Impact of Capabilities on Firm Value Offering in the E-Commerce Service Setting

Impact of Capabilities on Firm Value Offering in the E-Commerce Service Setting

Hui-chuan Chen (University of Tennessee at Martin, USA), Szu-Yuan Sun (National Kaohsiung First University of Science and Technology, Taiwan) and Li-Shan Chen (Fujian University of Technology, China)
Copyright: © 2020 |Pages: 15
DOI: 10.4018/IJISSS.2020070102

Abstract

E-commerce and online shopping have changed the retail environment. At present, companies rely on extensive customization of information systems and business processes in order to provide enhanced online customer service experiences. In today's rapidly expanding service economy, businesses need more service capabilities in order to outperform competitors. The authors identify four capabilities: innovation-based, marketing-based, collaborative, and absorptive to assess the relationship of these capabilities of online shopping websites in relation to the firm's value offering to its online customers. The results indicate that capabilities indeed play an important role for online shopping providers in the area of value creation for online consumers. This suggests to online retailers that capabilities have a positive effect on value offerings; thus, it is imperative that firms use more of their resources to develop capabilities.
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Introduction

In recent years, e-commerce empowered by online technology has become an integral part of the global economy. E-commerce and online shopping have changed the retail environment which now relies on extensive customization of information systems and business processes to provide better online customer service experiences. The U.S. Census Bureau reported that e-commerce sales totaled approximately US$341.7 billion for 2015 (DeNale & Weidenhamer, 2016). Asia also has shown strong growth in online spending. According to Chih et al. (2015), Taiwan e-commerce consumer expenditures exceeded approximately NTD 36 billion in 2013. Previously, Huy et al. (2012) and Li et al. (2010) found that e-commerce adoption is influenced by firms’ technology, knowledge building, and innovation development. Through innovative platforms, e-commerce websites can introduce new products, deliver current information, and promote activities that make these websites more transparent. Online purchasing functions necessitates customers’ cognition and behavior; specifically, these include ease of use, practicality, or emotional aspects of perception and pleasure (Childers, Carr, Peck, & Carson, 2001). Typically, customers want to know that their preferred products can be transported directly to their home or office. Moreover, customers who need help or feedback wish to receive services and communications via the internet.

Effective shopping websites allow customers to become more interactive by communicating and coordinating between online retailers and shoppers. Also, a well-designed platform provides a positive online shopping experiences by allowing consumers to effectively process their purchases. Users’ website satisfaction can influence consumers and lead to future repurchase behaviors over time. Research shows that shopping convenience is a primary motivation for consumers to adopt online purchasing (Wu, Cai, & Liu, 2011). Therefore, online retailers have been developing and designing websites to maximize the speed and ease of shopping for their customers. However, the perceived convenience of various shopping websites can differ from one platform to another, with regard to customer satisfaction and behavioral intention (Ha, 2012) or online service quality (Klaus, 2013). Online purchasing behavior was associated with the frequency of online purchasing on both consumers’ perceived risk and the internet shopping experience (Doolin, Dillon, Thompson, & Corner, 2005; Zeba & Ganguli, 2016). Thus, a successful online retailer should consider online consumer purchasing behavior in order to design and enhance customer service of its retail websites.

In today’s rapidly expanding service economy, businesses need more service capabilities to be able to cope with business competitors. Understanding the customer’s purchasing behavior is an important component of value offering between suppliers and customers. Value offering is defined as value creation by firms for customers as perceived by the customers (Slater & Narver, 1994). For service industries, the firms must transcend supply-oriented concepts, one of which is product-oriented logic. The product-oriented logic is a product-centric, value-based exchange of tangible resources (Vargo & Lusch, 2008). However, firms must not only emphasize physical resource but also skills and knowledge resources in their capabilities (Ngo & O'Cass, 2009).

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