Internet Business Practices Across the Globe: Lessons from Emerging Economies
University of Richmond, Robins School of Business; University of Richmond - E. Claiborne Robins School of Business
Nigel P. Melville
University of Michigan, Stephen M. Ross School of Business
Robert K. Plice
San Diego State University
University of California, Irvine
August 6, 2008
Ross School of Business Paper No. 1113
Firms in emerging economies are rapidly becoming formidable competitors to long-established industry leaders from developed economies. In some cases, emerging-economy firms are acquiring developed-economy firms, such as the recent acquisitions of Jaguar by Tata Motors and Gateway by Acer. Aside from anecdotal reports of high-level corporate strategies adopted by certain emerging-economy firms, there is little scholarly evidence concerning the operational details of how emerging-economy firms are becoming competitive with developed-economy firms. A common explanation is labor cost or currency advantages in emerging economies. As emerging-economy firms also compete effectively in developed economies using developed-economy resources, this cannot be the entire explanation. We propose another explanation, based on dissimilar adaptation of the Internet to enable and reinforce business practices related to customer relationships and supply chain integration.
This paper draws on original survey data from over 450 firms across 10 countries as well as case examples to illuminate three key ways that Internet business practices differ between developed- and emerging-economy firms. First, compared with developed-economy firms, emerging-economy firms place a relatively higher priority on using the Internet to achieve strong customer relationships via service and support. Second, emerging-economy firms place a relatively higher priority on using the Internet to integrate processes with suppliers than do developed-economy firms. Finally, emerging-economy firms are relatively more driven to adopt Internet business practices to expand existing markets and enter new markets, and accordingly report a relatively greater impact to international sales growth compared with developed-economy firms. Our findings suggest that managers in developed-economy firms would be wise to re-assess and re-evaluate their use of Internet business practices - in particular, in the areas of customer relationships and supply chain integration - to retain competitiveness in the dynamic global economy.
Number of Pages in PDF File: 28
Keywords: adoption, electronic commerce, globalization, Internet, performance
Date posted: September 29, 2007 ; Last revised: September 29, 2013