4. RESEARCH ANALYSIS
5.1. Case Analysis
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5. RESEARCH ANALYSIS
5.1. Case Analysis
IT-enabled Collaborations
1. IT-enabled collaboration with SMEs
IT-enabled collaboration with SME partners is described as the degree of SMEs interaction through IT platforms. We assessed IT-enabled collaboration with SME partners based on three levels: do not/mostly do not interact with other SMEs through IT platforms; engage in basic interactions with SMEs through IT platforms;
and engage in discussion or coordination with business partners through IT platforms.
We gave these levels the corresponding ratings of "Low", "Medium", and "High". Our interviews and analysis revealed that A2, A3, A6 and A8 do not interact with other SMEs through IT and usually conduct their communications in person or over the phone. We thus rated these 4 cases as having low IT-enabled collaboration with partners. A1, A4, A5 and A7 engage in basic interactions, such as leaving messages and sharing pictures with other SMEs through Facebook as well as maintaining friendships. We thus gave these 4 cases a medium rating. However, our interviews revealed that no case firm cooperates with partners with the help of IT.
Below are excerpts from our interviews:
We (SMEs) interchange information sometimes, such as on difficult customers. But only using face-to-face communications, we seldom go through Internet. (A6)
I sometimes interact with other SMEs in Facebook. Give them a "like" or leave some messages¡K just like with non-business friendships. (A5)
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As mentioned above, we define IT-enabled collaboration platforms as common integrated service system, such as social networking websites, blogs, and message boards, that can make firms communicate with both existing and potential customers. Through these platforms, managers are able to work alongside customers to generate new ideas. Therefore, to measure value co-creation through IT platforms, the frequency of the firm's communication with customers through IT-enabled collaboration was used.
According to the interviews, in the past, A1 often replied to customers on its maintained guestbook and contacted them by e-mail. However, for personal reasons, she has changed her opinion and behavior with regard to IT-enabled collaboration.
We gave this special case a Medium rating. Unlike the precedent case, A2, A5, and A7 show similar characteristics and communicate with their customers at a medium frequency. They sometimes interact with their customers, and believe that the IT-enabled collaboration platforms are truly effective. Because of their medium frequency in interactions with customers through IT platforms, we give these three cases a medium rating for this category. A3, A6, and A8 are similar in their little use of information technology to support their business operation, let alone to engage in collaboration opportunities on IT-enabled platforms. Only A4 was given a high rating due to daily interactions with people on various Internet platforms. A4 regards these different platforms as valuable not only for promoting his business but also for knowing more about customers. This case is an ideal example of customer-friendly cooperation through information technology.
Below are excerpts from our interviews:
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In the past, I have often interacted with customers. For example, I took some photos for my customers, uploaded them to my blog, and then e-mailed them out, the B&B holder said. She often replied to customers on the firm’s message board, and sent some greeting cards for Chinese New Year or other holidays. (A1)
For example, it really works. If someone tells us that here have too many mosquitoes, I need to handle the situation; or if someone says that the area is messy, I will sweep immediately. (A7)
Responsiveness
1. Market-sensing capability
In our research, we assessed the degree of SMEs' market-sensing capability based on how SMEs participate in the three stages of market-sensing activities, which we have mentioned in the previous chapter: collecting information on customers, partners, and competitors; interpreting and understanding the collected information;
and making informed decisions in the market. We measured the degree of market-sensing capability with the ratings "Low", "Medium", and "High". From the interviews, we found the following: A1 collects information only for basic understandings and does not want to follow market trends. A2 collects information to understand customer preferences and business operating conditions, but does so only as a reference tool. A4 has full knowledge of information not only on other SMEs and customers but also on its own advantages and positioning, all of which helps to make informed market decisions. A5 and A7 are similar in this regard, having collected some information and having fostered a certain degree of understanding and willingness to cooperate and change. Meanwhile, A3, A6 and A8 have not collected any information through IT-enabled platforms from partners or customers. We thus
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gave A3, A6 and A8 a low rating, A1 and A2 a medium rating, and A4, A5 and A7 a high rating for market-sensing capability.
Below are excerpts from our interviews:
I understand the market trend, but it's uneconomical to spend a lot of money if I decide to change our room. (A1)
I have information on customers and SMEs, but I prefer gaining experience in person. Information from the Internet is only for reference. (A2)
When products and services are different than others, all of the resources will come to me, so, it's important to maintain our strengths. I know where are my customers and understand them as well, it is important. (A4)
If we go the wrong direction (market trend), that will be terrible, so it is important to understand what others SMEs are doing and change the way we operate our business. (A7)
2. Customer-linking capability
In our research, we assessed the degree of SMEs' customer-linking capability based on how SMEs attract, acquire and retain customers. To measure this degree, we gave the ratings "Low", "Medium", and "High". From the interviews, we found that A1 used to attract their customers to make purchase by using interesting photos and words, and contacting them with e-mails and interacting with them on Facebook to maintain the relationship. However, due to personal factors, A1 has changed its mind and behavior on customer relationship management. A2, A3, A6 and A8 seldom use computers to interact with their customer. A4 uses multiple avenues to increase its exposure, using the most natural way to attract customers and frequently contacting
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and interacting with its customers on Facebook to maintain relationship. A5 did not expend much effort to attract the attention of consumers but was very successful in interacting with customers after serving them. A7 has several ideas for how to attract customers and has set up a fan page to interact with future customers and maintain good relationships, but the current owner took control of the business only a few months ago and has not yet begun operations. Our results show that A2, A3, A6 and A8 have a low level of customer-linking capability, A1, A5 and A7 have a medium level, and A4 has a high level.
Below are excerpts from our interviews:
I wrote blogs about travel, food, and B&B to attract customers, and I used to build customer files and contact the customers often. (A1)
I will use different advertising to help our B&B, so that customers can naturally recognize the surrounding environment here, rather than strong placement marketing. In fact, I just often post something on Facebook of my. Many people said that I could be the spokesperson of Wong Lung Pi. (A4)
Some customers said that the photo shoots on our website are not very good, but that was a surprise. I think natural photo shoots are not very good, but customer's actual feeling is more important. (A5)
I would like to interact with my customers. The ecology here is very rich, like tree frogs and fireflies, I take photos to it and post it on the blog. (A7)
3. Promptness
In our research, we assessed the degree of SMEs' promptness based on whether there is an immediate response to the market, partners and customers. We
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measured promptness with ratings of "Low", "Low-to-Medium", "Medium", and
"High". We learned from interviews that A1 can quickly respond to partners and customers and also interact with them as well but has not responded to market changes. A2 responds regularly only to customers' demands and questions. A3, A6 and A8 cannot respond immediately to partners, customers, or the market. A4 responds immediately to customer feedbacks, constantly adjusts to the latest information on partners, and quickly adapt to popular market trend. Finally, A5 and A7 can respond quickly to customers and local activities. We determined that A4 has the highest level of promptness, followed by A1, A5 and A7 which were given a medium rating, A2, which was given a low-to-medium level, and A3, A6 and A8 which were given a low rating.
Below are excerpts from our interviews:
Facebook's sharing feature is very good, you can see instant message anytime. (A1)
I contact customers mostly by phone, but if I see message I will reply to it as soon as possible. When someone sends a message, I get an automatic alert. (A2)
When a customer mentions us, a notification is automatically sent to me. I will see it immediately. (A4)
I will regularly update the B&B information and check messages. (A5)
Performance
In our research, we assessed the case firms' performance based on whether they are improving in terms of income generation, customer relationships, and partner relationships. We rated performance as either "Low", "Low-to-Medium", "Medium",
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or "High". We learned from the interviews that A1 earns income by selling the product and has a better relationship with customers by interacting with them. In addition, A2, A3, A6 and A8 have not experienced income growth or an improvement in their relationship with customers. A4 has successfully reduced the advertising cost, gained income, and improved relationships with both customers and partners. A5 has not substantially increased income but finds that interactions with partners and customers is helpful for maintaining a good relationship, and A7 has not yet begun to operate but has forged good relationships with partners. Therefore, we determined that A4 shows high performance, A1 and A5 show medium performance, A7 shows low-to-medium performance, and A2, A3, A6 and A8 show low performance.
Below are excerpts from our interviews:
I am selling our products on Facebook now. (A1)
I use the information technology to do the marketing for free. I also have 900 friends on Facebook both SMEs and customers, most of whom added me as friend actively. I think this kind of interaction is pretty good, not too commercial, and unobtrusively promote our B&B. (A4)
Through Facebook, I recognize some SMEs in other areas, and we have interaction sometimes on Facebook. Additionally, customers have asked me to recommend few restaurants for the New Year on Facebook, and then later thank me on Facebook, because the restaurant I recommended was really good and cheap. (A5)
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For example, I have good relationship with some SMEs. The friends of theirs, though without connection currently, I still try to add them as friend on Facebook.
(A7)
The interviews, some preliminary analyses from the interview records on eight SME cases are summarized in Table 5-1.
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Table 5-1. Cross-case analysis
Factor Item Definition/Evidence A1 A2 A3 A4 A5 A6 A7 A8
The level of interaction with partners
through IT Medium Low Low Medium Medium Low Medium Low
IT-enabled collaboration with
customers
The level of interaction with customers
through IT Medium Medium Low High Medium Low Medium Low
Immediate response to partners
Immediate response to customers
Immediate response to market
Medium
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5.2.1. Impact of IT-enabled Collaboration with Partners on Responsiveness Figure 5-1 shows the summary of the case analysis presented previously. As charts (a), (b), and (c) indicate, we can see the impact of the IT-enabled collaboration with SME partners on the responsiveness capabilities defined in our study of each SMEs.
(a) (b) (c)
Figure 5-1. Summary of case analysis (I)
First, we examine our hypothesis 1-a, which states that IT-enabled collaboration with SME partners has a positive impact on market-sensing capability.
As chart (a) of Figure 5-1 indicates, a trend line shows a positive relationship between IT-enabled collaboration with SME partners and market-sensing capability. We found that more interaction with partners firms make SME understand what others are doing or actions they might take. In sum, our case study supports hypothesis 1-a, which stated: when there is good IT-enabled collaboration between SMEs, SMEs can contribute to higher levels of market-sensing capability.
The second hypothesis we examine is hypothesis 1-b, which states that IT-enabled collaboration with SME partners has a positive impact on customer-linking capability. As chart (b) of Figure 5-1 indicates, the trend line shows a positive
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relationship between IT-enabled collaboration with SME partners and customer-linking capability. By obtaining information from partners, SMEs can generate more ideas, become more responsive to customer requests, and build greater customer loyalty and better customer relations. In sum, our case study support hypothesis 1-b, which stated: when there is good IT-enabled collaboration between SMEs, SMEs can contribute to higher levels of customer-linking capability.
The third hypothesis we examine is hypothesis 1-c, which states that IT-enabled collaboration with SME partners has a positive impact on promptness. As chart (c) of Figure 5-1 indicates, the trend line shows a positive relationship between IT-enabled collaboration with SME partners and promptness. In sum, our case study supports hypothesis 1-c, which states that when there is good IT-enabled collaboration with other firm, SMEs can contribute to higher levels of promptness.
5.2.2. Impact of IT-enabled Collaboration with Customers on Responsiveness Figure 5-2 presents a summary of the case analysis presented above. As charts (a), (b), and (c) indicate, we can observe the impact of the IT-enabled collaboration with customers on the responsiveness capabilities defined in our research of each SMEs.
(a) (b) (c)
Figure 5-2. Summary of case analysis (II)
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First, we examine our hypothesis 2-a, which states that IT-enabled collaboration with customers has a positive impact on market-sensing capability. As chart (a) of Figure 5-2 indicates, the trend line shows a positive relationship between IT-enabled collaboration with customers and market-sensing capability. We observe that through direct contact with customers, SMEs are able to accurately apprehend present and future market trends. In sum, our case study supports hypothesis 2-a, which states that when there is good IT-enabled collaboration between customers, SMEs can contribute to higher levels of market-sensing capability.
Second, we examine hypothesis 2-b, which states that IT-enabled collaboration with customers has a positive impact on customer-linking capability. As Figure 5-2 chart (b) indicates, A2 has a medium level of IT-enabled collaboration with customers but a low level of customer-linking capability. We observe that A2 regularly replies to customers' questions but has not used this advantage to engage in further interactions with customers using IT resources. Therefore, A2 is not able to enhance its customer-linking capability through IT-enabled collaboration with customers. Although the case of A2 does not show a positive relationship, the trend line shows that IT-enabled collaboration with customers have a positive impact on customer-linking capability. In sum, our case study continues to support hypothesis 2-b, which states that when there is good IT-enabled collaboration between customers, SMEs can contribute to higher levels of customer-linking capability.
The next hypothesis we examine is hypothesis 2-c, which states that "IT-enabled collaboration with customers has a positive impact on promptness. As the trend line in chart (c) of Figure 5-2 indicates, most SMEs demonstrate a positive relationship. The exception to this case is A2, which has a medium level of IT-enabled collaboration with customers but a low-to-medium level of promptness.
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Although this is not classified as being on the same level, we can still classify this as a positive relationship. In sum, our case study still supports hypothesis 2-c, which states that when there is good IT-enabled collaboration between customers, SMEs can contribute to higher levels of promptness.
5.2.3. Impact of Responsiveness Performance
Figure 5-3 shows the summary of the case analysis presented previously. As charts (a), (b), and (c) indicate, we can see the impact of the responsiveness capabilities defined in our research on the performance of each SMEs.
(a) (b) (c)
Figure 5-3. Summary of case analysis (III)
We examine hypotheses 3-a, 3b, and 3-c, which state that market-sensing capability, customer-linking capability, and promptness have a positive impact on SME performance. As charts (a), (b), and (c) of Figure 5-3 indicate, although the trend lines all show positive relationships between the responsiveness capabilities and performance, it appears that A2 and A7 did not show a positive relationship. A2 has a medium level of market-sensing capability and a low-to-medium level of promptness but also presents low performance. From the interview, we observe that the host of A2 is a traditional person and believes in face-to-face communication instead of IT-enabled collaboration. Therefore, even though A2 has a medium level of
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sensing capability and a low-to-medium level of promptness, their impact on performance remains low. A7 has a high level of market-sensing capability and medium levels of customer-linking capability and promptness but has only low-to-medium performance. We have obtained this result because the current host of A7 began renting the farm from the original proprietor not long ago and thus is still in the preparation phase. Therefore, it is expected that the financial performance would be low and that customer relationships would not yet be built, with only relationships with SME partners having been established. Therefore, we cannot yet observe a significant impact on performance. In sum, our case study continues to support hypotheses 3-a, 3-b and 3-c, which state that when responsiveness capabilities are enhanced through IT-enabled collaborations, SMEs can achieve higher performance.
5.3. Findings
, A few interesting findings are listed below to further explore responsiveness capabilities defined in out study. We believe that these findings are able to help us to design a more complete research model in the future.
The Attitude of Running a Business
Do all the SMEs demand for the responsiveness capabilities defined in our study? We found that the attitude of how the hosts run their business will impact the demand for market-related responsiveness capabilities. We classify the SMEs in our case into two categories: low and high demand for market-related responsiveness capabilities. We observe that those whom are yearn for market-related responsiveness capabilities have a positive attitude toward running their business and are very concerned about the trend of the market. Those whom showed low market-related responsiveness capabilities have a passive attitude on their business and prefer to keep
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the original state. It seems that the attitude of running a business might affect the way that SMEs sense and respond the market. Therefore, we can conclude that the attitude of running a business will directly impact the demand for market-related responsiveness capabilities.
The Capability of Using IT
All the SMEs in our case mentioned the importance of customer-linking capability, especially on attracting customer and maintaining customer relationship.
Although the result shows that IT-enabled collaboration has a positive impact on customer-linking capability, we observe that the capability of using IT might play a role between IT-enabled collaboration and customer-linking capability. A2, for example, replies to customers' requirements and questions regularly, but has not used this advantage to engage in further interactions due to the capability of using IT.
Therefore, the capability of using IT should be taken into account when we consider using IT-enabled collaboration to enhance SMEs' customer-linking capability.