Internet Business Practices Across the Globe: Lessons from Emerging Economies

28 Pages Posted: 29 Sep 2007 Last revised: 29 Sep 2013

Jonathan Whitaker

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

Jason Dedrick

University of California, Irvine

Date Written: August 6, 2008

Abstract

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.

Keywords: adoption, electronic commerce, globalization, Internet, performance

Suggested Citation

Whitaker, Jonathan and Melville, Nigel P. and Plice, Robert K. and Dedrick, Jason, Internet Business Practices Across the Globe: Lessons from Emerging Economies (August 6, 2008). Ross School of Business Paper No. 1113. Available at SSRN: https://ssrn.com/abstract=1017995 or http://dx.doi.org/10.2139/ssrn.1017995

Jonathan Whitaker (Contact Author)

University of Richmond, Robins School of Business ( email )

1 Gateway Road
Richmond, VA 23229
United States
804.287.6524 (Phone)
804.289.8878 (Fax)

University of Richmond - E. Claiborne Robins School of Business ( email )

Richmond, VA 23173
United States

Nigel P. Melville

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

HOME PAGE: http://webuser.bus.umich.edu/npmelv/

Robert K. Plice

San Diego State University ( email )

San Diego, CA 92182-0763
United States

Jason Dedrick

University of California, Irvine ( email )

Campus Drive
Irvine, CA 62697-3125
United States

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