Cross-Channel Cooperation

Cross-Channel Cooperation

Tobias Kollmann (University of Duisburg-Essen, Germany)
DOI: 10.4018/978-1-60566-014-1.ch041
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Abstract

The rapid growth of Internet technologies induced a structural change in both social and economic spheres. Digital channels have become an integral part of daily life, and their influence on the transfer of information has become ubiquitous. An entirely new business dimension that may be referred to as the Net economy has emerged. Internet-based e-ventures that are operating at this electronic trade level are based on innovative and promising online business models (Kollmann, 2006). But also traditional enterprises that are operating at the physical trade level (real economy) increasingly utilize digital channels to improve their business processes and to reach new customer segments. With the Internet, the cooperation between enterprises reached a new level of quality. The wide, open, and cost-effective infrastructure allows a simple, fast exchange of data and thus a synchronization of business processes over large distances. Particularly for e-ventures introducing their new business ideas, online cooperation is a promising strategy as it enables the partners to create more attractive product offers and represents a basis for more efficiently and effectively communicating and distributing their product offers (Kollmann, 2004; Volkmann & Tokarski, 2006). Online cooperation, however, does not incorporate off-line channels such as print media, stores, or sales forces. For the combined management of online and offline channels, cooperation can be expected to hold an outstanding potential. Partnering with companies from the Net economy may help traditional enterprises to reach new market segments without extending themselves beyond their core competencies—and vice versa. In this context, cross-channel cooperation can be defined as the collaborative integration of online and offline business models aiming at attaining positive synergetic effects for the involved partners by a complement of competencies. (Kollmann & Häsel, 2006, p. 3) Cross-channel cooperation can be regarded a new management task that is worthwhile to be examined in more detail. Although researchers have broadly covered the area of online cooperation, a comprehensive study on cross-channel cooperation has not been undertaken up to now. Particularly the question arises, which cooperation forms represent feasible strategies for both e-ventures and traditional enterprises. Besides its contribution to literature, this article is intended to assist practitioners in evaluating the benefits of crosschannel cooperation for their own businesses.
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Introduction

The rapid growth of Internet technologies induced a structural change in both social and economic spheres. Digital channels have become an integral part of daily life, and their influence on the transfer of information has become ubiquitous. An entirely new business dimension that may be referred to as the Net economy has emerged. Internet-based e-ventures that are operating at this electronic trade level are based on innovative and promising online business models (Kollmann, 2006). But also traditional enterprises that are operating at the physical trade level (real economy) increasingly utilize digital channels to improve their business processes and to reach new customer segments.

With the Internet, the cooperation between enterprises reached a new level of quality. The wide, open, and cost-effective infrastructure allows a simple, fast exchange of data and thus a synchronization of business processes over large distances. Particularly for e-ventures introducing their new business ideas, online cooperation is a promising strategy as it enables the partners to create more attractive product offers and represents a basis for more efficiently and effectively communicating and distributing their product offers (Kollmann, 2004; Volkmann & Tokarski, 2006). Online cooperation, however, does not incorporate off-line channels such as print media, stores, or sales forces.

For the combined management of online and off-line channels, cooperation can be expected to hold an outstanding potential. Partnering with companies from the Net economy may help traditional enterprises to reach new market segments without extending themselves beyond their core competencies—and vice versa. In this context, cross-channel cooperation can be defined as

the collaborative integration of online and offline business models aiming at attaining positive synergetic effects for the involved partners by a complement of competencies. (Kollmann & Häsel, 2006, p. 3)

Cross-channel cooperation can be regarded a new management task that is worthwhile to be examined in more detail. Although researchers have broadly covered the area of online cooperation, a comprehensive study on cross-channel cooperation has not been undertaken up to now. Particularly the question arises, which cooperation forms represent feasible strategies for both e-ventures and traditional enterprises. Besides its contribution to literature, this article is intended to assist practitioners in evaluating the benefits of cross-channel cooperation for their own businesses.

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Cooperation Drivers

The pervasiveness of digital technologies and changes in customer behavior are increasingly blurring the boundaries between real and Net economy. Considering the ongoing integration of online and off-line business activities of both companies and individuals, enterprises operating at the electronic and physical trade level inevitably need to approach each other. In many industries, integrated business concepts have become a prerequisite for achieving customer loyalty. For companies that lack specialized marketing departments and large marketing budgets, however, the requirements implicated by such strategies often go well beyond own means. Against this background, a cooperative inter-firm integration of online and off-line business models seems to be a feasible way of sustaining competitive advantage. The motivation for such strategies may be broken down to two main drivers: technology innovation and customer behavior.

Key Terms in this Chapter

Net Economy: Refers to the economically utilized part of digital data networks (such as the Internet) that allow carrying out information, communication, and transaction processes (and thus an electronic value creation) via different electronic platforms.

Interactive Kiosk: Computer-like device that enables a retailer to offer innovative information, communication, and transaction processes at the point-of-sale. Kiosk systems are placed in key store locations and leverage the power of the Internet for retailers by providing cross-channel customer care capabilities and giving customers self-service access to products and services.

Electronic Trade Level: A business dimension resulting from the proliferation of digital data networks and thus a new possibility of doing business in the so-called Net economy, apart from the existing economy of physical products and services.

Electronic Value Creation: Refers to the creation of an added value by the means of a digital information product in the framework of the Net economy. Electronic value is commonly created through value-adding activities such as the collection, processing, and transfer of information.

Business model: An abstract description of how a business generates revenue and profits. It includes descriptions of the firm’s organization, its strategy, its products and services, its customer markets, its business processes, as well as the dependencies between these aspects.

Channel: A structured connection to the customer. One may differentiate between media channels (like the Internet, television, and magazines) or institutional channels (such as stores, call centers, or sales forces). Channels differ regarding their functional suitability for communication, distribution, and customer service purposes.

E-Venture: A recently founded and thus young e-business (startup). An e-venture results from a company foundation in the Net economy.

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