Validating Late Mover Advantages in e-commerce: Evidence from Selected Companies - Research Proposal Example

Research Proposal: Validating Late Mover Advantages in e-commerce: Evidence from Selected Companies Table of Contents Table of Contents 1 Title 3 Background 3 Objective 4 Project Aim 4 Research Hypothesis 5 Research Questions 5 Ethical Considerations 6 Literature Review 6 Research Methodology 9 Phenomenological Paradigm 9 Positive Paradigm 9 Deductive vs. Inductive Research 10 Data Collection Techniques 10 Proposed Research Methodology 11 Primary Data Collection 11 Survey Questionnaire 11 Research Methodology Limitations 12 Proposed Structure of Report 13 Time Schedule 16 References 17 Title Validating Late Mover Advantages in e-commerce: Evidence from Selected Companies Background E-commerce is a global market place that is characterized as the one with high competition and rivalry between competing companies. The market dynamics have been drastically changed over the years as marketing and selling over the internet has become an integral part of business strategies. The changing trends in the consumer behaviour and attitude towards shopping at their own ease has pushed businesses to rethink of their strategies and approach the business in an entire new way to which they may not be accustomed to. E-commerce has allowed firms to move away from traditional ways of business by overcoming the constraints including geographical, market selection and targeting, time, cost of operations, marketing and branding and restrictions over communications with customers. E-commerce poses greater challenges for companies to change and adapt to the needs of the disequilibrium that is continuously created within the online market space. The challenges faced by the companies are in the form of “weak intellectual property rights, technical interdependence, technical uncertainties and rapid technical innovation” (Hays & Sadeddin, 2006). Companies need to adapt to the newer technologies in order to gain and sustain their position amongst their competitors. The entire paradigm of e-commerce is based on the ability of companies to improvise such technologies and methodologies that actually create customer traffic to their online website and generate sales. Companies making entry into e-commerce are either regarded as first movers or late movers. First movers are characterized by their unique business model, business idea or strategy that allows them to attract large number of customers. Such companies work on innovativeness and are able to establish strong position in the market by creating a brand for themselves and securing close ties with suppliers, customers, distribution channels and promoters. These companies strive to keep ahead of others on the learning curve and they are able to adapt to the changing business environment by exploring new technologies. However, it is argued that the presence of first movers does not surely imply that other companies will not succeed. These companies are regarded as late movers in e-commerce that rely on an “imitating strategy” (Hays & Sadeddin, 2006). Their strategy is based on their learning from the existing business models and developing better and improved versions of new system that could actually help them in achieving higher competitive advantage and business value. The proposed research will focus on validating the advantages of late movers in e-commerce. The proposed research will attempt to gather useful evidence from two companies including: Barnes and Noble that is a publicly listed company operating as a late mover in online books distribution market and Walgreens that is one of the largest pharmaceutical companies that made an entry into e-commerce as a late mover in the industry. Objective The objective of the proposed research is investigate evidence validating late mover Advantages in e-commerce. Project Aim Based on the proposed objective of the research the project aim is set out to focus on the late mover advantage for companies that rely heavily on e-commerce for their conducting their businesses. The research will focus on the relationships of such companies with their suppliers, buyers, customers and other participants involved in e-commerce business such as payment companies, banks, transporters etc. These relationships will be assessed for their support and impact on late movers in e-commerce business. The research will also determine the impact of focus on the shareholders’ value derived from their investments in such late movers in e-commerce. The shareholders’ value will be estimated by calculating their return on investment (ROI). The research will conduct its investigation by using examples of companies namely Barnes and Noble, and Walgreens from the industry and evaluate their businesses for validating advantages of late movers in e-commerce. Research Hypothesis The proposed research will investigate information from different sources to accept or reject the following hypotheses set out as a basis of research. H0: Late Movers in e-commerce do achieve competitive advantage and high shareholders’ value through dedicated e-commerce approach. H1: Late Movers in e-commerce do not achieve competitive advantage in comparison to First Movers in e-commerce. Research Questions The proposed research with a focus on validating late movers’ advantages in e-commerce will be based on the following research questions and findings suitable answers for them via useful data collection. 1. What strategies late movers use for entering e-commerce? 2. How late movers establish and manage relationships with its suppliers, buyers, customers and other parties involved? 3. How late movers can achieve and sustain competitive advantage in e-commerce? 4. Do late movers achieve an increase in shareholders’ value? Ethical Considerations The proposed research has certain ethical considerations that need to be identified clearly. The most crucial consideration that requires attention is that the purpose of the research and the research questions set out are not exhaustive and the scope of the research is limited to the researchers’ own interpretative skills pertaining to data collection and knowledge of the subject topic. The researcher will rely upon the availability of data and guidance from the instructor to gather relevant information and present in a manner that it serves the purpose of the proposed research that is validate advantages late movers can achieve in e-commerce objectively. Furthermore, the researcher fully understands the severity of plagiarism and hereby undertakes the university guidelines for submission of report will be completely adhered to. Literature Review The theoretical framework for the proposed research could be driven from the traditional theories presented by Porter (1985) and Ghemawat (1986) that are of the opinion that the competitive advantage achieved by the early movers in the market can be sustained. However, due to the changing business environment, it is increasingly characterized as hypercompetitive and highly globalized the traditional theories have been challenged as the trend in achieving competitive advantage has shifted from physical markets and assets to “invisible” assets (Itami, 1987). These assets are identified as being more mobile, easily imitated, and easily substituted (Hays & Sadeddin, 2006). Hays & Sadeddin (2006) suggest that the characteristics and conditions prevailing in e-commerce are excellent representation of the changing business theory. Epstein (2004) in his books suggests that with the existence of early movers in e-commerce it is not true that late movers cannot achieve competitive advantage. He implies that with greater investment and effort late movers can push early movers to rethink of their business strategies and even force them to exit the market. Furthermore, being a late mover in e-commerce does not surely mean that such companies cannot opt to provide “a particular service, a combination of services, or other unique value propositions” (p.8). The role of the senior management in allowing higher investment and their willingness to try new ideas on the basis of the assessment of the existing market is very much needed for late movers to succeed. However, it is clear from corporate evidence that companies that have been traditional business doers for many years are faced with difficulties for convincing their customers to display the same response to their online systems. Askegar & Columbus (2002) in their study of late movers in e-commerce suggest that the late movers can achieve better outcome from their decision of entering the market and achieving a competitive position in the market by focusing their activities on developing most suitable pricing strategy and ensure integration and work flow across their websites. Through effective pricing strategy they can actually achieve synchronization and attract customers who are faced with low switching barriers. Integration of systems allows them to become innovators in the existing business models that in fact help them in order capture, management and completion. It is considered as one factor which allows late movers to challenge first movers and benefit for gaining larger market share. Furthermore, late movers in e-commerce who focus their strategies of building enhanced functionality of systems based on their learning from experiences of early movers tend to provide better information to their customers than their competitors and are able to achieve efficiencies at all stages of supply chain thus resulting in a strong competitive advantages. The impact of late movers on the business and profitability of first movers can be depicted as follows: Source: (Hill & Jones, 2004) Askegar & Columbus (2002) measured the effects of integration on pricing strategy and also on the value that shareholders could expect from their investments in late movers. For this purpose they use a measure of Return on Investment (ROI). Return on Investment (ROI) is a measure of net income to book value of assets and there are two alternative methods for calculating this value as given below: ROI = Net Income / Book Value of Assets OR ROI = Net Income + Interest (1-Tax Rate) / Book value of Assets Source: (Value Based Management, 2009) However, since the measure of ROI is based on net income it could undermine its effectiveness because of net income being considered as an unreliable performance measurement indicator (Value Based Management, 2009). It is further suggested that ROI can often lead to overstatement of economic value depending the length of project life, capitalization policy, depreciation policy, time lag between investment planning and generation of cash inflows and finally the growth rate of new investment (Value Based Management, 2009). Research Methodology Before conducting any research it is important to decide upon its research methodology. Research methodology not only affects the way information is gathered but also determines the achievability of the research objectives. Two research paradigms are evaluated in the following to arrive at the proposed research methodology. Phenomenological Paradigm This paradigm is based on qualitative research. Qualitative research is more commonly used to investigate and evaluate a particular human or social problem. It does not use statistical techniques to evaluate data but in fact it is more descriptive and depends upon researcher’s own interpretative skills. The data for qualitative research may be collected using different primary approaches. The analysis of data focuses on language, signs, meanings as well as investigative approaches adopted to test hypothesis. Qualitative approach is also advantageous as it allows more diverse set of responses to be included in the research (Ary, Jacobs, Razavieh, & Sorensen, 2009).   Positive Paradigm This paradigm is based on quantitative research. This methodology is based on numbers that are evaluated using statistical techniques. The quantitative research is typically conducted on a set of data, model, theory and hypothesis generation that is tested out using different variable models for measurement. The results from such research are presented as absolutes and less descriptive interpretation of findings (Ary, Jacobs, Razavieh, & Sorensen, 2009). Using quantitative approach empirical relationships and associations can also be studied using statistical model. Deductive vs. Inductive Research The deductive research approach makes a detailed overview of a specific hypothesis by setting out the research objective and then lay out specific purpose of the research that is then followed by investigative part of the research to conclude at the end that the hypothesis is either accepted or rejected. This approach presents a generalize conclusion that could be applied to specific subject case. On the other hand the inductive approach follows an opposite view where generalize conclusions are developed at the end of the research. This is based on a theoretical framework where specific facts are evaluated to make predictions for a large group (Taylor, Gautam, & Ghoshal, 2006). Data Collection Techniques The data for the research can be collected from primary sources and secondary sources. Primary sources may include survey questionnaire, case study, interview, focus group, observation etc. (Trochim, 2006). Whereas secondary sources includes books, journals, articles, studies, reports, websites etc. Each type of data collection technique needs to be assessed for its suitability and limitations before applying it to a particular research objective. Proposed Research Methodology The proposed research methodology considered most appropriate for achieving research objective is based upon qualitative research methodology using case study approach. Two companies are selected for review of their strategies as late movers in e-commerce. These companies will be used case studies to generalize the results and either accept or reject one of the research hypotheses set out in the previous section. The approach that will be used to draw results from the findings is inductive approach that involves generalization of the outcome of the research from selected companies to a larger companies’ database. The research will be gather information from both primary and secondary sources: Primary Data Collection The primary data for the proposed research will be gathered using a technique – survey questionnaire. The reasons for selecting survey questionnaire for this purpose are due to its advantages of clear presentation, understanding by respondents and collection of large number of responses in short time. However, it has certain disadvantages as well in terms of the misunderstanding of instructions, incomplete responses, and biasness in responses due to their own motives and intentions at the time of survey. Survey Questionnaire The survey questionnaire will be designed in such a way that it addresses all issues set out in the project aim (Trochim, 2006). Two sets of survey questionnaire will be designed and implemented for this research. One will aim at the companies’ perspective of their business whereas the other one will focus on customers’ view of the companies’ performance. There will be descriptive and multiple choice questions in both questionnaires. Targeted at the company, the questionnaire will initiate with first few questions regarding the company’s strategies, approach to e-commerce business and challenges it faces. The next set of questions will focus on the company’s relationships with different parties identified in the previous sections. Finally, the achievability and sustainability of competitive advantage by late movers will be addressed along with questions on the company’s performance and impact of its business on shareholders’ value. The second questionnaire will focus on questions aimed at customers of these companies to gather their responses on the company’s ability to meet their expectations and their relationship with the company. This will allow assessing the long term company-customer relationship for evaluating the business position of the companies under review. Sample Population The first questionnaire aimed at the companies under review will be send to the strategic managers of these companies or any other individual who is deemed fit for responding to the questions to be assigned by the companies. The second questionnaire aimed at customers of these companies will be send to customers to be selected randomly from a list of customers. A request letter will be sent to the companies to allow access to this list and selection will be simple made using MS Excel to draw random names. Research Methodology Limitations There are certain limitations to the selected research methodology that are presented in the following: The qualitative approach selected for this research suggests that the proposed research will be subject to the limitations of previous researches used for collecting useful information and there can be risks of errors that affected the outcome of previous studies. This is a limitation that can be generalized for any secondary source that may be used for the purpose of the proposed research. Moreover, the qualitative research does not provide statistical accuracy of the quantitative approach and its findings could therefore be of ambiguous nature. The use of survey questionnaire as a way of gathering primary data has its limitations that are already discussed in the previous section. In addition to these, alternative methods of data collection such as interview may have been considered however, it is suggested that obtaining permission for telephonic discussion with company’s representative may not be possible and it may waste valuable time. The random selection of customers as respondents has a limitation of the sample population not being reflective enough of the entire population. The margin of errors is high as returned questionnaires may be incomplete or have mistakes. Finally, there are limitations of time and cost. The research is allocated a limited time framework to be completed and therefore, it may not be possible for the researcher to cover all aspects of the subject topic. Furthermore, the researcher will not seek any external funding for carrying out the research and therefore all efforts will be made to keep the costs to minimum. Proposed Structure of Report Chapter 1 - Introduction The first chapter provides the background to context along with the objective and project aim of the proposed research. It also entails the research questions that will form the basis for acceptance or rejection of set research hypotheses. Also it will include the scope of research and ethics considerations. Chapter 2 – Literature Methodology The second chapter will provide extensive literature review that will involve analysis, cross-examination and elaboration of articles in peer reviewed publications to provide informative data on the subject being studied. Chapter 3 – Research Methodology The third chapter will serve as the section on various literatures pertaining to research methodology and presentation of the selected research methods. The purpose of this chapter will be to provide details of data collection techniques and sample population selected for the research along with their limitations. Chapter 4 – Findings This chapter provides details of findings from both primary research and secondary sources related to the business performance of late movers in e-commerce under review. These findings will be supported by tables and graphs. Chapter 5 – Analysis This chapter is crucial as it bridges between findings from the proposed research and review it for relevance with the previously published theoretical framework, literature and studies provided in Chapter 2. Chapter 6 – Conclusion This chapter will formulate important conclusions from the research and evaluate whether the research hypotheses set out for the proposed research will be accepted or rejected. In addition to these there will be recommendations for late movers to improve their business position and achieve stronger position in comparison to their competitors, particularly first movers. Time Schedule Tasks / Dates Preliminary Research Preparation of Research Proposal Submission of Research Proposal Chapter 1: Introduction Chapter 2: Literature Review Chapter 3: Research Methodology Chapter 4: Findings Chapter 5: Analysis Chapter 6: Conclusions and Recommendations Submission of First Draft Submission of Second Draft Submission of Final Report References Ary, D., Jacobs, L., Razavieh, A., & Sorensen, C. (2009). Introduction to Research in Education. New York: Cengage Learning. Askegar, V., & Columbus, L. (2002). Channel Management Best Practices: It’s All About Orders. Boston, MA: AMR Research. Epstein, M. J. (2004). Implementing e-commerce strategies: a guide to corporate success after the Dot.com bust. New York: Greenwood Publishing Group. Ghemawat, P. (1986). Sustainable advantage. Harvard Business Review, 64 (5), 53-58. Hays, J., & Sadeddin, K. (2006). Do the early birds get the Worms? Retrieved March 19, 2010, from Lake Head University: http://74.125.153.132/search?q=cache:qnDcwJ7QGkUJ:foba.lakeheadu.ca/serenko/5233/firstmover.ppt+late+mover+e-commerce&cd=5&hl=en&ct=clnk&gl=pk Hill, C., & Jones, G. (2004). Strategic Management “An Integrated Approach”. Boston, MA: Houghton Mifflin Company. Itami, H. (1987). Mobilizing Invisible Assets. Cambridge, MA: Harvard University Press. Porter, M. (1985). Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press. Saunders et al, M. (2007). Research Methods for Business Students. Essex: Pearson Education. Taylor, B., Gautam, A., & Ghoshal, T. (2006). Research Methodology: A Guide for Researchers in Management and Social Sciences. Delhi: PHI Learning Pvt. Ltd. Trochim, W. (2006). Types of Surveys. Retrieved March 19, 2010, from Available from: Research Methods Knowledge Base: http://www.socialresearchmethods.net/kb/survtype.php Value Based Management. (2009). Return on Investment (ROI). Retrieved March 19, 2010, from Value Based Management: http://www.valuebasedmanagement.net/methods_roi.html Read More