競爭市場中資訊科技促進服務創新策略 - 政大學術集成

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(1)國立政治大學資訊管理研究所碩士學位論文指導教授：尚孝純博士. 學. ‧ 國. 立. 政治大. Strategy for IT-enabled Service Innovation in. Nat. n. al. er. io. sit. y. ‧. Competitive Market. Ch. engchi. i n U. 研究生：陳健鈞. 中華民國 99 年 6 月 . v.

(2) ABSTRACT Many studies have explored service innovations regarding the use of information technologies, yet few have addressed the strategic leveraging in IT investment for sustaining competitiveness. The objective of this paper is to examine different strategies that firms have applied in leveraging advanced information technologies for service innovation in highly competitive market. The analysis of strategy is developed based on two dimensions: (1) IT capability, referring to a firm’s ability to deploy IT-based resources, combined with (2) the firm’s complementary resources including customer and supplier relationships, financial capital. We investigate the convenience-store industry and telecommunication industry in Taiwan, are observed to be in the intensive competitive market in terms of the reduced sales growth, intensively innovations undertaken. The case analysis reveals that there are four types of strategies firms apply in leveraging IT for competitiveness: predator, inventor, follower, and hedger. We also found the transition of strategies for IT-enabled service innovation with resource reconfigurated as market evolved. We further identify the resource reconfiguration mechanism occur in the achievement of their sourcing approaches. Generally, this research explains firms’ continuous strategic changes and resource reconfiguration to sustain the advantages of IT-enabled service innovation in competitive market. We suggest a strategy model that includes the issues of the strategy content, path of strategy transitions, resource reconfiguration mechanisms, and resource sourcing approaches. This model provides a guideline for firms to decide their strategies towards different IT-enabled service innovations with the strategic resource configuration changes.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. i n U. v. Keywords: IT-enabled Service Innovation, Competitive IT Strategy, IT capability, Complementary Resource, Resource Reconfiguration.. engchi. Note: This thesis is the final version of the paper “Strategies for Leveraging IT-enabled Service Innovation in Intensively Competitive Market” which was accepted as oral presented paper and published in the Proceedings of 16th Americas Conference of Information Systems (AMCIS 2010), August 12-15, 2010, Lima, Peru.. I.

(3) CONTENTS CHAPTER 1 INTRODUCTION.......................................................................................................................... 1 1.1 Research Background .............................................................................................................. 1 1.2 Research Motivation and Research Question .......................................................................... 2 CHAPTER 2 LITERATURE REVIEW.............................................................................................................. 3 2.1 IT-enabled Service Innovation ................................................................................................. 3 2.2 Strategic Resources for IT-enabled Service Innovation ........................................................... 5 2.3 Dynamic Capability ............................................................................................................... 11 CHAPTER 3 RESEARCH METHODOLOGY.............................................................................................. 14 3.1 Case Study ............................................................................................................................. 14 3.2 Data Collection ...................................................................................................................... 16 3.3 Data Analysis ......................................................................................................................... 16 CHAPTER 4 CASE STUDIES .......................................................................................................................... 18. 立. 政治大. ‧. ‧ 國. 學. 4.1 Convenience Store Industry ................................................................................................... 18 4.1.1 Company A ................................................................................................................. 20 4.1.2 Company B ................................................................................................................. 25 4.1.3 Company C ................................................................................................................. 30 4.1.4 Company D ................................................................................................................. 35 4.2 Telecommunication Industry.................................................................................................. 38 4.2.1 Company E.................................................................................................................. 40 4.2.2 Company F .................................................................................................................. 44 4.2.3 Company G ................................................................................................................. 47 CHAPTER 5 FINDINGS AND DISCUSSION .............................................................................................. 51. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. 5.1 Four Strategies and Two-way Resource Sourcing ................................................................. 51 5.2 Strategy Transition Verse Strategy Remain ........................................................................... 62 5.3 Resource Reconfiguration Mechanism .................................................................................. 69 5.4 Divers, Advantages, and Disadvantages of Pioneer in Service Industry ............................... 73 CHAPTER 6 CONCLUSION............................................................................................................................. 78 6.1 Managerial Implication and Academic Contribution ............................................................. 78 6.2 Limitation and Future Research ............................................................................................. 80 REFERENCE ......................................................................................................................................................... 81 APPENDIX............................................................................................................................................................. 88. II.

(4) TABLES Table 2.1. Summary of IT Capability……………………………………………………………………... 8. Table 2.2. Summary of Complementary Resource………………………………………………………... 10. Table 2.3. Definition and Arguments about Dynamic Capability…………………………………………. 13. Table 3.1. Profile of Studied Companies in Taiwan’s Convenience Store Industry………………………. 15. Table 3.2. Profile of Studied Companies in Taiwan’s Telecommunication Industry…...…………………. 15. Table 3.3. Profile of Interviews………………………………………………………………..................... 16. Table 3.4. Step of Data Analysis…………………………………………………………………………... 17. Table 4.1. Comparison of Numbers of Patents among Four companies………………………................... 30. Table 5.1. Summary of Four Strategies……………………………………………………………………. 57. Table 5.2. Summary of IT Capability Sourcing Approaches…………………………...…………………. 58. Table 5.3. Summary of Complementary Resource Sourcing Approaches…………………….................... 61. Table 5.7. Drivers, Advantages, Disadvantages of Pioneers in Service Context………………………….. 76. Table 6.1. Managerial Implication and Academic Contributions…………………………………………. 79. Table A.1. Cases of IT-enabled Service Innovations in Taiwan’s Convenience Store Industry…................ 88. Table A.2. Cases of IT-enabled Service Innovations in Taiwan’s Telecommunication Industry................... 89. Table 5.5. ‧. ‧ 國. Table 5.4. 學. Table 5.6. Summary of Strategy Transition………………………………………………………………. 政治大 Summary of Strategy Remain…………………………………………………………………. 立 Summary of Resource Reconfiguration Mechanism ...………...………………….................... 65 68. Nat. n. al. FIGURES. Ch. er. io. sit. y. 72. i n U. v. Figure 2.1. Perspective Toward Sustaining Business Innovation…………………………………………... 12. Figure 2.2. Strategies Toward IT-enabled Service Innovations…………………………………….............. 51. engchi. III.

(5) ACKNOLOWEDGEMENT First and foremost I offer my sincerest gratitude to my advisor, Dr Shari S.C. Shang , who has supported me throughout my thesis with her patience and knowledge whilst allowing me the room to work in my own way. I attribute the level of my Masters degree to her encouragement and effort and without her this thesis, too, would not have been completed or written. She also encourages me to attend international academic conference which truly gave the greatest opportunity for me to broaden my horizon by presenting paper and self traveling. It really gave me the chance to know myself better by thinking about more during the trip. I am very happy to work and learn with her during the graduate years. I also gratefully acknowledge many professors: Dr. Minder Chen, Dr. Eldon Y. Li., Dr. Feng-Shang Wu, and Dr. Lin L. Wu who gave me constructive advice and insightful comments during the completion of thesis. Their valuable comments made this research become more complete and substantial in content. Lastly, I offer my regards and blessings to all of those who supported me in any respect during the completion of the thesis. I would like to share the joy and gratification with all of them.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi U. IV. v ni. Chien Chun Chen Taipei Taiwan June 2010.

(6) CHAPTER 1 INTRODUCTION 1.1 Research Background A competitive market leads to challenges, such as slower industry growth and reduced industry profitability (Lele 1992; McGahan et al. 2004; Swaminathan 1998), which increase the need for firms to initiative service innovations to compete and sustain a competitive advantage. Information technology (IT), defined as computer-based technology used for information storage, access, processing, and communication, is a critical strategic choice for service design, delivery system (Lovelock 1995), and performance (Quinn 1996). Extant literature and evidence from practices have shown that firms highly depend on strategically leveraging IT for facilitating and enabling service innovations (e.g., Succeeding through Service Innovation, 2008; Supporting Innovation in Services, 2008) (Sambamurthy et al. 2003).. 立. 政治大. ‧. ‧ 國. 學. The issue of strategic deployment of IT/IS for achieving superior performance and competitive advantages has been a central theme in IS literature (Brandenburger et al. 1996; Kettinger et al. 1994; Picoli et al. 2005). Briefly, the resource base view provides the perspective of why and how IT serves as the strategic weapon for competition (Benjamin et al. 1984; Cash et al. 1985; Ives et al. 1984). Whereas these studies posit a direct relationship between IS resources, capabilities, and firm performance, others have questioned the direct-effect argument and the resource and claim complementarily arguments. This suggests that when only IT corporate has critical business resources and processes, IT provides superior performance (Clemons et al. 1991; Whittington et al. 1999). Consistent with this research, dynamic capability claims that firms must continually reconfigure internal and external resources to form the competences to adapt to business conditions to sustain in a rapidly changing competitive environment (Teece et al. 1997). These well-established frameworks and theories provide a vantage point of views to examine the IT-based advantages.. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Despite many reports discussing the issue of IT on productivity (Brynjolfsson 1993; Oliner et al. 2003), performance (Dedrick et al. 2003; Mahmood et al. 2000), and strategic purpose (Mata et al. 1995), few studies have addressed the issue between IT-enabled service innovation and strategy. Given that service innovation is regarded as the strategic weapon to compete, it is required to broaden our understanding of IT-enabled service innovation in strategies, especially studies evaluating dynamic resources, capabilities, and service strategies (Aleda et al. 2003; Vargo et al. 2004). 1.

(7) 1.2 Research Motivation and Research Question The above mentioned research has thoroughly explained how and why the firms should exploit IT as a strategic purpose to achieve service innovation with the aim to compete and obtain sustained competitive advantage (Bakos et al. 1986; Benjamin et al. 1984). However, some issues remain uninvestigated and need to be further examined. First, although several IT resources and capabilities have been identified and their direct effects on firm performance have been elucidated, the interaction between IT resources and capabilities has not been well examined (Ravinchandran et al. 2005), which leads to our first research question as follows: . How does a firm exploit a critical resource and capability towards different service innovations to obtain a competitive advantage?. 治政大 need to continuously reconfigure Second, to respond to a dynamically changing market, firms activities and resources. However,立 considerations such as how resources are developed, acquired, ‧ 國. How does organization act to sustain IT-enabled service innovation under the dynamically competitive environment?. ‧. Nat. y. . 學. and reconfigured together with the resources themselves have been underexplored in the literature (Wade et al. 2004), which leads to the second research question as follows:. sit. n. al. er. io. To answer these questions, we organized this research according to significant studies based on strategy. Drawing from the resource-based view, we examined how firms exploit strategies by analyzing IT resources, IT capabilities, and complementary resources. From the dynamic capability view, we examined the reconfiguration of resources and capabilities when the intended strategy was changed for different IT-enabled service innovations. This research is rotted in a perspective that views the strategy not as the making of a few discrete “one time” decisions, but as the configuration of interrelated and interlocking resource and activities (Rivkin 2000; Siggelkow 2001; Teece 2007; Wade et al. 2004). This perspective directs our attention to the understating about critical consideration in strategy: the resources and their reconfiguration which results in different strategic impact for firms’ competitive advantages. Ch. engchi. 2. i n U. v.

(8) CHAPTER 2 LITERATURE REVIEW In this section, we draw from the resource based view (Barney 1991; Grant 1991; Wernerfelt 1984) as the micro view to examine strategies for service innovation by taking resources as the basic unit of analysis. Further, we base dynamic capability (Teece et al. 1997) as the macro view to understand the strategy changes to compete and sustain in competitively environment. In detail, we first describe the dimensions of service innovation and highlight the important role IT plays in enabling and facilitating service innovations. Second, we focus on the issues of IT and competitive advantages by discussing the strategic implication of resources including the IT-related resources/capabilities and the complementary resources. Third, we further focus on the dynamic capability to closely understand how firms can sustain in rapidly changing competition.. 2.1 IT-enabled Service Innovation. 政治大. According to Den Hertog‘s research (2000), there are four dimensions of service innovation:. 立. Service concept. io. sit. y. Nat. Service delivery systems. ‧. ‧ 國. 學. The new ideas of how to organize a solution to a problem; Sasser et al. (1978, p. 14) coined the term “service concept,” which they defined as the total bundle of goods and services “sold to the customer and the relative importance of each component to the customer. Service concept is operationally defined as a portfolio of core and peripheral service elements which including the Supporting facilities, goods, information, sensual and psychological benefits (Aleda et al. 2003).. n. al. er. The internal organizational arrangements that enable service value to be obtained by customers; and a dynamic value co-creation configuration of resources, including people, organizations, shared information (language, laws, measures, methods), and technology, all connected internally and externally to value propositions(Spohrer et al. 2008b)other service systems by value propositions. These systems are clusters of diverse organizations, funded by multiple sources, linked together in decision-making and working relationships and serving specialized client population (Alter 1990).. Ch. engchi. i n U. v. Client interface The tools that involve the customer’s participation in the delivery of service value such as ATMs, and some other self service technologies; This include any types equipment in service encounters requires a service provider and a service consumer, and each provider has an interface through which the service consumer interacts to request or co-produce the service. Technology option Froehle and Roth (2003) provided an extension to the customer contact view including Technology-fee, technology-assisted, technology-facilitated, technology-mediated, technology-generated customer contact. 3.

(9) IT’s roles in service innovation Increasingly, companies expect future growth and profitability to come from productivity gains achieved through continuous investment in IT and similar innovations. IT and the Internet have begun to pay off with a surge in service sector performance(Brynjolfsson et al. 2000). IT allows firms to achieve greatest efficiencies through highly standardized or well-scoped alternative configurations. Generally, IT in service is initially implemented for reasons of back-office efficiency. Latter more strategic use of IT is to equip firms with the capability to launch paradigm changes to counter competitors and create new markets for continuous revenue growth and competitive advantages. Drawing from the literatures, the major benefits of IT for service innovation are: (1) coordination and integration; (2) long term relationship with customers; and (3) transforming capability. Coordination and Integration. 政治大. IT helps to integrate the resources separated within the activities throughout the value chain (Porter et al. 1985). However, the examination of value creation should not be restricted to as single organization (Stabell et al. 1998) , but should be shifted in toward the concept of value networks, in which creation of value requires bundled solutions comprising products and services devoted by reciprocal interactions and collaborations across actors within a service ecosystem(Spohrer et al. 2007). In coping with the complex interrelationships between firms, IT enables coordination by serving as shared infrastructure to facilitate the communications across firms and to create a high level of information visibility and agility (Basole et al. 2008; Sambamurthy et al. 2003; Subramani 2004).In sum, coordination of resources increases the flexibility and responsiveness, encouraging effective reconfiguration and collaboration of resources across firms and partners thus facilitating service innovations.. 立. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. Long term relationship with customers and suppliers. engchi. i n U. v. Customer’s involvement can be an excellent source of information for service firms, identifying areas for adjustment or redesign, and suggesting new areas of activity. IT was used to overcome the constraints of time and space (simultaneity), and the effective utilization of production capacity was improved by reducing response time and introducing reservation systems. IT has provided effective means to share information coordination and collaboration and thus increase the flexibility (Barua et al. 2004). Instead of relying on the individual transactions, IT enabled services allow companies to build relationships with customers with value added services to enhance long-term revenue. Computing and IT provide a particularly strong support for building intimated relationships with customers by supplying information and tools to facilitate communication and build customer relationships (Rust et al. 2006).Armed with the long-term relationships and mediated technology, business can continuously improve or create services or to ensure long-term profitability(Heskett et al. 2008). 4.

(10) Transformation capability IT transforms firms to different degrees by supporting different transformation capabilities (Venkatraman 1994). Indeed, much evidences show that manufacturing firms have moved to more services-oriented posture by offering their clients with integrated product-service packages and solutions rather than merely low-price manufactures. For example, TSMC (Taiwan Semiconductor Manufacturing Company) has transformed itself from a firm focusing on low cost product manufacturing to a firm offering total solution services such as immediate status reports on customer orders, by integrating information from its partners’ systems(Hsieh et al. 2002). Another well known example is IBM corporation whose service business contributes the most revenue to the firm after their core business shifted from PC manufacturing into the services , enabled by strong IT architectures(Chesbrough et al. 2006; Spohrer et al. 2008a). 2.2 Strategic Resources for IT-enabled Service Innovation. 治政 Extant literatures have investigated the strategic impact and 大the reason why IT can contribute competitive advantages. Following立 the literature, we examine what resources firms should concern in ‧ 國. ‧. IT-related Resource. 學. regarding the strategy decision toward service innovation. We mainly introduce the three main classes of resources that have shown to be involved in strategic decision in IT-enabled service innovation. There are IT-related resource, IT capability, and the complementary resource. n. al. er. io. sit. y. Nat. Adopting the resource-based perspective which claimed IT applications are potential source of competitive advantages when they are valuable, rare, imperfectly imitable, and non-substitutable (Bakos et al. 1986; Barney 1991; Benjamin et al. 1984). Specifically, studies have shown two factors regarding the IT resource are strongly linked to firm performance. One is the scale if IT resource (Barua et al. 2004; Dehning et al. 2003; Devaraj et al. 2000) The other is the scope of IT resources (i.e., nature of uniqueness of IT applications) which is significantly associated with organizational performance (Bharadwaj 2000; Santhanam et al. 2003). In identifying the strategic IT resources specifically, many classification scheme has been conducted according the research topic and issues such as Grant’s (1991) classification which pointed out that IT resources can be classified into three categories: (1)Tangible resources comprising the physical IT infrastructures which afford the capability for firms to share information across different functions, innovate and exploit business opportunities, and the flexibility to respond to changes in business strategy(Weill et al. 2002) and (2) Human IT resources generally including the technical IT skills, such as developing ,system programming and design and managerial IT skills such as the coordination and project management and the business/IT strategic thinking(Capon et al. 1987) and (3) Intangible IT-enabled resources such as know-how(Teece 1998) ,and corporate culture. This classification scheme critically addresses the intangible value of IT which appears more valuable due to the casual ambiguity.. Ch. engchi. 5. i n U. v.

(11) However, another (Picoli et al. 2005) scheme explicitly divides IT resources into IT capabilities and resources. In this scheme, an IT resource refers to the hardware components, hardware platforms, software applications, software environments, and data repositories. An IT capability refers to the capabilities including the relationship. The classification that distinguishes between the IT resource and capability is similar with the underlying argument that suggests the implicit meaning in the definition of capabilities as an organization’s ability to deploy resources (Amit et al. 1993). In contrast to the resource bundle that serves as the competitive advantage, this research stream argues that it is the heterogeneous capabilities of managing IT that accounts for superior performance and sustains competitive advantages. In fact, the point that distinguishes the resources and capabilities is vividly conducted. Tallon, Kraemer and Gurbaxani (2000) suggest that IT resources can serve as the building blocks for business processes to form capabilities and that the firm's ability to enhance innovation capabilities leads to a competitive advantage. Therefore, IT can be a source of competitive advantage when IT is accumulated into more sophisticated IT resources bundles that build the entry barrier and, thus, are not rapidly replicated by competitors (Dierickx et al. 1989). For example, combining hardware and software assets to create a flexible and sophisticated IT infrastructure can be inimitable because creating such an infrastructure requires carefully melding technology components to fit the firm needs and priorities (Duncan 1995; Ross et al. 1996).. 立. ‧. ‧ 國. 學. IT capabilities. 政治大. sit. y. Nat. Some researchers have framed the discussion in terms of IT capabilities, which refer to the ability to deploy and mobilize IT-based resources (Bharadwaj 2000). Much research have argued that. n. al. er. io. managing IT is a capability that can create superior performance and provide organizations a competitive advantage (Bharadwaj 2000; Dehning et al. 2003; Santhanam et al. 2003). Firms are heterogeneous in developing and nurturing IT capabilities, therefore there’re likely to have different potential in leveraging IS for their competitiveness (Peteraf 1993). (Ross, Beath, and Goodhue 1996) provide illustrative case examples to underscore the idea that a firm’s IT capability can indeed provide competitive advantage and enhance firms’ performance. In sum, a firm with valuable, rare, and costly to imitate IT capability may be able to be leveraged to realize the full competitive potential of IT resources like technical IT skills, IT infrastructure. There are two perspectives to help us deeply examine the how IT capabilities are strategic consideration in service innovation: the resource-picking and capability-building (Makadok 2001). Resource–picking mechanism creates economic rents when firm effectively than others in selecting resource. Similarly, firms that have superior capabilities do better on acquiring critical resource. This argues the heterogeneity in performance is due to the ownership of resource that have differential productivity(Barney 1986). In other hand, capability-building refers to the ability of firms to build unique competencies and capabilities that can leverage their resource. This mechanism asserts that firms create differentiations by being more effective than competitors at deploying, configuring resources. The distinction between the two mechanisms-resource-picking and capability-building-also has other important. Ch. engchi. 6. i n U. v.

(12) theoretical, empirical, and normative implication it cuts directly to the core of the rent-creation process, and the role of managers in that process (Makadok 2001). Now comes to the question: what are the important IT capabilities? From the literature, we found varied classification scheme. For example, Feeny, Edwards and s Simpson (1992) identified nine critical IS capabilities—leadership, business systems thinking, relationship building, architecture planning, making technology work, informed buying, contract facilitation, contract monitoring, and vendor development—and used anecdotal evidence to argue that these capabilities can have a direct effect on firm performance. IT infrastructures refer to the system that served as the fundamental system that enable the information processing, integration, coordination, and moreover collaboration for the business purpose (Broadbent et al. 1999). The accumulated experience on building up the IT infrastructure creates more sustained advantage than the IT itself because the immobilized capability of management of IT in use that can further be utilized in other new service innovation. When a firm introduces a strategic initiative that employs reusable technology, it contributes to the development of an infrastructure that can be leveraged in the future by the initiative, through improvements, or by other initiatives (Barton et al. 1992; Broadbent et al. 1999). IT infrastructure served as the shared infrastructure that can facilitate the interaction and communication among the stakeholders in the value network which create the integrated value by the streamlining and timely information process. IS planning, a greater convergence between IS and business managers on IT priorities can be achieved (Christianse et al. 2002). Such convergence enables the synergistic integration of IT and business knowledge, which in turn improves the fulfillment and development of IT-enabled service innovation (Clark et al. 1997). IS planning is an important process that enables organizations to identify business priorities and ensure that IS goals and initiatives are aligned with business priorities. IT business experience allows a firm the ability to integrate IT strategy and business strategy, develop reliable and cost-effective systems for the business, and anticipate business needs sooner than the competitors. From the literature, we suggest the main IT capability for achieving the IT-enabled service innovation. The first one is the opportunity sensing which refers to the capability to envision future innovation and seize the opportunity by IT development. The innovation developing involves both managerial skill and IT skill cooperated to launch innovation efficiently thus differentiate from competitors. The system implementing capability refers to the robust systems supporting business process including information processing, integration, coordination, and moreover collaboration in service value network. Regarding the relationship building capability, it refers to creating tight relationship with partners that position firms in more central and leading role in the value network and thereby obtain strong bargaining power to rule the competition and cooperation. Lastly, the capability to sustain the competitive advantages derived from creating entry barriers in terms of the intelligent property. The review of IT capabilities is summarized in Table 2.1.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 7. i n U. v.

(13) Table 2.1 Summary of IT Capability IT capability. Opportunity Sensing. Innovation Developing. Argument. IS Mangers.  The ability of IS managers to understand how technologies can and should be used, as well as the envision the emerging technologies and trends that allow a firm to quickly take advantage of new advances(Zaheer et al. 1997). IS planning.  Greater convergence between IS and business managers on IT priorities can be achieved to support share information across different functions, innovate and exploit business opportunities, and the flexibility to respond to changes in business strategy(Christianse et al. 2002). Managerial IT skills.  Managerial IT skills and IT business experiences are thought to significantly reduce the costs and lead times associated with innovation development (Bharadwaj 2000).. Business experience.  IT business experience allows a firm the ability to integrate IT strategy and business strategy, develop reliable and cost-effective systems for the business, and anticipate business needs sooner than the competitors. (Kearns et al. 2003). IT skills and business expertise.  IT groups' business expertise, in combination with IT skills, directly determines the firm's ability to rapidly develop and deploy critical systems for the long-term competitive advantage (Clark et al. 1997).. System collaboration.  IT System that served as the fundamental system that enable the information processing, integration, coordination, and moreover collaboration for continuous innovation development. (Broadbent et al. 1999). 立. 政治大. 學. ‧ 國. System Implementing. Aspect. Enterprise system.  Having enterprise wide architecture allowed linking independently developed systems, reducing disparities and creating purchasing economies(Weill et al. 2002).. y. sit. er.  Through supply chain management systems(SCMS) or Interorganizational systems (IOS), firms obtain the intangible relationship asset as the powerful means to position themselves strategically by creating exit barriers for the participants in the value network(Subramani 2004). io. Inter firms systems. ‧.  Shared IT infrastructure contribute to the tight relationship among firms in terms of the infrastructure connecting, information processing thereby leads to cooperation and collaboration s and reduces the monitoring cost and increases the effectiveness of the coordination among organizations(Bhatt et al. 2005).. Nat. Relationship Building. IT infrastructure. al. n. v i n C cannot be easily transferred, U such as corporate-level knowledge assets  Some IS skillsh e ntechnology g c h i integration (Bharadwaj 2000) and skills (Feeny et al 1998), and, thus,. Advantages Sustaining. IT Integration skills Intelligent property. these resources can become a source of sustained competitive advantage.  Deployment of intelligential property sustain the advantages derived from IT-based service innovation by preventing rivals from imitation quickly and deterring the progress in the innovation(McGahan et al. 2006). To summarize the IT resource and capabilities literature , this research views that it is the firms’ heterogeneous capabilities in managing IT resources that make firms differentiate and have superior performance in competitive environment even when the same IT-related resource homogeneously distributed due to the imitation. Moreover the IT capability involve the ability to exploit the non-IT related resource such as strategic IT planning, alignment with business strategy which require more than IT resource itself that can render. Therefore, we will take the IT capabilities rather IT resources as the unit of analysis to more closely examine firms’ strategy toward IT-enabled service initiatives. 8.

(14) Complementary Resource Whereas these studies posit a direct relationship between IS resources/capabilities and firm performance, others have questioned the direct-effect argument. They further argued and emphasized that IS resources/capabilities are likely to create and sustained competitive advantages only when they are deployed to create unique complementarities with other firm resources (Clemons et al. 1991; Powell et al. 1997). This view also follows the same logic in resource based view, that the interaction of complementary resources, which can be ambiguous, thus enhances the value of all resources, making it difficult for competitors to imitate. Hence, IT assets by themselves may not provide much direct value but, when combined with other organizational practices, enable unique combinations of organizational capabilities leading to superior performance (Zhu et al. 2002). Regarding how resource complementarity can contribute competitive advantage, there are two perspectives toward resource complementarities. First, firm resources are considered complementary when the presence of one resource enhances the value or effect of another resource. Another perspective conceptualizes resource complementarity based on how resources are channeled and utilized. It is not the copresence of resources or capabilities that results in complementarities. Rather, firms have choices about how resources/capabilities are deployed. Complementarities results when resources/capabilities are used in a mutually cooperating and reinforcing manner. In this research, we regard the latter perspective which is more appropriate to our research subject on how resource and capabilities be configured and cooperated by firm’s manipulation and deployment. While the complementarities between IS assets and other firm resources have been emphasized, limited work has been undertaken to examine the effects of complementarities on firm performance (Ravichandran et al. 2005). In our study, we consider complementary resource as the resource which can be leveraged and incorporated with IT capability together to facilitate the IT-enabled innovation and thereby rendering sustained competitive advantages by the firms’ deployment on the resource endowments. We classify complementary resources into three categories based on Keen’s (1991) classification scheme: human, organization, and external linkages. Table 2.2 lists various complementary resources suggested in previous research.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 9. i n U. v.

(15) Table 2.2 Summary of Complementary Resource. Human. Organizational. Aspect. Argument. Front-line employee.  Gaining insight about client needs and opportunities (De Brentani 2001).. Multifunctional teams.  Cross-functional teams contribute to overall effectiveness, and problem-solving capability and performance (Froehle et al. 2000).. Senior manager’s commitment.  Support or commitment from senior managers are a necessary condition for innovation to thrive (Amabile et al. 1996).. Open culture.  Sharing and freedom to self developing have a positive effect on the propensity of an organization to be innovative. (Ahmed 1998).. Brand differentiation.  Customers tend to choose more popular service firms to ensure the quality of service and low risk perceived.(Berry et al. 2006). Business process.  Activities underlying value generating processes (transforming inputs to outputs). Inbound logistics, manufacturing (Melville et al. 2004). (Routines, value chain management ). 立 Reward system.  Reward systems and mechanisms can stimulate and encourage the idea generation and prosper the culture to innovate (McGourthy et al. 1996).. Sharing resource.  Conserve resources and share risks and as opportunities for gaining new competencies (Hagedoorn 1993).. Trusts with suppliers.  Open and trusting relationship is a key enabler of many innovations (Holland et al. 1992).. Nat. y. ‧. ‧ 國. 學. Position in value network. io.  Network position refers to a firm’s positional ranking in its inter-firm networks which influence the bargain power, innovation, and cooperative strategies (Washington et al. 2005; (Ahuja 2000). sit. External Linkages. 政治大.  Firm executes numerous business processes to achieve its strategic objectives, thereby providing a range of opportunities for innovation discovery, execution thus creating more business value (Basu et al. 2003). n. al. er. Category. i n U. v.  Firms with superior network position may be better able to exploit their internal capabilities to enhance their performance(Zaheer et al. 2005). Ch. engchi. Relationship with partners in value network.  In business markets, it became apparent that cooperative buyer–seller relationships can be the source of value creation (Anderson et al. 1994). Customer’s involvement.  Customers are viewed as ‘‘co-producers’’ of the service, their presence, evaluation, and feedback are key elements for improving service quality(Parasuraman 2000)..  Increased requirements for closer relationship with suppliers and more frequent iterations contribute not only to increasing the benefits to from greater experience with the new service , but also to reducing the ease with which later rivals can imitate this progress (Rivkin 2000; (Adner et al. 2010).  An intimate relationship with customers ensures the long-term profit.(Magnusson 2003). 10.

(16) 2.3 Dynamic Capability The resource-based view on resources and capabilities provide a thorough examination of how and why firms can leverage IT and other resources to gain a competitive advantage. However, in rapidly changing business environments that are open to global competition, it requires more than the ownership of difficult to replicate assets to engage in innovation and sustainable advantages. It also requires unique and difficult to replicate dynamic capabilities. Dynamic capabilities provide a view different from the resource-based view on taking external variables into consideration on how an organization reacts to competition. By definition, dynamic capability is the ability of a firm to integrate, build, and reconfigure internal and external competences to address a rapidly changing environment (Teece et al. 1997). Specifically, Teece et al. (1997) proposed the following three organizational and managerial processes as core elements of dynamic capabilities: coordinating and integrating; learning; and reconfiguring. Furthermore, other researchers have suggested that dynamic capabilities also encourage and facilitate firm effectiveness and provide a firm competitive advantage (Zollo et al. 2002). The concept of dynamic capabilities (Teece et al. 1997) has attracted increasing attention (Winter 2003; Zollo et al. 2002; Zott 2003). Teece et al. (2007) offered more insight about the approach of capabilities that give competitive advantages. They suggest that dynamic capabilities can be disaggregated into the capacity for the following reasons: (1) to sense and shape opportunities and threats, (2) to seize opportunities, and (3) to maintain competitiveness by enhancing, combining, protecting, and reconfiguring the intangible and tangible assets of the business when necessary. For example, the value of a resource will be dependent upon the firm's combination of resources and the path that the firm is following. Furthermore, dynamic capability is a learned and stable pattern of collective activity through which the organization systematically generates and modifies its operating routines in pursuit of improved effectiveness. Furthermore, some researchers view the ability of deploying IT as the dynamic capability. For example, the ability of a firm to leverage its IT capabilities to develop closer relationships and create flexible competencies represents dynamic capabilities that can lead to improved customer value (Sambamurthy et al. 2003; Sambamurthy et al. 2000). In summary, the rationale of dynamic capability is that resource-based view has not adequately explained how and why certain firms have competitive advantage in situations of rapid and unpredictable change (Eisenhardt et al. 2000). Moreover, dynamically competitive enterprises do not just build defenses to competition. They also help shape competition and marketplace outcomes through innovation. From this perspective, strategic choice is how a firm accumulates its technological assets due to path-dependent processes of investments, learning, and decision-making that the firm adopts over time. In particular, this approach mainly emphasizes the entire mechanism based on path dependencies by which firms accumulate and refigure new resources and capabilities to respond to the highly competitive environment. The summary of definition and arguments from extant literature regarding dynamic capability is presented in Table 2.3.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 11. i n U. v.

(17) Summary After a thorough literature search, we comparatively discovered that the resource-based view stresses the selection of resources whereas dynamic capabilities focus on capabilities for resource development and configuration. Accordingly, these two theories suggest that for firms seeking a sustained competitive advantage, the firms should understand what resources are critical and deserve to be involved in the strategy decision making. Based these theories, we developed a conceptual model to examine the strategies of firms toward competitive service innovations. As depicted in Figure 2.1, we suggest that these long-term competitive dynamic capabilities are derived from a cyclical process of integration, learning, and reconfiguration. Moreover, IT capabilities and complementary resources are the critical resources that firms should take into consideration in the process of sustaining the IT-enabled business innovations.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Figure 2.1 Perspective Toward Sustaining Business Innovation. 12.

(18) Table 2.3 Definition and Arguments about Dynamic Capability Dynamic Capability (Teece et al. 1997). “The firm’s ability to integrate, builds, and reconfigures internal and external competencies to address rapidly changing environments. Dynamic capabilities thus reflect a firm’s ability to achieve new and innovative forms of competitive advantage given path dependencies and market positions”. (Eisenhardt et al. 2000). market change.” (Zott 2003). 政治大. “The firm’s processes that use resources – especially the processes to integrate, reconfigure, gain and release resources – to match and even create. 立. Dynamic capabilities are likely embedded in organizational knowledge processes and then are directed toward organizational change and evolution,. Position. 學. The current specific endowments of technology, intellectual property, complementary assets. Customer base, and its external relationship with. ‧. suppliers and complementary. Nat. Process. y. (Teece et al. 1997). ‧ 國. and also enable organization to reconfigure its resource base and adapt to changing market conditions in order to achieve a competitive advantage. (Teece et al. 1997). The way things are done in the firm, or what might be referred to as its routines, or patterns of current practice and learning. al. er. sit. Sustainable competitive advantages are created from the way activities fit and reinforce one another. io. (Miller et al. 1996). (Teece et al. 1997). Strategic alternatives available to the firm, and the presence or absence of increasing returns and attendant path dependencies. (Siggelkow 2001). Configuration is the result of a set of interdependent managerial choices concerning human, technical and financial resource allocation, investment. n. 1999).. iv n C The uniqueness of such a configuration rests not only onhwhich activities a company i U performs and how it configures each of them, but also on how e h n c g such activities relate to one another. (Whittington et al.. Path. and policies in key business processes such as production, marketing, purchasing, new product development, and human resource management (Teece 2007).. Integrating external and internal knowledge is crucial of dynamic capabilities for sustainable competitive advantage 13.

(19) CHAPTER 3 RESEARCH METHODOLOGY 3.1 Case Study Case study research have been recognized as having gained acceptance over the past decade in the IS field (Benbasat et al. 1987; Orlikowski et al. 1991). Moreover, there is a growing tradition o use qualitative research approaches to study information technology (IT) phenomena(e.g., (Trauth et al. 2000). In order to explore the strategic use of IT from the perspective of the contexts in which firms are situated, we use in-depth case studies to examine the heterogeneous resources and capabilities possessed by firms and interpret the behavior or actions undertaken by firms. To better understanding the configuration and interaction of different critical resource and capabilities, we take the case study which is useful when a phenomenon is broad and complex, when a holistic, in-depth investigation is needed, and when a phenomenon cannot be studied outside the context in which it occurs(Bonoma 1985). Hence, holistic investigation which represents a key characteristic of case research, suits well our need to understand the complex and ubiquitous interactions among strategy, resource, capabilities.. 立. ‧ 國. 學. Multi Case Design. 政治大. ‧. According to Yin(1994) , in a multiple-case design, the selection should follow a literal replication logic (conditions of the case lead to predicting the same results) or a theoretical replication logic (conditions of the case lead to predicting contrasting results). We adopt the literal replication logic in multi case design since the market is mature and with few potential entrants. Besides, we choose multi case design with the aim to demonstrate that the phenomena were not industry-specific thereby provide more generable results and managerial implication(Dubé et al. 2003; Yin 1994).. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. Case Selection In today’s highly competitive retail environment, retailers are forced to differentiate themselves through pursuit of service-oriented business rather than focusing on merchandise and lower prices. Such differentiation strategies are common in the convenience-store industry in Taiwan. Service firms tend to be less likely than manufacturers to claim implemented technologies either in the form of advanced machinery and equipment or in the form of intellectual property (Miozzo et al. 2001). However, we found that firms in the convenience-store industry in Taiwan are proactively introducing IT, not only to enhance their efficiency but also to differentiate themselves using a greater variety of value-added services enabled by IT investments. In this study, we use multiple media kiosk (MMK) as an example to describe the strategies used by firms in the market. MMKs provide convenient means of payment for other services such as overnight delivery, banking, parking fees, or event tickets. Through combined adoption of different technologies, firms are capable of 14.

(20) creating new services markets such as one-day delivery, or fresh food offering. Furthermore, these innovations in services also dramatically changed customer behavior and the rules of competition in the market. The question of how firms innovate such services is thus well worth exploring. The background profile of four companies is presented in Table 3.1. Table 3.1 Profile of Studied Companies in Taiwan’s Convenience Store Industry Company. Company A. Company B. Company C. Company D. Founded time. 1978. 1988. 1989. 1988. Number of stores. 4,800. 2,324. 1,300. 825. 4,421.21. 1,145.45. 554.54. 272.73. Revenue(US$M). We examined the telecommunication industry in Taiwan because the industries are equally shared by three companies and they heavily launch IT-based service innovation to compete and search for sales growth and market shares. The basic background of companies in telecommunication is illustrated in Table 3.2, which contains the information about their business service provision and their recent market shares. In 1996, with the regulation of law in telecommunication, the telecommunication industry went into the liberalization which gave authority to operation in related services. The main objective of the liberalization of the telecommunications business has been to relieve the control of telecommunications operators, opening up the market, through a market competition mechanism for telecommunications carriers to strengthen R&D, to develop new services and set reasonable telecommunications charges, and to improve the quality of telecommunications services and to reduce the user burden.. 立. 政治大. ‧. ‧ 國. 學. er. io. sit. y. Nat. al. v. n. Table 3.2 Profile of Studied Companies in Taiwan’s Telecommunication Industry. i CompanyC E Company F n hengchi U Corporatization 1997. Founded Time. Company G 1997. in 1996 Business. ADSL. O. O. O. Services. Cable. X. O(Taiwan Broadband). X. Telecom. O. Acquired two regional. Merged an islandwide. mobile operators,. mobile operator in 2004. Market Share. ISP. O(Hinet). X. O(SeedNet). Subscribers. 37%. 25.0%. 26%. (2009) Source: MIC (2009) Report of market share analysis of telecommunication market industry 2009. 15.

(21) 3.2 Data Collection We use primary data from interviews of each firm within the industry and secondary data from newspapers and trade magazines to assess the IT strategies of firms in service innovation. Several interviews were held to provide a deeper understanding of each firm’s strategy. The data collection involved five semi-structured interviews so far. The questions mainly focus on the service innovation and the strategic choice. Among those interviewed were IT manger, assistant managers in general manger office who responsible for the new initiatives and strategic planning, and the CEO of company D (see table 3.3). Table 3.3 Profile of Interviews Company A. Department. Job Title. Interview time. General manager office. Assistant manager. 3hrs. Information division. Manager. 治 manager 政 Assistant 大 Assistant manager. 1.5hrs. Manager. 2.5hrs. B. General manager office. C. General manager office. 2.5hrs. 學. ‧ 國. 立 Human resources department. 2hrs. General manager office. General manager(CEO). 3hrs. E. Telecommunication Laboratory. Assistant Researcher. 1.5hrs. F. Product Technical Department. Assistant manager. 2hrs. Customer Retention and Added service. Administrator. ‧. D. y. Business Strategic Decision-Making. Manager. 3.3 Data Analysis. al. n. Information office. Ch. engchi. sit. Senior Engineer. io. Internet Business. er. G. Nat. marketing Department. 2hrs. i n U. 1.5hrs 1.5hrs. v. The data analysis follows the sequence as the Table 3.4 shows. The method and source comes from mostly the interview, and comment from company, and historical data review. The main analyzed target is the strategy firms applied and the resource reconfiguration process. We firstly provide the overview of the industry and some explanation of the IT-enabled service innovations. To understand the strategy they applied we verify their comment from the interview and also some documentation from the secondary on their strategy orientation and the competitive actions undertook in the service innovation achievement. The analysis of the strategy is based on the examination the endowment of the two categories of critical resource, the complementary resource and the IT capability. We also try to find out the possible events that drive them to change their strategy and the associated concern on the resource acquirement to fulfill the strategy. Generally, our analysis of strategy included service innovation case-based description, interpretation in the strategic orientation in terms of their initial resource set, turning point or event that drives them change and 16.

(22) the afterword resource set after they undertook certain action on the resource (e.g. deployment, acquisition, exploitation ). We also analyzed the resource reconfiguration process to discover the how these resources are reconfigurated and what the impact will occur during the process of achieving the specific strategy. The analysis of cases of different IT-enabled service innovation was presented in the Appendix Table A.1 and Table A.2. These tables illustrated firm’s resource reconfiguration in the three stages of the introduction IT-enabled service innovation: initial, truing point, and afterword situation.. Table 3.4 Step of Data Analysis. Analysis step. Analyzed Target. Method and Source. Context Analysis. Industry-level. Documentation. Firm-level Strategy Identification. 立. innovation. Critical and Strategic Resource. Trade Magazine. 學. ‧ 國. IT Capabilities and Resource. Comment from company Historical Data Review. the strategy. Interview. Examine the reconfiguration. How resource be reconfigured, integrated. Historical Data Review. of resources. to become of new bundle of resource and. Interview. y. sit. capability. io. n. al. er. change. ‧. The time and situation when they change. Nat. Turning point as strategies. 政治大Interview. Strategies toward IT-enabled service. Ch. engchi. 17. i n U. v.

(23) CHAPTER 4 CASE STUDIES 4.1 Convenience Store Industry IT enabled Service Innovation SCMS (Supply Chain Management System) The supply chain management system applied in the convenience store consists of a series of systems as the market evolution. As the system evolves to be more advanced, the function can be applied in a different business unit. For example, the POS (Point of Sales I) basically served as the transaction record and cash register. In the next generation of POS, it added the feature with customer profiles collection, process, and the analysis which can be used as the reference of sales campaign idea and other marketing activities. Beside the function server for the front line operation, many firms have adopted the corroborative systems in which information processing among logistic center and products suppliers gathers and are processed. With strong IT infrastructure which is comprised of these connected information systems, they can facilitate the corroborative commerce, such as collaborative replenishment, vendor inventory management and the enhancement of the distribution capability.. 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. MMK (Multi Media Kiosk) The MMK is that which acts as an interface for user interaction, and thereby provides several services such as banking bill payment, reward systems, scanning output printing, various kinds of tickets purchasing, downloading the files etc. It is any type of large computer terminal, most often located in a public place, which the general public may use for various purposes. An ATM is a type of multimedia kiosk, for instance; a user can walk up to the terminal, insert a debit card, and withdraw money from an account without needing to interact with a bank teller or other employee. Multimedia kiosks are often found in places such as supermarkets, shopping malls, airports, and convenience stores, among others, and most feature convenient touch screens.. Ch. engchi. i n U. v. E-Wallet (Electronic Wallet) The application of E-wallet, which is also called "electronic money", refers to electronic transactions instead of cash to the system, such as electronic wallets, all kinds of stored value cards, electronic coupons, and stored value tickets and so on. At present, more attention to the electronic money application comes as a mobile device integration method of payment, and such applications allow consumers time to delay the actual payment, and the consumption through a single device anytime or anywhere, saves one from carrying a variety of payment troubles. Now widely used e-wallet functions with mobile phones, and more use of NFC technology is often used as a ticket or a tool for small payments. 18.

(24) Intelligent Stores The Intelligent Store, developed in Taiwan in 1995, is one of the projects launched by the Department of Commerce Division III, who assisted the convenience store to the introduction of innovative services. The store comprises of physical goods and virtual information processing without any staff in the stores. In the front part, through the convenient front-end machine, provides a more convenient self-consumption; in the back the use of smart active control is for background operation, "a full range of background intelligent control" that enable the logistics, cash flow, customer service, system integration, control, communications, facilities and security and other machines.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 19. i n U. v.

(25) 4.1.1 Company A IT capability IT infrastructure. Company A has the strong and robust IT infrastructure developed continuously to afford the distribution capability among suppliers, and the information transparency. The IT infrastructures include the Point of Sales System (POS) performing the data integration among all the stores and suppliers. The mature IT infrastructure underpins a firm’s competitive position by enabling initiatives such as cycle-time improvement, cross functional process coordination, and cross firms collaboration. The unified and integrated infrastructures shared among various stakeholders in the value network benefit the scalability and transparency, enabling the real-time coordination and collaboration within the value network. For example, the integration of the system with the existing platform creates the ability to afford the one-day delivery services. This service has greatly enabled the stores, suppliers and distributors to be more closely connected and well-informed, which has enabled quick logistics scheduling. The constantly developed and improved infrastructure requires the effort dedicated to a solution, which became the promise for the group enterprise to extend and the key capability to attain long-term advantages. The flexibility largely increases the capability of extending their existing infrastructure and system application to respond to future business needs. Spin-off information department. 立. 政治大. ‧. ‧ 國. 學. n. al. er. io. sit. y. Nat. After spinning off the information center into the independent firms, the center served as the specialized information technology provider for all the associated enterprises within the group. The redesign of the relationship between the organization and the IT department benefits in two perspectives. First, the integration of the IT resources, including employees and technology, turn IT group into a more focused and specialized organization to facilitate the efficient teamwork. Second, the spun-off organization share skill knowledge worker and specialized workers, also the structure of the spin-off company became the revenue creating department rather than the cost development. This action integrates the existing internal IT resources including the workers, knowledge, and that which empowered the operation and the authority toward the different IT investment.. Ch. engchi. i n U. v. IT business experience. IT business experience is one of the proposed IT capabilities which refer to the ability to align IT strategy and business strategy. It is recognized that the innovation not only involves the technical problem-solving process but also requires the capability to synthesize the value of the firm’s resource with the IT resource. The IT sector has put huge emphasis on the training of both planning and conceiving the IT with business thinking. This capability is crucial for the IT sector, because it contributes to the accumulation of not only the knowledge about the technology but about the comprehensive ability to think strategically for the business. Whereas physical assets and tangible resources can be replicated by competitors, the long term advantage often depends upon the expertise of the people in the organization 20.

(26) Complementary Resource Large customer-based Company A has accumulated the large customer base due to their widely coverage throughout the country as an early entrant into the industry. The economics of scales attributing to a large customer base creates sales growth and increases the bargaining power. While they obtain the financial capital such as cash flow, revenue, and profit from a huge customer base, they also leverage this resource to lock in their suppliers in the way of contracting the exclusive for service or products. Synthesis of value from group enterprise The resources of sharing within the group enterprise contribute to compounded benefits in two aspects. One is the resource reinforcement which represents the fact that value of resource will increase as the specified resource can be applied in different scenarios. Take the e-wallet as an example, where the more associated vendors and brands accept the card issued by Company A, and the customer can obtain more convenience. The other aspect is about the resource complementarities that create the synthesized value than can be obtained by their existing resource. For example, the strong distribution capability compensates for the inability of online books to sell websites for the products’ logistics. The resources contributed by the economics of scope are the broad extension of their service and products.. 立. 政治大. ‧ 國. 學. ‧. Innovation foresight by top managers Innovation foresight by top managers not only facilitates the innovation activities in the organization, but it also assures the attainment of long term advantages. According to the assistant manager of the General Managerial office in Company A, the CEO and the Chairman clearly understand the opportunity by sensing and identifying the key potential trend of future competition. This really provides the starting point of the process of formulation of a technological innovation. As assistant mangers mentioned the source of research on the business opportunities, he said as follows.. n. er. io. sit. y. Nat. al. Ch. engchi. i n U. v. “Regarding the assessment of investment, we regularly collect information from all the sources including executives visiting abroad, and a unit stands inside to search the latest related information, and some other journals, reports, or exchange information from private organization, etc”.. Marketing capability The strong marketing capability increases the customer’s retention and stickiness toward their brand. The intensively launched marketing campaigns provide the customer with a variety of products and exclusive services. These rapidly renewed marketing activities create a fresh image to the customer, thereby increasing the possibility of continued customer retention. The effect of marketing activities not only reduces the cost of customer sales, moreover they create the superior purchasing experience with surprises. This strong marketing capability, which stems from the marketing department, gives large boosts to their sales growth and accelerates the introduction of new technological innovation, which helps in understanding the acceptance or thought of the newly introduced IT-enabled service. 21.

(27) IT-enabled Service Innovation Supply Chain Management System Company A has developed the collaborated supply chain management systems which provide the strong capability on integrate and coordinate the information throughout their value network. Especially with information transparently, suppliers and vendor stores can facilitate the non out of stock replenishment capacity. The continuous introduce the facilities and upgrade the information processing systems such as POS, EOS, POS II. POS has four major advantages, first of all, for selling products and sluggish characteristics analysis of consumer goods for understanding the business district; second, to help adjust the shelf arrangement and the effective use of store space; Third, analysis of inventory data as orders and sales forecast information; finally, to reduce the error rate of accounts, time and manpower. In order to accurately grasp the consumer demand, Company A import second-generation POS service information system, and structure of the company powerful competitive intelligence, real-time invoicing per hour as the unit of information, the weather four times a day intelligence to multimedia display and real-time delivery of goods to centralized information. Therefore, the POS service information system receives 5 million documents daily regarding information consumption, the marketing department then can use these analyzed data to determine the introduction of marketing activities and adjust the set of product in stores. Through the capability of a strong and robust IT infrastructure to create a coordinating and collaborative process; they can play the central role in this service-value network thereby create well connected linkages and foster the tight relationship with their partners.. 立. 政治大. ‧. ‧ 國. 學. Nat. y. sit. n. al. er. io. Multi Media Kiosk (ibon) The MMK has been under development for about the past 5 years, starting in 2000. The plan came from top executives in reference to MMK (Multi Media Kiosk) which provides the new kind of. i n U. v. distribution of different services different from those products in the stores. However, at that time, they thought it was not mature enough to launch such an initiative, given the limited resources and uncertainty in the markets. Therefore, they did not put the development of ibon in the first priority. In this case, they chose not to be the first mover, which is their preferred strategy. Instead, they thought the introduction of this kind of new platform involved the consideration of the market environment and the costs on the hardware and software. Thus, they would rather launch innovation at the appropriate time with strong system function and robust platform and then keep up with the competitors later. Compatible with the appearance of small stores, using the interface more with the existing multifunction printers links and reserves the expanded scalability to meet future demand for more and more business opportunities. Implementation costs were over one billion, including the back-end part, network transmission, software, etc. Soon after the launch of ibon, Company C filed the infringement against Company A for copying their services on the kiosk. Due to the lawsuit, they could not aggressively develop related services and features, especially the bonus set of points which is claimed to be one of the patents of Company C. Nevertheless, they thought the better way is not to add more functions to the kiosk, but. Ch. engchi. 22.

(28) to enhance the utilization rate on the kiosk. The Assistant Manager Lee explained as follows: “We developed too many multifarious functions which have caused customers to be confused and have wondered what the services they can utilize. Therefore, we thought it would be better to offer simply a function such as the ticket booking that conveys a very clear image for customers to know that the our MMK is what customers can buy a ticket from. Perhaps it will be more effective than the numerous functions on increasing usages.” Later in 2008 they started to offer the ticket booking services, including traffic tickets and concert tickets. In particular, they have offered these services by exclusive contracts with ticket suppliers in an attempt to tie up customers. Taking the advantages of the large customer base, they always try to contract services in limited supply or exclusiveness. E-Commerce Company A has launched a catalog online site named “Uni catalog” to enter the e-commerce market. The Uni catalog commerce site has been in operation for pre-order goods and mail order products, mainly concentrating on the self-developed products of clothing, jewelry and personal goods. In order to increase the sales, they have introduced a variety of products and the rich experience on the customer relationship management and supply chain management from the strategic alliance with Nissen, which has been the popular catalog market company in Japan for 30 years. However, since then, the infrastructure such as the payment mechanism on the e-commerce site did not yet mature, resulting in customers’ concern on the security issue in the purchasing experience. They started to invest in more online market providers such as that of books.com, Rakuten, for making great use of the resource they had had such as the distribution capability, integrated sales systems. The most successful case is the merger of books.com, which is the online bookseller. After they obtained the books, they integrated the systems with books.com, together with their existing distribution system. This integration of the information and products affords the capability of providing the one-day delivery service, which has fostered their sales more than ever. The advantages stem from the organization to create the complementary which compensate the asset for the distribution and the customer buying experience. This resource complimentarity generated tremendous benefits, and has made books.com to become the largest online sellers in 2006. Later on with more alliance and cooperation with publishers and marketing campaigns have contributed to the sales surpassing the originally first bookseller with physical store and thus became the first bookseller all over Taiwan’s market. Combined with group resources, they integrated the virtual channels and physical channel in order to generate greater synergy by the IT systems. Specifically, the systems for supporting virtual channels include: mail order to stores, online shopping, local specialties of delivery services, and physical resources that include: Catalog, logistics, stores, cell phone, ATM, etc. These well developed IT systems aid them on the coordination throughout the entire transaction process.. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 23. i n U. v.

(29) E-Wallet (icash) Operational by the end of 2004, they observed that the use of their electronic tools(i-cash) to paying customers and their customers will be priced higher than the average for more than 5 NT dollars. Even with a vast customer base, Company A still attempted to use i-cash to enhance the adhesion degree of customers and increase market share. According to the data, the customers who use i-cash to pay the bill have more on each transaction by 5 dollars. However, they faced two challenges stemming from the external conditions. Firstly, the government's statute of limitations for the electronic wallet limited the scope of application and constrained it to only micro payments (no more than 450NT per transaction). The second one is that there was already another similar electronic wallet: the easy card, which had vast numbers of users in northern Taiwan. The easy card is issued by the Easy Card Company and was used as payment tool in Taipei’s public transportation facilities (i.e. Metro Rail Transportation and bus). Regarding the e-wallet payment tool, both sides have their advantages and disadvantages. While the advantage of i-cash is the numerous products and the shops provided throughout Taiwan, Easy Card is only limited to the northern region and can only be paid as a traffic tool. But the Easy Card Company was earlier adopted by its customers and is quicker in pay based on the RFID payment mechanism. However, there is no necessity for competition but for cooperation. The idea of a mutual alliance aroused from the CEO of the Easy Card Company, who sought to extend their existing business line into more areas to be the source of revenue generation. In this cooperation with e-wallet, each side gained their benefits. Company A obtained a large amount of customers and the Easy Card Company extended their market throughout Taiwan. Company A will continuously increase the numbers of alliances, and will provide more associated vendors to customers who can apply the icash. 立. 政治大. ‧. ‧ 國. 學. n. er. io. sit. y. Nat. al. Ch. engchi. 24. i n U. v.