INVESTIGATING THE BUYER-SELLER RELATIONSHIPS IN THE ECONOMIC RECESSION: A
QUALITATIVE APPROACH
Irene Samanta
Piraeus University of Applied Sciences (TEI), Greece
E-mail: isamanta@teipir.gr
Submission: 05/11/2015
Revision: 20/11/2015
Accept: 19/12/2015
ABSTRACT
The research paper described the in-depth interviews used in investigating
the buyer-seller relationships in the e-commerce world
during the economic recession in Greece. The
data collected from these interviews were analyzed. The qualitative research findings identified how B2B e-commerce
has
started to change the future of the participating organizations
in Greece. On the one hand, a number of benefits have occurred from the
development of e-business
and
on the other hand, B2B firms need to adopt an innovation
culture and redefine their relationships with their partners from the e-marketing point of
view in order to survive
in the rapidly changing environment. The results of this research
are
used to assist the author
in the future to examine a larger sample of B2B firms in order to validate the intention of companies
to move from the traditional environment
and
to establish e-relationships in an e-business context.
Keywords: B2B relationships, e-marketing, e-business, trust,
commitment.
1. INTRODUCTION
B2B activities are shifting to the
online environment, where stakeholders are enabled to access a variety of information and services that can be considered as a key element of their competitiveness (CHUNG et al, 2003; ALEXANDER; KORINE,
2008).
On the other hand, the use of the internet is increasingly expanding in B2B relationships in
order
to improve
effective communication and distribution and to streamline processes with
customers and stakeholders (WEI-MING OU, 2014).
As Eid et al
(2006) stated, a firm going
global through the
use of the internet should take
into consideration some important factors that define an e-marketing strategy as well as redefining the organization’s
internal processes, since the internet
has changed
the
rules of traditional
business (AUTRY; GOLICIC, 2010). Some
scholars (RATNASINGAM; PAVLOU, 2003) have argued that the internet has created a new marketing arena by moving
organizations closer to their customers.
In the world of e-marketing success is defined by the firm’s ability to build long-term
customer relationships that bring value to the customers and stakeholders and sustain
profitability
for
the organization. Despite the fact that the internet
can enhance relationships, it can also have a detrimental
effect
on them
if the appropriate strategy is not
applied (VIDAL,
2014; STIGLITZ, 2002).
Technology
alone cannot provide a magic solution that will
immediately resolve all e-marketing challenges. According to Strauss and Forest (2003), an important element of defining the strategy to adopt for e-marketing and e-
business in general resides in determining
the company’s initial level of commitment (SAMANTA
et al., 2008; O’CONNOR; DEMARTINO,
2006).
In the B2B area, fully realizing the potential of B2B electronic commerce requires coordinated efforts among partners, who usually have conflicting
objectives. When successfully
implemented, inter-organizational information sharing
makes supply
chains more efficient.
The B2B internet usage is growing in popularity
for
many reasons, ranging from cost savings to gaining
benefits in the value chain. Technology provides obvious benefits for organizations, such as the ability to carry out transactions around the clock, and increases the confidence of business
partners due to their online transaction ability
(GUERCINI; RANFAGNI,
2015).
Therefore, companies can exploit e-marketing successfully
by investing in a combination of innovative implementations
of technology business process enhancements
and organizational changes that are
part of an
overall e-marketing
strategy (DENNIS et
al, 2004; WEI-MING OU, 2014).
B2B internet
marketing
has
received widespread attention as one of
the key
drivers in sustaining an organization’s competitive advantage. On the other hand, the development of internet
usage has experienced transformations, particularly
in the area of the expectations
of organizations for creating value within a supply
chain.
This allows businesses to extend their relationships with customers, suppliers, retailers, brokers, co-producers, employees and shareholders and achieve a more
personalized relationship
with them (WANG; LALWANI,
2007; SAMIEE, 1998). The development of
such personalized relationships is a key goal of marketing, because they
tend to be more
sustainable (KALACOTA; ROBINSON, 1999; WEI-MING OU, 2014). The research
asks the following research
questions, which
state clearly, what the
study investigates:
·
How does globalization affect B2B firms?
·
How do B2B firms have to
change their business concept in order to
respond to the pressure from globalization?
·
What are the opportunities
of the new culture for involvement in B2B e-commerce?
What
are
the benefits for involvement in B2B e-commerce?
·
What are the characteristics that
impose B2B e-relationships
to take place compared with traditional relationships?
2. LITERATURE REVIEW
According to Buvik et al.,
(2014), the areas of the industry value chain facing the greatest changes due
to e-business and its supporting technologies are the traditional marketing practices,
customer services and sales.
Also, Grant et al., (2014) Singh and Smith (2004) and
Weller (2000) stated that the field of marketing is at the centre
of the changes caused by the industry’s entry into the digital environment
(SINGH et al, 2003).
The term “e-marketing” tends to refer to an external
perspective of how the internet can be used in B2B activities are shifting to the online
environment, where stakeholders are enabled to access a variety of information
and services that can be considered as a key element of their competitiveness
(CHUNG et al, 2003; TURBAN et al.,
2002).
On the other hand, the use of the internet is increasingly
expanding in B2B relationships in order to improve effective communication and
distribution and to streamline processes with customers and stakeholders. As Eid et al (2006) stated, a firm going global with the
internet should take into consideration some important factors that define an e-marketing
strategy as well as redefining the organization’s internal processes, since the
internet has changed the rules of traditional business.
Some scholars (DOWELL et al., 2013; RATNASINGAM; PAVLOU,
2003) have argued that the internet has created a new marketing arena by moving
organizations closer to their customers. In the world of e-marketing success is
defined by the firm’s ability to build long-term customer relationships that
bring value to the customers and stakeholders and sustain profitability for the
organization.
Despite the fact that the internet can enhance relationships
it can also have, a detrimental effect on them if the appropriate strategy is
not applied (STIGLITZ, 2002). Technology alone cannot provide a magic solution
that will immediately resolve all e-marketing challenges. According to Strauss
and Forest (2003), an important element of defining the strategy to adopt for
e-marketing and e- business in general resides in determining the company’s
initial level of commitment (O’CONNOR; DEMARTINO, 2006).
In the B2B area, fully realizing the potential of B2B
electronic commerce requires coordinated efforts among partners, who usually
have conflicting objectives (PAULSSEN, 2014). When successfully implemented,
inter-organizational information sharing makes supply chains more efficient.
The B2B internet usage is growing in popularity for many reasons, ranging from
cost savings to gaining benefits in the value chain.
Technology provides obvious benefits for organizations,
such as the ability to carry out transactions around the clock, and also increases
the confidence of business partners due to their online transaction ability
(RATNASINGAM; PAVLOU, 2003). Therefore, companies can exploit e-marketing
successfully by investing in a combination of innovative implementations of
technology business process enhancements and organizational changes that are
part of an overall e-marketing strategy (DENNIS et al, 2004; SAMANTA, 2009).
It has both an internal and an external perspective, considering
how marketing processes and communications can be improved through information
and communications technology in order to achieve e-marketing objectives (JONES,
1996).
The internet enables the customer to be in touch with the
firm at any time and from any point of the compass, in order to collect
information and perform transactions (TURBAN et al, 2002), which can be
adjusted to the special needs of the customer.
These processes and their absorption by firms have
reconstructed the way in which firms develop and manage their relationships
with customers (SINGH; SMITH, 2004). In the world of e-marketing success is defined
by the firm’s ability to build long-term customer relationships that bring
value to the customers and stakeholders and sustain profitability for the
organization.
The fact is that there is confusion over the definition
of the term e-marketing in B2B e-relationships indicates the lack of a coherent
theory that could explain this phenomenon. The academic community, so far, has tried
to mix already-existing theoretical models to investigate and explain issues related
to marketing in B2B e-relationships (BUVIK et al., 2014).
As e-business applications become commonplace and more
sophisticated, B2B firms face the problem of technological innovation, software
integration and the difficulty of efficiently designing and implementing their
internal business processes.
The change in the B2B industry has been rapid, making it
difficult for companies to examine thoroughly the advantages and disadvantages
of different ways of managing inter-firm relationships (ARUNKUNDRAN;
SUNDARARAJAN, 1998). Many are struggling to understand and keep abreast of the
technology that is necessary to ensure their success or even survival in an
increasingly competitive business environment (MALHOTRA, 2001; BARTLETT;
GHOSHAL, 1990; CAO et al, 2005; LADO; BOYD, 1997; SHAPIRO; VARIAN, 1998; BUVIK
et al., 2014; CHEE; HARRIS, 1998; RHINESMITH, 1993a).
As technology continually improves, managers in Greece
are forced to cease the opportunities and adopt electronic business to gain a
competitive advantage through e-marketing. The marketing strategy perspectives
and tools that were formulated based on a competitive landscape inhabited by
traditional firms, such as relationships among B2B firms and their relevance to
the new electronic world have not been investigated (PAVALOIA, 2009).
The importance of the future role of e-marketing should
form part of the vision and the organizational culture of a company. Since a
company’s future impact will be significant to most businesses, marketing has a
broad perspective, implies the adoption of new technologies in B2B transactions
in order to gain business success via process innovations, and approaches such
as customer/buyer–seller relationship management.
According to Bondra and Davis
(1996), five marketing strategies can lead to a sustainable competitive advantage
in relation to B2B e- relationships:
·
Actively collaborating
with supply chain partners
·
Extending the company’s
reach up and down the supply chain
·
Changing the supply
chain flow path
·
Growing revenue
·
Transforming capabilities
into new business.
Most of these elements involve benefits filtering to the
supply chain and are therefore relevant when assessing B2B relationships.
Similarly, Rathansingham (2002) mentions the needs
that are generated from:
·
The urgency to
lessen the working costs,
·
The urgency from
collaborators, who have proceeded in electronic operational solutions,
·
The urgency from
competitive threats, as they are formed in the digital environment,
·
The urgency for the
exact monitoring and satisfaction of the request,
·
The pressure for the
reinforcement of the relationships with customers,
·
The pressure for
better financial cycles between offer and demand.
The way in which a business addresses each of these e-marketing
strategies has an impact on the B2B relationships and it is therefore important
that this is sufficiently assessed by the organization (DONALDSON; O’TOOLE,
2007; BERGER, 1995).
Industrial firms place an increasing emphasis on building
long-term relationships in order to achieve mutual goals (SPARKES; THOMAS, 2001).
Therefore, it is important to explore the impact of e-marketing on B2B e-
relationships as represented as one of the most serious challenges facing
firms.
The importance of adapting business models in the strategy
of firms is imperative as well as the need for new designs of inter-firm
networks. Because of the fact that supply chain management has a significant impact
on overall business performance (TAN; KANNAN, 2006), new studies that take into
account the new capabilities as well as the dynamics due to the introduction of
electronic transactions are needed.
Furthermore, additional methodological approaches are
needed to outline implementation issues and strategies (CHUNG-HOON; YOUNG-GUL,
2003).
In the second decade of the new millennium e-commerce
marked by innovations making online transactions easier (FORESTER RESEARCH,
2010). Firms are investing their newfound profits in emerging technologies,
such as sophisticated analytical and personalization tools that enhance the
online experience for existing customers.
The result is that businesses no longer view the Web as a
low-cost sales channel but as a way of improving customer service and
retention. Businesses are debating their online strategy and many believe that
they had become too focused on sales.
“Now they’re looking at their Web sites as a way to drive
in-store traffic and increase their engagement with customers”, says Forrester
Research Vice President Carrie A. Johnson. “This is a huge shift in philosophy
as e- commerce enters a more sophisticated phase.”
New technology is now available that enables businesses
to provide their sales people with channel partners. This has boosted US online
retail sales from $172 billion in 2005 to $329 billion in 2010, according to a
new forecast by Forrester Research, Inc. (Nasdaq: FORR). The increase
translates to a solid 14 per cent compound annual growth rate over the next 5
years (FORRESTER RESEARCH, 2005).
As online commerce continues to grow overall, customer expectations
for B2B e- commerce are also changing rapidly. Companies serving business buyers
are realizing that the old ways of conducting business are no longer sufficient.
B2B companies that wish to grow and become more profitable are looking to adopt
e-commerce.
Forrester Research explains, “e-commerce platforms have a
relatively low cost but high return on investment in the spectrum of enterprise
IT projects and support a new or maturing revenue stream that meets the needs
of a changing customer” (FORRESTER RESEARCH, 2010).
This makes online commerce more important than ever in the
B2B market. According to a recent study by Manufacturing Insights, “Although
the ongoing down market has hit online purchasing growth as well, B2B e-commerce
spending continues to grow and will take a share from the struggling offline
economy” (MANUFACTURING INSIGHTS, 2010).
Similarly, Managing Automation Magazine (2010) reports that
“27 percent of survey participants said their business grew during the last two
quarters of 2009. The internet has taken center stage in this recovery.”
As e-commerce comes to play a more central role in
business, B2B companies realize that their existing, often primitive e-commerce
solutions are insufficient and invest in improving their e-commerce strategy.
Indeed, 48 per cent of companies surveyed in research by Forrester Research
said that an e-commerce platform was their technology investment priority for
2010 (FORRESTER RESEARCH, 2010).
B2B organizations that choose to adopt a modern e-commerce
strategy will increasingly benefit as the economy continues to improve over
time. Conversely, B2B companies that fail to adopt such strategies are likely
to fall significantly behind their competitors.
As Manufacturing Insights reports, “manufacturers are
more likely to emerge in a position of strength from the economic downturn if
they put in place an effective B2B e-commerce strategy. This will give them the
ability to face intense competition from home and abroad, as well as gain the
responsiveness and reliability that is essential in this sector.”
E-commerce technology is continuing to evolve, prompted by
increasingly complex market demands. In 2010, many of those demands centred around the following three trends: 1) the increased
desire to leverage customer context drives the need for robust content
management solutions with advanced targeting and site optimization capability;
2) customers continue to seek the convenience of multichannel, and e-
business leaders look
to their e-commerce technology providers to
minimize the complexity of serving customers via many touch points; and
3) B2B e-commerce is emerging as a growing
and critical component of the overall sales landscape (FORRESTER BLOGS, 2010).
Regarding Greece, a new report by the World Economic
Forum ranks countries in the period 2010-11, with the introduction and
utilization of new information technologies, networks and telecommunications;
Greece occupies the 64th position among 138 countries.
Greece is still technologically far from the northern
countries that monopolize the research and technology industry, spending large
sums of money. More specifically, Greece has low access to the new economy in B2B
transactions and the society of information of all the countries in the
European Union, given that it has low expenditure on research and technology.
Greece, although it lags
behind other European countries regarding the penetration of new technologies,
is starting to show signs of development in B2C transactions (http://www.go-online.gr). The
penetration of broadband internet in the Greek population is (2252653.00 in
2011) certainly contributes significantly to develop B2C transactions, and this
is because the prices of broadband internet in the country are somehow low
compared with the rest of Europe (www.tradingeconomics.com).
At this point it is necessary to reflect on the situation
of the Greek economy in an economic crisis period to demonstrate the role that
B2B e-commerce can play in the recovery and strengthening of the Greek economy.
In Greece the adoption of the euro led to a dramatic
increase in consumer spending, which gave a significant boost to economic
growth. Between 1997 and 2007, Greece averaged 4% GDP growth, almost twice the
European Union (EU) average.
As with other European countries, the financial crisis and
resulting slowdown of the real economy have taken their toll on Greece’s rate of
growth, which slowed to 2.0% in 2008.
The economy went into recession in 2009 and contracted by
2.0% as a result of the world financial crisis and its impact on access to
credit, world trade and domestic consumption, the engine of growth in Greece.
High growth and low interest rates had masked major
fiscal and structural weaknesses, which were aggravated by the global financial
crisis and ensuing recession. As a result of a high 2009 fiscal deficit,
mounting ageing and entitlement costs and deteriorating competitiveness
resulting from higher than Eurozone-average inflation and rigidities in product
and labour markets, the markets in early 2010 began
to question the sustainability of Greece’s public debt (2009 debt recently revised
upward by Eurostat from 115.1% of GDP to 126.8% of GDP). The global crisis and
the consecutive recession caused an increase in unemployment to 9.4% in 2009
(from 7.7% in 2008).
Foreign direct investment (FDI) inflows to Greece have
dropped, and efforts to revive them have been only partially successful because
of declining competitiveness and a high level of red tape and bureaucracy.
Greece has a predominately service economy, which (including tourism) accounts for
over 73% of the GDP.
Almost 9% of the world’s merchant fleet is Greek-owned,
making the Greek fleet the largest in the world. Other important sectors
include food processing, tobacco, textiles, chemicals (including refineries), pharmaceuticals,
cement, glass, telecommunication and transport equipment.
The agricultural output has steadily decreased in
importance over the last decade, now accounting for only about 5% of the total
GDP. The EU is Greece’s major trading partner, with more than half of all Greek
two-way trade being intra-EU.
Greece runs a perennial merchandise trade deficit, and
its 2009 imports totalled 49 billion (euro) against exports
of 18 billion (euro). Tourism and shipping receipts together with EU transfers
make up for much of this deficit (U.S. DEPARTMENT OF STATE, 2010).
In this business environment, the question is therefore whether
Greece seizes the opportunities and reinforces its competitiveness and
productivity. It is widely believed that B2B e-commerce helps firms to reduce
costs and to improve their access to the global market.
The global economic downturn in the business environment
has not slowed the international expansion of e-commerce initiatives and may under
certain circumstances be an outlet for some businesses (VIDAL,
2014).
Particularly promising are the data concerning e-commerce
between businesses and consumers that has entered the stage of maturity in
Greece. The Greek users (4.970.700) of the internet in 2010 fed through
electronic trading of more than 1 billion euros just last year.
This is a very encouraging number that indicates the existence
of a potentially large market, which the Greek business community should take
advantage of, especially now, in the midst of the crisis.
The truth is that Greek e-commerce is not entirely online
since purely online companies in the country are minimal. Both the offline
businesses and their respective e-shop and users remain in the traditional
models and traditional markets.
To settle these problems, more extended cooperation
between the state and the business world is required. The Greek companies must
keep up with the new business requirements concerning new technologies, in
order to reinforce their technological infrastructure and gain wider training
of their executives (SAMANTA; KYRIAZOPOULOS, 2011).
In order to meet the expectations and changes in the
business environment in an economic crisis period, the contemporary medium-sized
companies in Greece have to react frequently and quickly to this new business
environment by accepting an innovation culture and undertaking actions in response
to business pressures, which mean continuously undertaking new initiatives and adopting
innovations, organizing access in business or departmental networks and
adjusting production to the international models, to switch from traditional
commerce to electronic commerce.
Also, B2B firms, by undertaking critical response
activities such as innovative culture response, an extended supply chain and
product customization through e-commerce, will succeed in becoming
multinational and also be concerned with the continuous improvement of costs by
taking measures for increasing productivity and full visibility of the supply
chain while orientating on the world market.
When the companies focus on the above efforts, they should
take into account the constant widening of the personnel’s knowledge and invest
in it, by understanding that knowledge today constitutes the strongest
advantage for competitiveness, in order to move to broad applications of
informatics and new technologies. On the other hand, the state has to reinforce
the companies’ effort to found the adequate infrastructures, in order to
accomplish the much desired progress and international reward (SPARKES; THOMAS,
2001; CHONG; PERVAN, 2008).
Actions and measures to do with the reassessment of the
framework that today still creates boundaries (deregulation of the markets,
cutback of the civil services, motivation for mergers, creation of venture
capital) are required with the development of the capital markets to make the
financing of these adjustments easier (BARRY, 2008).
The improvement of the information net for on-time
information concerning the international changes and the importance of
adjustments as well as the radical restructuring of education and training,
stressing new systems of informatics and the positive connection of education
and production, are two additional actions that are required (FORRESTER BLOGS, 2010).
As a conclusion, the new economy seems to be changing the
world dramatically. It is creating new possibilities for development in
countries such as Greece. It is creating a global economy obliging everyone to
be properly prepared to confront the pressures of international competition.
The responsibilities of both the state and the business
world are immense and any delays will have a negative effect on both industry
and government.
3. RESEARCH METHODOLOGY
Qualitative research was carried out with singular and
multiple interviews from three firms (two multinational firms and one domestic)
which are operated in Greece. The reason for selecting two multinational firms
is that the subsidiaries of multinational firms in Greece are medium-sized
since they employ up to 250 employees.
The approach in this qualitative study, including
in-depth exploration of the complex processes, involved the behaviors and
attitudes of managers to e-relationships and their effect in order to examine
the management perception towards the research problem.
The aim of the qualitative research was to gain an
understanding not only of the influence of e-commerce in firms’ activities but
of their attitudes and perceptions of e-relationships and the criteria they
consider important between the buyer and seller.
After each interview was conducted, the recordings were
transcribed. The transcription procedures involved three steps to ensure a high
quality transcript. After the initial transcription of the interviews, the tape
and the first version of the recording were listened to again and checked for
inaccuracies.
Thereafter, before coding the transcripts and notes, the
researcher listened to the tapes once again to ensure accuracy. During the
process of coding, it was often necessary to listen to parts of the tape for a
third time, especially in instances where there was some possible ambiguity in
the transcribed text. Secondly, all the summaries were combined in order to
keep all the different kinds of sentences or thoughts but deleting sentences
with exactly the same meaning.
Thirdly, all sentences were cut loose and grouped
together based on their meaning. The benefits deriving from the qualitative
research and the interviews were useful for investigation of the examined
areas, thus assisting in the improvement of research issues and resulting in
the unification of the existing knowledge and the precise determination of the
research problem (DICK, 1990).
Moreover, it provided flexibility so that all the issues
pertaining to the research problems could be traced and delved into. The
interview started with general but unstructured questions, followed by an
integral scrutiny of the particular issues. In this specific case, the sample
was constituted of experts from three industries.
The first step in designing the interview was defining
the information and the nature of the issues arising from the bibliography. The
procedure began with issues referring to a bibliography review on globalization
theories, innovation culture and relationship marketing in order to develop the
basic hypotheses of the research scope.
Then the initial questions were defined, as well as the
choice of the enterprises to be questioned and the group of interviewees. The
transcription for each interview was realized on the same day that the
interview took place. The basic issues presented to each interviewee were written
in a detailed summary after each interview.
Following this, a report was elaborated on the
interpretation results and it was compared with the results report from each
interview that would follow. This procedure led to the gradual modification of
the analysis, as new issues emerged after each interview (BATONDA 1998; DICK
1990; NAIR; RIEGE, 1995).
Choosing the size of the interviews sample had to be as
heterogeneous as possible and relevant to the issues at hand (DICK, 1990).
Therefore, a deliberate and non-random sampling method was judged to be the
most suitable (PATTON, 1990).
An important part of the sampling process was choosing
the first business through the ‘snowball method’ (NAIR; RIEGE, 1995). This
means that the expert chosen for the first interview then pointed towards
others who were familiar with this field of research.
In the twelve interviews realized, the parties questioned
were: the assistant general manager, as well as the marketing, sales and
logistics directors with significant experience in sales and in the market and
the e-business sector. The interviews conducted in the framework of the
samples, and the design and management of these interviews, were as recommended
by Carson et al. (2001), as described in detail in chapter 6: communication
with the business, time adjustment, creation of sympathy and neutrality, open
question, probing question, summary, closing of the interview.
The research involved in-depth exploration by interviews
with sales managers, logistics managers, marketing managers and assistant
general managers in firms Alpha, Beta and Gamma. The interviews were tape-recorded
and each lasted between 45 and 90 minutes. In total twelve meetings were
conducted, with four in each firm.
The interviewees’ names are designated with letters from
A to D for reasons of discretion: (Multinational company) Αlpha
Firm – (AΑ) assistant general manager, (AB) marketing manager, (AC) sales
manager, (AD) logistics manager; (Multinational company) Beta Firm – (BA)
assistant general manager, (BB) marketing manager, (BC) sales manager, (BD) logistics
manager; (Domestic firm) Gamma Firm – (GA) assistant general manager, (GB)
marketing manager, (GC) sales manager, (GD) logistics manager.
These codes will be used in brackets to mark the
interviewees’ information.
The interviews used questions categorized according to Kvale (2003)
a)
Introductory questions: “Can you tell me about…?”; “Do you remember a case
where…?”, “What happened in the incident that you are mentioning?”
b)
Probing questions: “Could you tell us something more about this?”, “Can you
give us a detailed description of what happened?”, “Do you have further
examples of this?”
c)
Definition questions: “What had you considered at the time”, “What did you
really do...”
d)
Direct questions: “Have you ever received help from the government?”
e)
Indirect questions: “How do you think other companies respond to
competition?”
f)
Structured questions: used when the topic has been exhausted following a
long pause and irrelevant answers: “I would now like to introduce another topic
of discussion…”
g)
Silence: pauses were used, so that interviewees could have enough time to
think and link the information, reflect and break their silence.
h)
Interpreting questions: “Now, does this mean that ...?” “Is it true that
you feel that ...?” “Maybe the expression…?” “Justify what you just expressed”.
The first question posed to each interviewee was a broad
and general one. The interviewed parties were asked to narrate a story from
their experience and explain the way that electronic activities are used in a
B2B situation. The question allowed the researcher to obtain a general picture
of the role played by e-commerce in the specific business. Most participants
agreed that e-commerce has become a strategic part of their entire business
activity.
4. QUALITATIVE RESEARCH RESULTS
4.1.
The effect of the internal and external environment in buyer-seller relationships
The interviewees were asked to refer to the business
environment and how the changes that take place in it influence their
businesses. First, the factors from the business environment were recognized as
crucial in order to develop ‘new’ ways of doing business and adopt an
e-marketing strategy.
A significant motive of those questioned is globalization
and the free market economy, as the global economy requires an understanding of
the foreign marketing environment.
The interviewees were asked about the growth of their
company in Greece. One interviewee said:
“We are quite reluctant to develop a further factory in
Greece because the environment is fluid...” (AA). “Industrial relations are not
flexible with high non-labour costs.” (BA). Another
respondent said: “Bureaucracy is a negative factor in the expansion of our
business....” (AA).
International delivery is important as it enables the
firm to design a logistical system that allows them to deliver their
products/services across borders efficiently, as stated by one interviewee:
“The participation
of Greece in
the Euro has
helped us to
become a commercial enterprise and not industrial, and
thus via electronic commerce we are able to perform our planning deliveries on
time...” (BA).
Most participants agreed that e-commerce plays an
important role in their relations with other businesses during transactions.
More specifically, e-commerce is a mediator in relations between companies, as
it offers new information infrastructure, allowing them to develop and maintain
their relationships with their basic partners.
Most interviewees believe that e-commerce has generally
reinforced their relationship with other businesses. This is because e-commerce
allows them to offer information to the buyers / suppliers in a more effective
and efficient manner, while reducing communication obstacles. For instance,
“it gives us the opportunity to offer much more
information to our partners than before” (AB). “For us it is a boost… there’s
no doubt... because we can keep people promptly and precisely updated, which is
appreciated” (BC). “It is easy and
cost-efficient for maintaining the relationship BD”.
E-commerce is also opening doors for more relationships
and accelerates the process of relationship building from its outset, through
negotiation, creation, until completion. For instance, “it would take months or
years to build cooperation relationships. We can now accelerate this and do it
in two months” (BB). “Through e-commerce we can receive the information we need
in time and inform the client in due time ...” (GB).
However, most interviewees mentioned that e-commerce has
little effect on the supplier/buyer relationship. For instance, one interviewee
stated that, “there is an interest in maintaining a long-term relationship with
the supplier/buyer. The creation of relationships with new suppliers/buyers
demands time and very often you cannot claim a credit (for payment) at a first
stage, when you are making an agreement with a new supplier/buyer. Moreover,
there are consequences for the cash flows” (AB).
In addition, the levels of these long-term relationships
vary according to other factors, such as the product itself. For example, “if there is no big difference
between products and the decision to buy concerns mainly their price, then he
will probably not put much effort into the relationship” (GC).
4.2.
E-commerce facilitates buyer -seller communication
Most of the participants agreed that e-commerce increases
communication and has a positive effect on the exchange of information, as a
large volume of information can be shared between two enterprises.
For instance, one interviewee noted, “I do not see any
change in the number of telephone calls and/or fax communication and in
face-to-face contacts ... I believe that it depends on the kind of
communication, for it to be more effective in a specific situation” (AA).
Therefore, there is a qualitative increase in
communication, due to the cost efficiency emanating from e-commerce. More
specifically, the speed of forwarding documents, the number of enterprises that
can communicate, and the frequency and attainment of communication have
improved through e-commerce. For instance, one interviewee commented: “we
communicate through a much larger spectrum now… just like our partners… the
communication cycle has definitely been broadened” (BB).
“E-commerce allows for real-time communication” (BB). “We
communicate much more now with our clients abroad” (AB). “It was very costly to
send advertising brochures or information newsletters ... e-commerce has
changed this ... We have sent electronic information newsletters which have
kept us in touch with our clients effectively” (GB).
The interviewees also mentioned that e-commerce is
generally not used in the initial communication with a partner, when building
trust is still in the early stages. As agreements between enterprises develop,
e-commerce grows accordingly. Finally, e- commerce has positive results with
regard to buyer-seller communication.
4.3.
E-commerce's
effect on the interdependence between enterprises.
Most of the questioned parties commented that e-commerce
does not have any effect on the interdependence between businesses. This is due
to the fact that interdependence in a relationship is determined by various
factors such as sufficient knowledge regarding the trading enterprise, and not
just the product, as well as factors like its price and localization. For
instance, “… we depend greatly on our supplier/buyer, regardless of whether we
use e-commerce or not” (GD). An interviewee also commented:
“We are still very much dependent on our relationship
with the businesses with which we trade. In
a B2B situation, the tendency of the larger companies is to have fewer suppliers/buyers
and to maintain good relations with them” (GA).
Moreover, some interviewees noted that the effect of
e-commerce hinders the development of the relationship, because in some
companies the ability to use e-commerce has become one of the criteria in
choosing a buyer/supplier. For example, “We do not begin any sort of business
collaboration unless it is in e-commerce... As long as it is locked, not
financially but in the sense of business systems procedures, it is hard to give
up on the relationship” (BB).
Interviewees were asked to assess the effect of the use
of e-commerce on the trust between trading businesses and their partners. Most
do not believe that e-commerce contributes to building trust between the
trading businesses. “... Trust does not derive from the relationship built
through e-commerce. It comes from face-to-face contact and the capacity of two
businesses to offer a satisfying performance” (GA).
“We do not trust someone on the basis of their e-commerce
information or their e-mails. It is something that comes with time and is based
on performance” (GB).
Regarding the building of trust, interviewees consider
the maintaining of trust to be more important: “Often, when one attends a
meeting, one meets new associates, one can talk about what the company offers
and I can say that I’ll email you the relevant information. This is very
powerful” (GC).
The effect that e-commerce has on the satisfaction of
interviewees with their trading businesses appears to depend on what e-commerce
can do for the business. Certain interviewees believe that e-commerce increases
their buyer/seller satisfaction because it can be used in such a manner as to
improve commerce’s rentability. For instance,
“e-commerce allows us to provide something which was not possible before, thus
definitely increasing the satisfaction level” (AB). “… It is very satisfactory
...” (AC).
Moreover, the interviewees believed that e-commerce leads
to the mutual satisfaction of both parties, meaning that, in including
e-commerce in their business procedures, they improve the coordination of
business activities and therefore their partners’ satisfaction with their
performance. “It is very useful ... one can do network connections thanks to
the rapid access to information offered by e-commerce” (BD). “Yes, it
considerably improves the coordination of the business procedure” (BA).
“E-commerce offers information for our business partners
regarding how well we execute the specific work, which also defines their level
of satisfaction ” (AA). “Through better communication – they are kept informed
of anything that happens, and it is very likely that their satisfaction remains
at a satisfactory level” (BA).
Although e-commerce does not appear to be facilitating
the building of trust, it helps in maintaining trust with a partner, allowing
for open communication and the transparent exchange of information. Moreover,
it facilitates satisfaction through the increased commercial rentability, when businesses incorporate e-commerce in
their basic functions. Moreover, the place that e-commerce can occupy in
inter-enterprise relations also depends on how buyers/sellers make use of it.
4.4.
Issues pertaining to the interaction between social
and structural ties in an e-commerce environment.
In order to set the base for questions on how e-commerce
is affecting relationships, the interviewees were asked first to define the
business relationship. Most definitions include elements such as mutual
profitability, with the addition of the notions of value and honesty. Some of
the respondents stated that e-commerce provides the ability to carry out
transactions around the clock, in addition to increasing the confidence of
business partners due to their ability to transact on-line.
They considered that the adoption of an e- marketing
strategy can contribute to the regulation of prices and to better control of
the supply chain, and also influence the speed of the processes in the internal
environment of the organization as well as increasing the growth rate between
the departments.
One interviewee stated: “The major advantages are cost
reduction, improved supply management, and reduced distribution time for goods,
as well as the personalization and customization that the firm implements to
respond to its customers’ needs” ( AC ).
Another interviewee
stated:
“E-marketing doesn’t contribute absolutely to
relationship management and their retention in the level of trust among
businesses is cautious about the dispersion of information which is more personal
than professional” (BB).
In terms of achieving significant quality improvements,
firms reported an increase in up-to-date market information, as well as
improvements in customization, access to innovative products, personalization
and quality of products or services. One interviewee stated: “what plays the
most crucial role is the continuum of information about the market, which
provides a business firm with indispensable knowledge. This can lead to the
creation of an important competitive advantage and therefore boost the
company’s positioning within the market”.
For instance, one interviewee noted, “It must be a
two-way street ... There must be honesty among both parties as to what is being
contributed ...” (BB) and “there must be a two-way communication between a
buyer and a seller to meet their needs ... If I do not have the solution to
your problem or you do not have needs, the relationship does not exist” (AD).
Another interviewee added: “To me, the relationship is an
added value to the agreement between the supplier and the buyer. One virtually
offers and receives value from this agreement ... Its value must be visible
...” (GD) and “it must be an open relationship ... We must be honest with them
and they must be reliable...” (GC).
Interviewees were also asked to comment on the components
of a good relationship. “... During the negotiation procedure you must talk
about what you can offer as well as about what you expect” (GB). “Communication
is important” (AA). “I firmly believe that people communicate with people, they
do not just communicate with the company.
A relationship will be built with some people from that
company and we will create harmonious
relationships with them” (GA). All participants agreed that they try to develop
and maintain relationship with their business partners in the long term, due to
the financial advantages emanating from these relationships.
“It is important to develop long-term relationships with
important partners from our traditional environment and we anticipate this will
increase and be stabilized, not only in the e-commerce environment but also in
the non-e-commerce environment. The benefit is that the effort will definitely
be worth it ...” (GA).
One interviewee gave an example of the benefits emanating
from a long-term relationship with clients. “When we presented our new product
last month, if our relationship was not as good as it is, we would have had to
look at a totally new market, while now we can promote our product to existing
clients who know the products and our company... From a financial viewpoint, it
is logical to maintain these relationships” (BB).
“When the relationship is long-term, you can identify,
either with the way they do business or with the people with whom you close the
deals” (AC). Interviewees were asked to comment upon the interactions of
structural and social ties under the influence of e-commerce.
For instance, one interviewee mentioned that commitment
is related to dependence: “... the more they are dependent on the other
business, the more likely it is for you to be committed to the relationship
with them” (BB). Considering an adequate information technology infrastructure
as a vital pre-requisite for successful B2B e-marketing implementation, one
interviewee demonstrated that his firm was not supported efficiently by an
information support system. “The firm’s department of information technology is
in a restructuring stage and the use of the Electronic Data Interchange (EDI)
is in an embryonic stage….” (GA).
The participants from firms Alpha and Beta agree that an
adequate information technology infrastructure is a vital factor for the
successful implementation of B2B e - marketing. “We use Intranet technologies
and an ERP system…”.
Two years ago the new manager in firm Gamma introduced a
new vision to the organization in order to make it more e-business oriented.
While the decision of the senior management was to progress the necessary
procedures to change from the “old” to the “new” world of business, they faced
resistance from their lower management.
This situation created a “schism” between senior and
lower management and as a result several employees were transferred out of the
marketing department. The assistant general manager argued that: “there is a
question of assimilation of technology and practices by the lower and middle
managers, given that if the procedures are standardized as a result of
e-commerce the move to e-business will cut jobs... therefore, there is
resistance to the speed of the transition to electronic commerce....” (AA).
Another respondent said: "While the parent company
pressures us for immediate changes to adopt e-commerce, the lower and middle managers resist”
(BA). “.. Industrial relations in Greece are stable... I believe that our solution
is to move to electronic commerce instead of revolutionary change, but step by
step” (BA).
5. CONCLUSIONS
The influence of globalization, the intense competition
and new technologies in B2B e - commerce are the external factors that raise
problems and complexities in the future direction of Greek firms. The findings
revealed that the internet and technological changes have influenced the three
firms to develop an e-commerce strategy.
In the internal environment of the respondents’ firms, it
is seen that senior management has a tendency to develop an innovation culture,
so that networks that promote innovation are developed. But
inter-organizational processes remain a difficult aspect for the three firms to
develop, as well as problems encountered related to business culture.
The development of close business partnerships to
optimize the adoption of technological innovations faces delays arising from
the lack of an innovation culture between senior and lower management. The
interviews revealed that the most important relational ties affected by
e-commerce are communication, dependence, trust, satisfaction and commitment.
On how e- commerce has affected business relationships, the findings suggest
that e-commerce has little effect on the relationships between businesses and
their suppliers / buyers.
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