaction between the supply and the demand
sides will lead to the achievement of value co-creation.
Discussion
The evaluation of four kinds of value co-creation designs is shown
in Table 1 by four components of co-creation core principle pre-
sented by Ramaswamy and Gouillart [30]. All four types of senior
enterprises’ co-creation designs in our study meet the four compo-
nents of core principle: the co-creation enterprises’ response to
insights originating from actual engagement experiences of people
innovate new types of experiences shaped by the context of
people interactions, design engagement platforms that drive costs
and risk down and build an expanded, reconfigurable network of
resources [25].
Value co-creation in enterprises could give valuable new experi-
ences to customers in their supply-and-demand interactions, reduce
both supply and demand costs and risks and increase enterprises’
4 Yang et al.

Table 1 The evaluation of four kinds of value co-creation designs

Residential care and co- Home care and living in Community e-business Virtual and physical portable
residence model place model experience model device model

Experience mind-set Building experience spaces; Visiting homes and Establishing online or Designing models that enable
Expanding the space of invitation to participate in residences; providing servicesphysical social networks for participation in product
experiences interactions and observation interactions design process
Context of interaction Inviting the elderly and their Physical visits to the elderly’s
Building physical stores, Designing services that the
Expanding the scope caregivers to the experience homes/residences to provide offering experience services elderly and their caregivers
and scale of interactions spaces for interactions; care services, to observe for for the elderly and their can physically access or
hosting salons, sessions or their needs and assist caregivers; establishing access through applications
workshops accordingly internet forums and social of mobile devices
networks for communications
Engagement platforms Through the establishment Through physical visits to the Through experience spaces in Through virtual or physical
Expanding linkages of experience spaces, elderly’s homes/residences, physical stores, internet mobile devices to help the
among engagement communications and Ohno circle observation and platforms and social elderly and caregivers change
platforms interactions with the elderly on-site investigation for networks to interact and from being passive to being
and caregivers can easily be demands to facilitate communicate with elderlies active, and utilize their
achieved and are communications and and their caregivers to capabilities for the experience
transparent, leading to value interactions and to provide understand their demands of services
recreation extended services and provide extended services
Network relationships Achieving value co-creation Through observation at Through chain businesses to Through the original designs
Expanding stakeholder with the elderly and homes/residences to provide extend the coverage of senior and connections with other
relationships in the caregivers; providing contact extended services for the services and to have enterprises to extend services
ecosystem points for other senior demands connections with other senior and to increase relevant
enterprises to interact for the enterprises resources
development of innovative

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products and services

revenues and reputations. Value co-creation process has converted
customers’ original passive roles into active ones and helped them
become participants of the value co-creation process [11, 26]. It is
not easy especially for the elderly. Such as empowering customer co-
creation model is a good concept yet difficult in practicing especially
in the elderly and disable ones; however, we observed some success-
ful model [5]. For example, there is one enterprise that has devel-
oped an APP for accredited friendly restaurants. This enterprise has
collaborated wheelchair-dependent elderly to visit restaurants, take
pictures and share the needs of disabled and elderly with restaurant
owners. By doing so the value co-creation not only promoted the
APP to restaurants and public but also shared the needs of these spe-
cial customers and empowered the disabled elderly and elevated
their self-esteem. Such value co-creation models have innovative
development and value recreation in the senior industry by different
kinds of interactive process.
With the alternation in the structure of the senior industry and
the expectation of the huge potential business opportunities, senior
enterprises actively explore their core competitiveness and adopt
strategies to added values. As contributed by education and Internet
technologies, the elderly and their caregivers nowadays have the
ability to participate more in their service process [10]. We observed
33 senior enterprises in Taiwan on their designs in co-creating value
through demand and supply integration by field observation,
reviews of documentations and meeting records and in-depth inter-
views with 65 CEOs and managers.
We distilled a conceptual model that comprehensively describes
essential designs of value co-creation and categorized the value co-
creation into four types: (i) interaction in experience spaces co-
creation design, (ii) on-site interacting co-creation design, (iii) social
network platform co-creation design and (iv) empowering custo-
mers’ co-creation design [14]. We identified those certain circum-
stances the enterprises get opportunities to co-create value through
their customers and drive services to a value added forum for con-
versation and interactions by collaborating demand and supply
sites.
Conclusions
The new paradigm of co-creation presents huge opportunity for
senior enterprises. Through value co-creation design, the senior
enterprises have converted the original passive roles of the elderly
and caregivers into active ones, helped them become participants of
the value co-creation process and promoted innovative development
during the interactive process in services. Value co-creation has led
enterprises reveal customers’ experiences and met their needs,
increases markets and profits and also build a new paradigm to put
customer experience at the center of the senior enterprises’ designs.
Acknowledgements
This research was financially supported by grant from ‘Golden Dream
Project’ launched by TaiShang Resources International Group. The funding
body does not play roles in study design, interpretation of data and the manu-
script drafting.
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