Golf Business, Lunch Business & Phone Business: Is New Zealand ready for e-Business?

Dr Kenneth R Deans [HREF 1], Senior Lecturer, Department of Marketing, [HREF 2] , University of Otago, [HREF 3] NEW ZEALAND. kdeans@business.otago.ac.nz

Mr Derek Nind, Director of Executive Education, School of Business, University of Otago, [HREF 3] NEW ZEALAND. dnind@business.otago.ac.nz

Ms Claire Murray, Marketing Department, L'Oreal, Auckland, NEW ZEALAND.

Abstract

The Internet offers firms a new medium to conduct business either for communication programmes, sales & logistics functions and / or to manage and enhance customer relationships (Deans, 2000). In most cases use of the Internet is complimentary in nature rather than in place of traditional strategies. Although Internet growth has slowed, it still has significant potential to impact on management, strategy and business design (Perrott, 2001). The Internet, through its connectivity, enables traditional businesses to deliver and operate faster, and link organisations and groups in a unique manner.

The research reported here investigated whether Electronic Retailing (e-tailing) businesses in New Zealand have developed the necessary resources and capabilities to compete in this new electronic environment. As the strategic management process is integral to the development of an e-business strategy Johnson and Scholes' (1997) strategic framework was used as a base for e-business strategic development and implementation.

In-depth interviews were carried out with four New Zealand businesses that have integrated e-business into their existing business strategy. The interviews explored the motivation and rationale behind e-business strategy as well as the 'how' of the transformation process. The findings indicate that, given the speed of the technological advancements coupled with a limited understanding of e-business and a lack of resources and capabilities, limited success was achieved.

The research findings suggest that inadequate strategic analysis was undertaken, and the lack of definitive expectations and purpose lead to frequent changes in strategic choices and hampered their ability to implement effectively.

Introduction

Traditionally business has been conducted in a 'bricks-and-mortar' environment evolving from regional and national locations, into global markets through the process of internationalisation. The latest business development, the Internet, has created a virtual environment. Due to the global connectivity of the Internet eliminating spatial restrictions, improving the speed of information transfer and processing, and creating the opportunity for bi-directional communication, the business environment is changing as is the purchasing and shopping behaviours of customers.

The issues are how have New Zealand businesses integrated an e-commerce strategy and transformed their business, and do these businesses have the resources and capabilities to adopt and exploit the potential opportunities created by the Internet driven changing environment? This paper explores the impact of e-commerce in New Zealand, by focusing on four businesses that have implemented an e-tailing strategy. E-tailing has been defined by Haylock & Muscarella, 1999 as; "The art of blending traditional retail methodology with on-line techniques and technologies to sell electronically, directly through the computer"

Specifically the research sought to better understand:

• Why the business made the decision to transform from the traditional 'bricks-and-mortar' business into a 'clicks-and-bricks' business;

• How the businesses implemented the change, based on the strategic choices identified.

It is well documented that e-commerce is continually evolving and that as the Internet user population increases from the current 300 million users across 20 different countries (Revington, 2000), the pressure on businesses to adapt will increase. As the appeal for 'universal connectivity' strengthens (Wigand, 1997) e-commerce opportunities & promises affects and creates a number of business environments; from business-to-business (B2B), business-to-consumer (B2C), consumer-to-business (C2B), consumer-to-consumer (C2C), and more recently business-to-appliance (B2A). The key issue is that the Internet is causing a 'paradigm shift' and is making it difficult for some businesses to continue with the status quo. e-commerce is not a guaranteed win-win situation for all businesses, but it does provide another opportunity to reach and communicate with the end-customer. The most fundamental challenge is not so much why, but rather how to maximise, exploit and leverage the opportunities presented by the technology. Perrott (2001) suggests that the rationale behind the decision to transform a business is that "truly integrated marketing strategies must contemplate the use of all electronic vehicles to maximise market impact and may include a variety of electronic customer interfaces such as computer, phone, electronic kiosks etc". Gates (1999) offers a different perspective and summarises the last 20+ years as follows:

"If the 1980's were about quality and the 1990's were about reengineering, then the 2000's will be about velocity. About how quickly the nature of business will change…when the increase in velocity of business is great enough, the very nature of business changes."

Whilst the Internet does not offer guaranteed returns in the short term, and even long running on-line businesses such as Amazon.com have been pushed to record a profitable return, e-tailing continues to attract a lot of investor and academic interest.

When developing a strategy, there are a number of choices and decisions to be made. These are summarised in Figure 1 below;

Figure 1 Development Strategies

Source: Johnson and Scholes, 1997

This figure highlights the main aspects that contribute to strategy development, illustrating the bases, direction and 'how' of strategy development. Once businesses have chosen the 'what' and the 'which' the focus is then on the 'how'. Whilst there are a number of alternatives for a business to consider, they could be restricted by a number of variables such as time, finances, resources and / or capabilities, and these will usually limit or dictate strategy development. For example, skills and resources may be lacking internally, but an external business partner may have the existing technological infrastructure and / or established logistics to support the transformation process to achieve the strategic objective. Tiernan (2000) considered that "the formula for net partnerships, forged by new or existing companies, could be the key to success in the next millennium". In this context, a business relationship is considered to exist when two firms are working together for the same good (Blankenburg, Eriksson & Johanson, 1999), and combine efforts to achieve an objective that could otherwise not have been achieved if the business had attempted to go it alone.

Tiernan (2000) also proposed that 'if you can't create it now, buy it'. In an environment operating on 'Internet time', this is arguably a justified view as the pressure is on businesses to react fast to the changing environment. Therefore, if a business relationship is deemed the suitable choice, then the focus shifts to whether the business has the internal competencies to understand and absorb the changes that a relationship will introduce to the business. Simonin (1999) conceptualises that there are 3 key moderating effects on knowledge transfer between businesses, namely, collaborative know-how, learning capacity and alliance duration that all determine the ultimate success of a business relationship. The new economy is placing increased pressure on individuals, businesses and industries to transform their infrastructure and marketing strategies. Brown, Pattinson and Perrott (cited Brown, 1997) proposed their 'Industry Transformation Model' (figure 2 on the next page) to highlight the number of interrelating factors when a business is making the transformation from the 'bricks-and-mortar' to a 'clicks-and-bricks' business. This model is based on the premise "that the electronic infrastructure can transform industry structure, alliance structure and marketing strategy either alone or together in concert with one or more of these elements" (Brown, 1997).

Perrott (2001) stated that "a better understanding of the processes and dimensions of transformation could assist managers in coping with the considerable changes which will take place in moving traditional 'bricks-and-mortar' businesses, into the emerging electronic cyberspace" (Perrott, 2001, pg, 2).

Figure 2 Industry Transformation Model

Environmental changes, as a result of the Internet, are dramatically changing the way many businesses operate and whilst this change cannot be ignored, nor can it be blindly embraced. Businesses need a strategic framework in which to capture the value, and link the relationship between internal capabilities and their often turbulent external environment in a way that leads to organisational success. Thompson and Strickland (1989) refer to this as the "managerial game plan". Bradley & Nolan (1998) summarise it thus:

"Present-day businesses are operating in a time of unprecedented technological change…and having made the decision to shift to 'sense and respond' strategies, businesses are then faced with the daunting tasks of building new capabilities and transforming their organisations"

It is imperative that businesses create and replenish knowledge and capabilities, either through internal efforts, forming an external business relationship or a combination of both. Porter (2001) suggests,

"the Internet per se will rarely be a competitive advantage. Many of the businesses that succeed will be ones that use the Internet as a complement to traditional ways of competing, not those that set their Internet initiatives apart from their established operations"

What follows is a short description of describing the methodology adopted and the rationale.

Methodology

Given the size and nature of the sample and the desire to capture rich qualitative data, in-depth interviews were conducted with each business. The main topic under investigation was their perception of the impact of e-commerce on their business, and the strategic choices that were available for implementation. The rationale for selecting only four businesses was to gain comparative insight. It is recognised that there are associated limitations with a case study approach (Yin, 1984), primarily the inability to infer generalisations to the wider business environment based on the sample size. However given the exploratory nature of the topic, sample size was not considered a significant limitation.

The following topics were discussed in each interview:

1. The businesses' perception of the impact of e-commerce.
2. The motives for developing an e-commerce strategy.
3. The existence of in house resources and capabilities to leverage.
4. The strategic choices that were identified and selected.
5. The prerequisites for the development of an external business relationship.
6. The difficulties identified during the transformation process.
7. The long-term strategy(s) that are currently in place.

Respondent Business Profiles

It is important to note that each business had already integrated e-commerce into their traditional 'bricks-and-mortar' business. All four businesses are detailed in Appendix A.

• Business A- is a small, twelve employees privately owned business. They consider the transformation provides an alternative 'store front', and the opportunity to reach offshore customers. They have been described as "one of Dunedin's quiet achievers…operating nationally and internationally from the heart of the city".

• Business B - is considered to be one of New Zealand's largest retailer stores, with growing market share, in both the B2B and B2C markets. The business caters for a wide range of bargain chain store merchandise, from stationary to whiteware, with extensive nationwide distribution through 'bricks-and-mortar' stores.

• Business C - integrated an e-commerce strategy ahead of its main competitors, in a very competitive industry. The business has received very little negativity, and the consensus of public press is that "in the wake of the dot.com fallout, established brands like "Business B" are emerging slowly but surely" (Anderson, New Zealand Business Review, 2001).

• Business D - has received a lot of attention from the press in relation to its transformation activities, but the majority of the press related coverage has focused on the minimal number of successes. It has been suggested that "Business D" is "paying dearly for trying to build a custom-made technology platform. Nothing worked to plan. And the technology team costs were substantial" (cited, Glaser and Parish, 2001, pg. 36).

Results & Discussion

The results are split into 7 sections as per the interview topics.

1. Business Perception of e-commerce

• Business A: This business developed an e-commerce strategy indirectly, as a result of business-to-business Intranet activities. However, their strategic analysis was summed up as "we had no idea and understanding about web e-commerce", and it "just made sense" for the business to incorporate the medium too.

• Business B: Developed an e-commerce strategy more because the medium was available, and less a result of a strategic requirement. Their perception was that "e-commerce has had some impact as a new channel in specific product / service areas", but also that "information technology has not, however, been the revolution that many people thought / hoped it would be".

• Business C: Was the most progressive business, as they perceived an opportunity within e-commerce and began developing a strategy about six years ago. Their perception was that e-commerce "has gone in cycles in terms of - you know you've got to be in it, to - why wouldn't you be in it, and so it has gone on". Hence the business took a cautious approach to the implementation of each launch, and "take the feedback…analyse it and group it in terms of prioritising…then solve the problem by taking it through prototype stages".
  
  The strategic analysis approach was to undertake research into the activities of offshore businesses within the same industry, particularly in the United States. Consequently the first strategy, "provided the business with the necessary time to gain the experience and resources and capabilities" to make the transformation.

• Business D: Was more reactive based on the perception that the likely growth of the Internet was a threat, even with minimal evidence of success from other businesses to date. The business had the perception that "as everybody else in the market started merging, and the fact that e-commerce is coming even though nobody quite understands it, meant that it was clearly a channel that seemed to be competitive." This stimulated research into the activities of businesses in the United States. The research findings confirmed their concerns and highlighted the need to react.

Results suggest that the businesses had little understanding as to the impact of e-commerce, but there was consensus that e-commerce is an alternative medium to conduct business activities. Their approach can be summarised as follows:

• Business A: by default - no strategic analysis
• Business B: availability - limited market analysis
• Business C: because they wanted to be in it - strategic focus and analysis
• Business D: as a result of a perceived threat - minimal strategic analysis

2. Motivation for Developing an e-commerce Strategy

• Business A: Envisaged the opportunity to be a "natural progression", that would be "just another storefront". Therefore the motivation was to use the new medium in the same manner as their existing 'bricks-and-mortar' retail store, i.e. as a sales channel through which "to target the international customer as the product type is particularly attractive for New Zealand expatriates".

• Business B: Top-level management had the vision and motivation to develop and integrate e-commerce into the business infrastructure. This was expressed as: "this 'new' medium, the Internet, would be a suitable addition to our current multi-channel strategy, and is considered as a compliment to the business' existing 'bricks-and-mortar' stores".

• Business C: Developed e-commerce strategies as a result of the perceived opportunity, an entrepreneurial third party software developer, and the vision and objectives of the parent company. Although the business viewed this medium to be opportunistic they also considered it to be "fairly low risk for the business to get a bit of runs on the board or experience".
• Business D: Approximately two and a half years ago the business felt; "OK, if we are really going to get into it [e-commerce], we should be aware of it, and see what it means, so we put together a strategy that tried to develop the presence in-house". In essence, the business felt that - "at that point we all went in with our eyes wide open and looked at it as a vehicle that we could leverage off the ground".

For Businesses B and C the motivation came from within to transform, as a result of top-level management's interest and vision, but the approach was more opportunistic than planned - as business C suggested it was "fairly low risk…to get a bit of runs on the board or experience". Whereas Businesses A and D were more of a "natural progression " i.e. "let's see where this takes us" type approach.

3. The Existence of In-house Capabilities and Resources

• Business A: "Lacked all the skills, both in terms of software, software development, and in terms of marketing expertise" therefore they chose to form an external relationship to develop an e-commerce strategy. The business needed to "gain the support from a host software developer, then gain the expertise of marketing consultants to assist the business in integrating and promoting this alternative avenue for sales".

• Business B: Had no "e-commerce resource", but knew "a number of individuals in the market who had the required skills". Therefore, they purchased the necessary software and hardware to establish a technology platform, and then recruited two individuals to utilize the newly purchased software, and implement the e-commerce strategy. In essence their approach used their financial ability to buy the technology and individuals who had the know-how, and hence were able to internalise the process, even though the resources and competencies did not initially exist in-house.

• Business C: Had an existing Information Technology Department, but the in-house skills required for e-commerce development were described as "inadequate…we not only required the software, but also the software developers to build the initial web presence". The business maintained control of the systems development by "keeping it in-house" (project management), and as a result felt that this was the way to control the "key intellectual property of the business".

• Business D: This business had a slightly different approach and from the outset identified that their capabilities were in the management of activities and not in information technology; therefore they focused on their "core competencies and how best to use our management, and where would they best use their time". The business self evaluated whether they "really did have the (IT) skill base…, the answer was nobody did around here". Therefore "if any presence was to be established then it would require support through an external business relationship(s)". Consequently the business invested in a "number of strategic partners who brought core competency skills in terms of information technology support, knowledge, and hardware."

All four businesses lacked in-house capabilities and sought to resolve this in different ways:

• Business A: solely through external business relationships
• Business B: one-off purchase of necessary resources and capabilities
• Business C: formed a strategic alliance, but project managed its development to retain key intellectual knowledge
• Business D: created a strategic investment with remote alignment to its existing business

Hence businesses C and D both reflected an understanding as to the importance of keeping the systems development and management process in-house. This enabled them to retain focus, and to some degree control, over the development. However, Business D had the strategic intent to keep the new business entity at arms length from the 'bricks-and-mortar' business, and it could be argued that they in fact lacked the focus for an effective e-commerce strategy.

4. Strategic Alternative Selected

• Business A: The e-commerce strategy was implemented through 'consultant' business relationships. A number of relationships were initiated in the early stages including software and website development, through to marketing expertise and promotion of the new site. This strategic decision "provided better flexibility and the opportunity to form relationships on a need by need basis". However, the initial relationship that developed approximately three years ago became too expensive "to continually have a consultant on site, and therefore we needed to use the technicians specifically when something had to be done". Hence an alternative software company was contracted, and the site was overhauled to improve ease of use for the customer, and the overall functionality from an operations perspective. However, even once the technology-based relationships had ended, there was an ongoing relationship to be established with marketing consultants, as "once again the site requires the assistance of marketing experts in order to promote the site further to both existing and potential new customers as an alternative shopping facility".

• Business B: The actualisation of their e-commerce strategy was a result of a "small team focused on the business application of e-commerce technologies". The business bought technology (software), and people, in order to build the technology platform and to retain the know-how in-house. Having implemented the e-commerce strategy, it became evident that the business-to-consumer market was inappropriate as "too many line items making this [E-tailing facility] impractical and inhibiting economies of scale". Hence, the business changed the e-commerce strategy to focus on the business-to-business sector "as part of a multi-channel strategy in the business-to-business non-trade goods (stationary)…we are actively looking at the business-to-business trade (i.e. supply chain) opportunities", and believe that the "key to success this time is the improved communication ability and service capacity for both existing and new client businesses". This emergent E-Business strategy development has also been kept in-house.

• Business C: This business, in comparison to the other three businesses, had the unique situation of having a parent company exercise some degree of control over the New Zealand business activities and business relationships. The initial impetus to develop an e-commerce strategy was instigated by an entrepreneurial software developer, however this relationship was terminated, and a second strategy emerged where the decision-making and objective setting became the prerogative of the parent company.
  
  The parent company commissioned a U.S. based software development company, who sent a team of 17 developers to New Zealand. Within five months they had built "the first version of what the on-line business is today". After completing the project the development company shifted offshore. Consequently "it became more difficult to amend any problems without the assistance of the initial developers". This resulted in disjointed control between the New Zealand business and the parent company for approximately nine months leaving the site "largely dysfunctional". Therefore the business attempted to resume control over the domestic business activities and the business formed a strategic alliance with a New Zealand based software business. This alliance has been operational over the last two years and the development team has been involved constantly. "This business relationship has been very important because with each new launch, although the workload has been heavy; both parties have had clear and mutual visions, which has meant increased likelihood of success at each stage of implementation".

• Business D: This business attempted to form a number of strategic partnerships with those who already had existing resources, whether it be related to information technology or marketing know-how. However, the first attempts did not eventuate as, "the market turned, the rules were changing, and the market was evolving too rapidly for the business to develop such relationships". The next approach involved a merger with another business, but due to differing perceptions as to the 'value' of the business negotiation, on the part of both parties, this strategy was not implemented. "It was a complex deal which was confidential, but the two parties were basically saying that the value quoted in New Zealand dollars was different to their perceived value". However, the business viewed this as a "blessing in disguise, as the market had once again changed quite considerably and the business would have got trapped in a less than favourable position" The third approach was an attempt to gain financial support from investors both in New Zealand and Australia; the intention was to list the business and leverage off the Australian market. However, in the twelfth hour the market crashed, stocks plummeted and this strategy did not reach implementation. Subsequently the business needed to approach the transformation process from yet another angle. However, even with all the ups and downs, the business did not "feel that there was reason to doubt their ability to form an on-line presence"; but felt that "the models, which had been created to date, were wrong, and that a new business model needed to be formulated".
  
  Therefore, the fourth and final approach involved the business "'licensing' out ownership of the 'new' business, thus keeping the business entity at 'arms length' (from the 'bricks-and-mortar' business), yet still having an on-line presence". This strategy was implemented and within a year a joint venture had been established. This approach means that "the 'bricks-and-mortar' business is currently not incurring any costs and the vision for the future is that the activities will continue as long as the new on-line business is kept at a distance and it does not have material impact on the 'bricks-and-mortar' business". The business also considers this strategy to be of minimal risk "because the business has had experience with such relationships and has undertaken a number of successful joint ventures and financial agreements in the past".

5. Prerequisite criteria for the development of an external business relationship

• Business A: Identified that it was difficult to find consultants that have the necessary skills required to transform the business. The business understood that “there were not many ‘experts’ in the field as such, and therefore sought those that could build a web presence, provide advice and assistance, and were readily accessible”. However, their experience indicated that such businesses were few and far between, and that “due to the nature of the ‘consultancy’ contracts the business relationships were hard to manage.”

• Business B: Did not specify any perquisite requirements, as they had adopted an internally driven approach and as such “the existing corporate culture remained the same and no relationships had to be initiated”.

• Business C: Due to the various approaches employed to achieve their final strategy, and due to the control by the parent company, business C ultimately had little input even in their current relationship, but what they did find is that “it was like giving them (the external business relationship) instructions saying here’s what it (website) needs to do …. so you are employing them (the development company) to write code, not to be experts on how the site needs to meet this demographic (the customer)”.

• Business D: Considered the relationship aspect to be of little concern because “the business had experience with such relationships as joint ventures and mergers and had had success in the past”. Yet this company appears to be the least successful in implementing it’s chosen approach; as Glaser and Parish reported, the struggling E-tailer (Business D) has paid dearly for trying to build a custom-made technology platform. Nothing worked to plan. And the technology team costs were substantial…Business D announced: “We are out of the technology business” having outsourced all its technology functions (2001, pg. 36).

All four businesses formed external business relationships, with little or no concern for pre-requisite criteria, so the difficulties incurred were not surprising. Although the concept of ‘if you can’t create it now, buy it’ was appropriate, it still requires careful management in order to gain maximum benefit with minimal challenges.

6. Difficulties of the transformation process

• Business A: The associated difficulties revolved around “outsourcing all of the business activities, and the fact that as a result of no organisational learning occurring along the way, the business lacked the necessary skills and capabilities to continue unassisted” and consequently it became a vicious circle of constantly requiring external support to implement further strategies.

• Business B: “No major difficulties were identified, if nothing else the business-to-consumer market was not as successful as we hoped.” It is clear that due to business B internalising the transformation process, they have up-skilled and can adapt and integrate the e-commerce facility throughout the business, and “as a result there has been wide acceptance and understanding of what the web presence is intended to achieve for the business”.

• Business C: Even though business C went through a number of strategic choices, and encountered a number of difficulties, the business eventually established what they considered to be the appropriate strategy to implement. The first business relationship ended because “it became quite clear that the current relationship that we were in was not sustainable, probably for both parties in the long run, and it was determined (by the parent company) that we exit that relationship”. In hindsight the business considered this to be an appropriate decision as it was “likely the two businesses had differing motives and there was the impression of increased risk with working in alliance with an entrepreneur”.
  
  Once the second strategy had been implemented a new difficulty arose. The U.S. team having completed its contract in New Zealand, had moved offshore, and as a result Business B did not have ready access to assistance - “feedback was coming in from customers … but we were quite powerless to do anything about it because the development team had moved on and the control of development was starting to reside with the parent company,” thus the site became “largely dysfunctional and customer feedback had shifted from ‘delighted’ to ‘aggressive’”.
  
  The third strategy has to date been more successful - “the relationship is working, this one-on-one relationship is great”. The business understands that although the outsourcing has come at an expense, it does “without a doubt give you more flexibility and allows you to, if we need to, to turn on the tap in terms of getting more happening more quickly in certain areas”.

• Business D: As previously suggested the lack of focus and rationale for adopting an e-commerce presence, in essence became the main difficulty for this business, as it went from one strategic choice to another. However they related the challenges to “variable and unpredictable environments, in terms of the market evolving too rapidly”. The second strategy, involving a merger, had the disadvantage of “increased complexity with the negotiations and differing perceptions as to the monetary value” of the deal. The third strategy, of attempting to list the business, also failed like the first, based on the dynamic nature of the external environment. The fourth and final strategy has been implemented, and the objective of the business was to have a presence “such that it has impact on the business clearly, but not material impact that deteriorates the ‘bricks-and-mortar’ business”. This last statement also suggests that they may not have quite accepted the role of e-commerce in their business and therefore may find similar experiences in implementing future strategies.

It would seem from the findings that key difficulties could be attributed to a lack of commitment to the process of managing an external business relationship. It is fair to say that the main difficulties centred around the external relationship complexities, exacerbated by the lack of internal visions, goals, and the continuously changing approach on how to achieve their e-commerce strategy.

It would seem from the findings that key difficulties could be attributed to a lack of commitment to the process of managing an external business relationship. It is fair to say that the main difficulties centred around the external relationship complexities, exacerbated by the lack of internal visions, goals, and the continuously changing approach on how to achieve their e-commerce strategy.

7. Long-term strategy in Place

• Business A: The long-term strategy revolves around “continually developing the site and forming ‘alliances’ with those ‘qualified’ in the field and who have the necessary resources and capabilities at the time”. This suggests that they have no long-term strategy, merely changing it when it does not work.

• Business B: This business identified the choices available and is continually evaluating the current context in order to determine the strategic route for the future. “We are a pragmatic organisation that knows the danger of grand plans for the next five years - the future has changed before the ink is dry”.
  
  Their long-term strategy is now business-to-business, as they have currently ‘suspended’ their business-to-consumer operations in order to trial the business-to-business market. The trial phase has been completed and the next strategy is to implement the facility to a full-scale operation. The business has not discarded the thought of re-entering the business-to-consumer market, but envisages “the objective to be for alternative reasoning, such as a marketing channel for selected promotional items, bulk sales or end of line sales”.
  
  Although they did not verbalise a long-term strategy, this could be due to the parent company retaining control, therefore Business C merely implements the elected strategy.

• Business C: This business has operated within a 90-day plan. This approach acknowledges the pace of change in the evolving environment, and that the business needs to regularly evaluate their position in the market. The business believes that “operating within a 90 day plan gives us the flexibility to modify where we are at, and what and where we are going”.
  
  In terms of the current strategic alliance relationship with the software development business it is hoped that at the end of the final launch “the software developer will shift into a support role only for the business, and that the information technology department can manage and maintain the day-to-day developments and activities relating to the site”.

• Business D: Identified that the strategic decisions to date have been based on ‘best guess’ decisions at the time and as for a long-term strategy, the Chief Executive Officer believes “the approach to the on-line business environment is one of a continuous strategy”. The business wishes to retain an e-commerce presence and believes “it is very clear that we want to be in it, and we will continue to be in it, but at no cost”. These comments suggest that their prime strategy is one of ‘flying by the seat of your pants’, as no strategy illustrates a defined strategic route.

There appears to be a lack of explicit long-term plans by all four businesses. Most appear to be adopting a reactive approach to their current strategies, and expect to evolve as situations arise. Given the pace of change, lack of internal resources, and the newness of this technology, the current reactive approach may be the most appropriate for these businesses. However, it has become more evident that attention should be directed to a clear strategic intent and management process.

Conclusions & Implications

In conclusion, these four businesses demonstrated the full complexity of embarking and integrating an e-commerce strategy as a result of external environmental pressures, and the internal motives to adapt to technological advancements; with insufficient understanding of the implications to their business.

All businesses lacked the internal capabilities and resources, however Business C differed in the fact that they up skilled in the process, in order to eventually manage the transformation process unassisted, whereas the others out sourced. Business A still requires considerable ongoing support in a number of core business activities. By contrast Business B was able to complete the strategic transformation relatively unassisted once the initial resources had been acquired. Business D, illustrated the difficulties associated with selecting and implementing the most suitable external business relationship, as it performed the least well in transforming its ‘bricks-and-mortar’ business to the new E-environment, out of the four businesses.

All the businesses appear to have undertaken limited strategic analysis activities, as outlined by Johnson and Scholes (1997), and subsequently found that they were continually changing their strategic direction, and hence had a less than successful transformation to an e-commerce strategy.

Finally, it would appear from these companies’ experiences that firms should take a more cautious and rigourous approach to integrating e-commerce activities into their bricks and mortar ‘traditional’ business.

Businesses in the new environment need to consider ways of developing their approach to strategy, and aligning capabilities and resources appropriately, within the rapidly changing environment. This preoccupation and current tendency to react as fast as possible has meant that the businesses under review almost entirely forfeited developing an integrative strategy for effective implementation. The strategies that were implemented in each case lacked clear strategic intent, were based on minimal understanding of the environment, the expectations and purpose from the point of view of the stakeholders, and the effective use of resources and capabilities within the business as well as poor management of external relationships. The managerial implication is that when developing an e-commerce strategy to exploit an opportunity in the market space requires a change of focus and direction as well as a clear understanding as the importance of establishing a business plan that in turn provides value to the business.

Appendix A

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