E-commerce competencies and success of Thai e-commerce firms: a mediating of multi-channel retailing advantage.

Author:Jantarajaturapath, Palan

    The use of the internet, by individual consumers and business organization, continues to thrive. The advent of internet has brought important implications to both individual consumers and business organizations. Consumer gets benefit such as, richness of information, convenience of shopping. For business organization internet is a tool for implemented e-commerce system with internet and web technology businesses organization used it in a distribution channel for cost-effective to reach consumers directly. The companies take advantage in web technologies and develop to establish an e-commerce web site to introduce products and distribute information. The e-commerce web site does not only presence but it can also support traditional activities but also support new opportunities that arise from using the web as a new channel to conduct business transaction e.g. business to business commerce, business to customer commerce. Furthermore, it is used for communication and supporting customers (Zhu and Kraemer, 2002) with a new technology that enables companies to reach global destinations and conduct business transaction with low operating cost, offering information of product depth and providing their customers satisfaction (Agarwal and Venkatesh, 2002; Chen and Hitt, 2002).

    Thailand has a population of approximately 64 million. Fixed line telephone penetration is about 12%, while mobile telephony reaches about 30%. Internet users comprise about 10% of the population (Boonyalug, 2004). The Thai government's ICT plan (2000-2010) plays an important role in building and environment for facilitating e-commerce for trading. According to Thai's e-commerce web site survey conducted by e-commerce resource center/NECTEC, during the middle of 2001, there were 6,000 web sites (NECTEC, 2007) and it added up to about 20,000 web sites in 2007. In 2004, the government is investing heavily in e-commerce in order to encourage both government agencies and the private sector-especially small and medium sized enterprises to use e-commerce to increase their efficiency and capabilities. A more recent survey in 2007 found that most customer online purchases first, book 34% second, service and reserve 25.5% and third, music online by downloading 20.9% (NECTEC, 2007). With government policy, government encourages e-commerce entrepreneur's register with the Department of Business Development Ministry of commerce (DBD, 2009). In the year 2005 there were 959 firms registered but in the year 2009 it reached about 4,000 firms. In conclusion, the status of e-commerce in Thailand is continuing growth and high competition, e-commerce entrepreneur's should be understand how to build e-commerce competencies for sustaining competitive advantage and long term success.

    The purpose of this study is three-fold. First is to integrate three dimensions of e-commerce competencies namely; content information richness, web-based transactional process effectiveness, and customer responsiveness. The second is to explained relationship among constructs by resource-based view of the firm theory to explain e-commerce competencies and e-commerce success. The third is to seek what major factors of antecedent of e-commerce competencies are. Hence, the research questions as follows:

    * How do e-commerce competencies affect e-commerce success via mediating multi-channel retailing advantage?

    * How do market turbulence and technological turbulence moderate multi-channel retailing advantage - e-commerce success relationship?

    * How do the major factors of antecedents affect e-commerce competencies?

    * How does moderating of regulatory support affect e-commerce competencies?

    Specifically, the objectives of this study are 1) to investigate the relationship e-commerce competencies affect e-commerce success via mediating multi-channel retailing advantage. 2) to examine market turbulence and technological turbulence influence multi-channel retailing advantage--e-commerce success relationship. 3) to investigates how the major factors, executive involvement, staff expertise, and IT infrastructure, in of antecedents affect e-commerce competencies. 4) to examine moderating regulatory support affect antecedent of e-commerce competencies--e-commerce competencies relationship.

    The structure of the remainder of this paper is as follows. The next section reviews literature of an e-commerce and theoretical foundation. Then we introduce conceptual framework and propose each hypothesis, derived from the related literature. The next section addresses the data source and variables used in the empirical tests. Analysis results from OLS regression will be reported in the following section. Lastly, discussion and implications based on results will be drawn.


    2.1 Electronic Commerce

    Electronic commerce (e-commerce) is changing the way business is conducted throughout the world. The rapidly change of computer technology, communication, and infrastructure enables e-commerce to allow organizations to streamline their business process, enhance customer service and offer new channel to customer (Chang, Jackson, and Grover, 2003). An e-commerce is defined as "the process of trading goods, information, or services via computer networks including the internet over website" (Silveira, 2003). E-commerce is not just about buying and selling product also covers information for customer inquiry production information, price comparison. Therefore, e-commerce has directly impact on business owners, suppliers, and customers. E-commerce can be broken into four main categories: B2B, B2C, C2B, and C2C (Chen et al., 2008). Next, we describe each category.

    B2B (Business to Business) is the exchange of products or services between businesses rather than between businesses and consumers a transaction conducted electronically between businesses over the Internet, or private networks or EDI system (Jennex, Amoroso and Adelakun, 2004). Such transactions may be conducted between a business and its supply chain members, as well as between a certain business and any other businesses.

    C2C (Customer to Customer) a consumer transacts directly with other consumers. C2C e-commerce usually refers to the business model that focuses on providing a flat form to allow an individual to trade or barter goods and services with another individual (Foster and Lin, 2005). For example, C2C includes individuals selling an old cell phone, car and so on in online classified or auction sites like ebay.com.

    C2B (Consumer to Business) category includes individuals who use the Internet to sell services or product to organizations and individuals who seek sellers to bid on products or services e.g. owner of One-Tambol-One-Product (OTOP) product offering product on internet (www.thaitambon.com).

    B2C (Business to Customer) B2c e-commerce refers to retail transaction of electronic sale of goods, services, and information content from businesses to individual shoppers, such as www.amazon.com.

    This e-commerce type is also called electronic retailing or e-retailing (Choi and Park, 2006). B2C has now a major component in the marketing strategy of retail firms to take advantage of e-commerce (Yap, et al., 2006). Therefore, in this study we focus on B2C e-commerce type.

    2.2 Theoretical Foundation

    The resource-based view of the firm (RBV) has begun in the strategic management literatures, an approach developed by Penrose (1959) extended by the contributions of Wernerflet (1984); Dierickx and Cool, (1989); Barney, (1991); Grant, (1991). Barney categorized resources into three groups: physical resources such as plant and assets; human resources such as management team, training and experience; and organizational resources such as organization culture and reputation. The RBV posits that a firm is characterized by its unique resources whose control, use, and disposition by management help to determine its value (Tarafdar and Gordon, 2007). The resource-based view of the firm suggests that organizations compete and create value on the basis of resources that are unique, rare, valuable, and not easily imitable or substitutable which would attain competitive advantage and superior performance (Barney, 1991). Javidan (1998) argue although each firm has a bundle or resources, but not every firm can put its resources into best use. Firm needs capability to allocate them. Capabilities refers to the corporation's abilities to exploit its resources (Javidan, 1998). A combination of resource and capability a better transform process than any other firms called competence.

    Competencies of firm are developed when such resources are combined to create specific organizational abilities or capabilities (Tarafdar and Gordon, 2007). The companies need to understand competence and capabilities to exploit resources for firms which has a sustained competitive advantage and success in long-term (Prahalad and Hamel, 1990; Hafeez, Zhang, and Malak, 2002; Javidan, 1998). Many researches on capability and competencies are relevant e-commerce such as Eikerbrokk and Olsen, (2007) to examine concepts competency factors related to e-business success in European small firm sector. The research was drawn on the resource-based view of the firm and proposed seven e-business competency dimensions namely: the concept of e-business, strategic planning, IT- business process integration, IT management, systems and infrastructure, and relationship competency sourcing alignment effect to e-business success: efficiency, complementarities, lock-in, and novelty. Siveira (2003) identifies distinctive competence in the operations function of e-commerce companies in Argentina by used exploratory case studies which were conducted in five e-commerce companies. The distinctive competencies are divided into three sets referring to upstream (inventory management, database management), structural (workforce and organization, information technology, and...

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