Towards a model of dynamic capabilities in innovation-based competitive strategy: Insights from project-oriented service firms

With the growing significance of services in most developed economies, there is an increased interest in the role of service innovation in service firm competitive strategy. Despite growing literature on service innovation, it remains fragmented reflecting the need for a model that captures key antecedents driving the service innovation-based competitive advantage process. Building on extant literature and using thirteen in-depth interviews with CEOs of project-oriented service firms, this paper presents a model of innovation-based competitive advantage. The emergent model suggests that entrepreneurial service firms pursuing innovation carefully select and use dynamic capabilities that enable them to achieve greater innovation and sustained competitive advantage. Our findings indicate that firms purposefully use create, extend and modify processes to build and nurture key dynamic capabilities. The paper presents a set of theoretical propositions to guide future research. Implications for theory and practice are discussed. Finally, directions for future research are outlined.     

B2B brands on Twitter: Engaging users with a varying combination of social media content objectives,strategies, and tactics

The objective of this research is to increase understanding about B2B company-led user engagement on social media content. Building on hierarchy-of-effects (HoE) theory, we explore how the world’s leading B2B companies use content objectives (why), strategies (how), and tactics (what) on Twitter. We first integrate B2B advertising and social media research on companies’ content objectives, strategies, and tactics. Then, using qualitative analyses, we examine the existence of objectives, strategies, and tactics in the most engaging tweets (N = 365) of the worlds’ ten leading B2B brands, covering five industries, in 2017. Finally, we quantitatively examine how the use of diverse objectives and strategies differs between the most engaging tweets (N = 318) and least engaging tweets (N = 229) of the companies in 2018. The companies use objectives, strategies and tactics that relate to creating awareness, knowledge and trust, interest, and liking in the majority of their most and least engaging tweets, and express preference, conviction and purchase aspects much less. Differences exist in general, industry-wise, and company-wise. The study is a rare attempt to integrate the extant B2B advertising and social media research, and compare the most and least engaging B2B social media content.     

Sustainably superior versus greenwasher: A scale measure of B2B sustainability positioning

Business-to-business (B2B) buyers are finding it increasingly difficult to judge the true sustainability of supply chain partners (Oruezabala & Rico, 2012). Yet three-quarters of buyers in the OECD report they will dismiss potential supply chain partners who fail to meet sustainability criteria (Pierre, 2008). B2B firms then, cannot afford any confusion over their sustainability practices and positioning. Unfortunately, there are no sustainability positioning measures for firms to assess this, and there is no agreed upon operationalization of a highly sustainable firm vs a weakly sustainable firm. As such, this research creates a B2B sustainability positioning scale and taxonomy. First, interviews with buyers and marketing managers determine perceptions of supplier sustainability practices and defines B2B levels of sustainability. Second, exploratory and confirmatory scale development studies are conducted with 578 experienced industrial buyers. The resulting B2B sustainability positioning scale shows that a sustainably superior positioning for B2B addresses five key factors: (1) sustainability credibility, (2) concern for environmental impact, (3) a careful consideration of stakeholders, (4) resource efficiency, and (5) a holistic philosophy. This scale is intended as a tool to help B2B marketers understand and better leverage their sustainability practices and communications around sustainability.“We're trying to be cleaner and greener: We recycle waste and switch things off. We use paper from responsibly managed forests whenever possible. We ask our printers to actively reduce waste and energy consumption. We check out our suppliers' working conditions...”– The back jacket of books from DK Publishers, 2018.     

Branding a B2B service: Does a brand differentiate a logistics service provider?

Existing research has shown that strong brands serve as an important point of differentiation for firms, assisting customers in their evaluation and choice processes. Although there is considerable research on the branding of consumer goods and an increasing literature on industrial and service brands, little is known about branding in the context of business-to-business services. This research extends existing brand theory to a new setting, namely B2B services. Drawing on the results of two mail surveys, we examine B2B services branding in the context of logistics services. Findings suggest that brands do differentiate the offerings of logistics service providers and that brand equity exists for this commodity-like B2B service. Findings also support the extendibility of Keller's [Keller, K. L. (1993). Conceptualizing, measuring, and managing customer-based brand equity. Journal of Marketing, 57(1), 1-22] brand equity framework into the logistics services context. However, results of this study show that; logistics service providers and their customers have different perspectives on the relative influence of brand image and brand awareness on brand equity. Implications of these findings for managers and directions for future research are offered.     

Configuring quality management and marketing implementation and the performance implications for industrial marketers

This study empirically examines if different configurations of quality management and marketing (Q&M) implementation exist in various industrial organizations and explores their implications for firm performance. We survey 304 organizations that have operational quality management systems and conduct in-depth interviews with selected groups of respondent organizations to understand their market-oriented behaviors. We perform cluster analysis of the survey data to empirically construct taxonomic configurations of Q&M implementation that may exist in these organizations. The results show three distinct configurations with each configuration displaying specific implementation characteristics. We label the corresponding organizations as reactive firms, progressive firms, and proactive firms, respectively. In other words, each configuration represents a different extent of implementing Q&M in organizations. We also find that the empirically-derived configurations, corroborated with in-depth interview data, are associated with various firm performance measures. The analysis reveals that proactive firms in which Q&M are implemented at a high level attain the best firm performance. Despite the exploratory nature of this study, the taxonomy developed yields valid and reliable findings that have significant theoretical and practical implications for industrial marketers.     

Product radicalness and firm performance in B2B marketing: A moderated mediation model

There has been ambiguity and controversy in establishing the links between the introduction of radical innovations and firm performance. While radical innovations create customer value and grow product sales, they are also fraught with uncertainty due to customer resistance to innovative products and significant costs associated with commercialization. This research aims to explain the contrarian findings between radical innovations and firm performance in a business-to-business (B2B) context by examining two mediating variables – new product advantage and customer unfamiliarity. Using a multi-informant approach, the authors collected survey data from a sample of 170 Spanish B2B firms engaged in new product development, provided by 357 managers. The authors find that, while new product advantage positively mediates the relationship between product radicalness and firm performance, customer unfamiliarity has a negative mediation effect on this relationship. Furthermore, the authors examine the moderated mediation effect by industry type, manufacturing vs. service, and find that it moderates the mediation of customer unfamiliarity: The negative impact of product radicalness on customer unfamiliarity is greater for manufacturing firms than for service firms. With these findings, the authors discuss implications for development and marketing of radical innovations and how those implications facilitate firm performance in the B2B context.     

Buyer-supplier matching in online B2B marketplace: An empirical study of small- and medium-sized enterprises (SMEs)

Mitigating perceived uncertainty and risk is critical for successful exchanges in an online B2B marketplace. However, scant empirical research has been devoted to the topic, and even less to small- and medium-sized enterprises (SMEs). We investigate the use of quality signals and recommendations to foster buyer-supplier matching in an online B2B marketplace of SMEs. Unique proprietary data from a leading B2B e-commerce platform suggest that such a matching is significantly related to signals of SME buyers' quality and credibility embedded in how projects are described. Moreover, appropriately designed recommendation system can increase the matching rate because it helps reduce buyers' information overload. This research highlights the importance of integrating online channel data with traditional offline channel data to accurately assess the drivers of buyer-supplier matching. Our findings provide valuable insights into how to design and manage an online B2B marketplace for SMEs to yield more successful matches.     

Marketing capabilities: Antecedents and implications for B2B SME performance

The study provides a new perspective on SME marketing strategies in the B2B context. Using a resource-based view of the firm, the study develops a structural model linking marketing capabilities and marketing performance. A study of 367 SME Australian firms reveals that two key marketing capabilities, namely branding and innovation, have major performance outcomes in the SME B2B context. This is the first SME study to evaluate concurrently the contribution of innovation and branding marketing capabilities, with innovation capability the strongest determinant of SME performance. The study also finds market orientation and management capability act as enabling mechanisms for building marketing capabilities. Disaggregation tests indicate that the same findings apply to three size categories denoting micro firms (less than 20 staff), small firms (20-99 staff) and medium-sized firms (100-499 staff).     

A service design perspective on the stakeholder engagement journey during B2B innovation: Challenges and future research agenda

Innovation in business-to-business (B2B) contexts deals with highly dynamic, complex, and heterogeneous constellations of stakeholders with a diversity of goals, motives, and capabilities that further challenge successful management of B2B innovation processes and outcomes. Complex challenges, such as sustainability and digitization trends, push these B2B firms to embrace new innovation methods that help them manage disruptive change. Service design thinking has emerged as an innovation management practice emphasizing a human-centered innovation process of user interactions, creativity, and learning mindsets. In this article, we aim to evaluate the challenges and develop a research agenda on how service design can effectively enable stakeholders' engagement during the B2B innovation process. We argue that to advance service design opportunities for stakeholder engagement, we need to address the unique complexities and challenges of stakeholder engagement during innovation from a systemic and dynamic process perspective. From a systemic perspective, we zoom in on the building blocks of stakeholder engagement and address multi-level stakeholder engagement platforms (i.e., innovation networks). From a dynamic process perspective, we treat stakeholder engagement as an emerging process and zoom in on the temporal and relational connections and hybrid orchestration to allow for both structural and emerging stakeholder engagement during innovation. We develop a stakeholder engagement journey in which we integrate service and innovation stages and propose how service design activities can support and facilitate the aforementioned challenges and complexities. Finally, we identify concrete research questions and, accordingly, develop a research agenda for future research on stakeholder engagement in B2B innovation trajectories.     

How to Build an AI Climate-Driven Service Analytics Capability for Innovation and Performance in Industrial Markets?

AI climate-driven service analytics capability has been anecdotally argued as a viable strategy to enhance service innovation and market performance in B2B markets. While AI climate refers to the shared perceptions of policies, procedures, and practices to support AI initiatives, cognitive service analytics capability refers to the analytical insights driven by AI climate and augmented by both machines and humans to make marketing decisions. However, there is limited knowledge on the antecedents of such analytics capabilities and their overall effects on service innovation and market performance. Drawing on service analytics literature and the microfoundations of dynamic capability theory, this study fills this research gap using in-depth interviews (n = 30) and a survey (n = 276) of service analytics managers within the AI climate in Australia. The findings confirm the five microfoundations of cognitive service analytics capabilities (cognitive technology, cognitive information, cognitive problem solving, cognitive knowledge & skills, cognitive training & development). The findings also highlight the significant mediating effect of service innovation in the relationship between analytics climate and market performance and cognitive service analytics capability and market performance.     

Modular interconnected processes,fluid partnering,and innovation speed: A loosely coupled systems perspective on B2B service supply chain management

In this paper, we examine whether and how loosely coupled systems in service supply chains influence the speed of innovation in service organizations. Drawing upon the nomological network of loosely coupled systems, we propose a way for supply chains in the business to business (B2B) market context to be conceptualized as loosely coupled systems and explain how the dialectical elements of modularity at the interface of standard process and content interfaces (SPCI) and structured data connectivity (SDC) enable the sharing of high-quality information through fluid partnership in service supply chains to improve innovation speed. Results that are based on a sample of service firms indicate that SPCI and SDC are positively associated with modular interconnected processes, and they, in turn, positively influence the ability to reconfigure supply chain partners (fluid partnership). Fluid partnership enhances information quality, which in turn, influences innovation speed. Implications are discussed for B2B service supply chain efforts in improving innovation speed.     

The up- and downside of collaboration in core and non-core technologies – Selective,contingent, and orchestrated openness in R&D collaborations

This paper contributes to the current debate about the “knowledge sharing-protecting” tension in R&D collaborations by introducing a new angle for analyzing this paradox. Considering the role of internal knowledge sources of the firm, the paper introduces and empirically analyses the interplay between three knowledge governance mechanisms (selective, contingent, and orchestrated openness) and the different technological fields of the firm (core, related non-core, and distant non-core technologies). Based on a unique first-hand large-scale project-level dataset from a Global 100 firm across a 10-year span, this research finds that R&D collaborations selectively conducted in firm’s related non-core technological fields promise the best innovation performance. Further, by orchestrating its projects across core and non-core technological fields in the same knowledge portfolio, the firm can leverage a network of inter-connected projects when collaborating with external partners. As such, the firm can strategically “distribute” collaboration risks across multiple projects, while optimize its access to external knowledge that it intends to get. Finally, contrary to the common assumption, this study does not find any discriminating factors against market-based partners in their contribution to innovation in both core and non-core technologies.     

Firm size, web site content, and financial performance in the transportation industry

The transportation industry has been revolutionized by the World Wide Web with the Internet rapidly emerging as the optimal medium for the exchange of information between shippers and carriers throughout the supply chain. Despite this, many motor carrier firms may still not be placing enough emphasis on the Internet. Recent empirical research studies suggest that Internet utilization in the supply chain is significantly influenced by firm size. This study analyzes the informational and interactive content of the Top 100 U.S. motor carrier firms' web sites to examine the relationship between firm size and Internet utilization. In addition, as there is little research that assesses the payoff in terms of benefits for firms that place more emphasis on the Internet for commercial activity, secondary financial data are used to evaluate the association between Internet utilization and firm financial performance in the transportation industry.     

How does customer orientation (in)congruence affect B2B electronic commerce platform firms' performance?

Business-to-business (B2B) electronic platforms have become important channels for transforming traditional modes of transaction. The success of these platforms relies heavily on the platform firms' customer orientation (CO) practices, which are designed to attract both sellers and buyers. This study draws on the cross network effect theory to explore whether and how a B2B e-commerce platform firm's (in)congruent CO strategic initiatives toward sellers or buyers affect the firm's performance. In addition, the moderating effects of seller-side and buyer-side demand uncertainty on the relationship between CO (in)congruence and platform firm performance are investigated. The analysis of data collected from 185 B2B electronic platform firms in China reveals that CO incongruence is more beneficial to firm performance than CO congruence. Furthermore, when seller-side demand uncertainty is high, an increase in seller-focused CO incongruence (i.e., higher seller orientation than buyer orientation) or buyer-focused CO incongruence (i.e., lower seller orientation than buyer orientation) improves or impedes a B2B e-commerce platform firm's performance, respectively. However, when buyer-side demand uncertainty is high, an increase in either type of CO incongruence does not improve firm performance. These findings contribute to the literature on and practices of B2B e-commerce and customer orientation.     

Resolving a dilemma of signaling bankrupt‐firm emergence: A dynamic integrative view

Research summary : Predicting the emergence of bankrupt firms relying on firm signals involves a stigma‐related dilemma. On the one hand, bankrupt firms tend to send positive signals through restructuring to decouple themselves from the stigma of bankruptcy. On the other hand, the preexistence of the bankruptcy stigma may reduce the signaling effectiveness of firms' restructuring efforts, making the outcome prediction difficult. We address this dilemma by developing a dynamic integrative view to extend signaling theory, arguing that subsequent signals from key external stakeholders can effectively help evaluate bankrupt firms' quality and reduce the ambiguity in interpreting firms' restructuring signals. Using a sample of U.S. public bankrupt firms under Chapter 11 reorganization, we find evidence supporting the argument. Managerial summary : Applications of signaling theory to predict reorganization outcomes are in their infancy. The dynamic integrative framework developed in this study is useful in identifying different types of signals and predicting outcomes of firms in crisis. The results of this study can be useful for various decision makers to predict the turnaround potential of bankrupt firms. Our results show that an increase in alliance partners, institutional investors, and securities analysts following a bankrupt firm predicts the firm's reorganization outcome. Moreover, firms that are able to gain positive attention from key stakeholders will also gain positive interpretations of their strategic efforts. Signals from alliance partners and institutional investors amplify the signaling effect of a firm's de‐diversification effort in predicting its reorganization outcome. Copyright © 2015 John Wiley & Sons, Ltd.     

Examining institutional effects on B2B relationships through the lens of transitioning economies

Our study addresses the limited attention paid to the role of indigenous institutional environments in framing the legitimate forms of governance used to shape buyer-supplier exchanges. Drawing on institutional theory and marketing channel literature, the study suggests that the emphasis in buyer-supplier exchanges on communication modalities and norms has much to do with the effectiveness of legal systems in a buyer's country. Three contexts for legitimacy are conceptualized from an examination of exchanges in developed economies with strong formal institutions and transitioning economies with underdeveloped institutions. Using surveys of US buyers to represent strong formal institutional environments, we conclude that buyers heavily influenced by regulative enforcement place a relatively greater emphasis on formal information sharing in their partnership efforts to build trust and enhance supplier performance. From surveys of buyers in India and China, we conclude that buyers place a relatively greater emphasis on informal information sharing when their legitimacy derives from the endogenously enforced moral codes of their private networks. Finally, surveys administered in Brazil and Russia revealed that buyers in environments pressured by the familial loyalty practices of their private networks place a relatively greater emphasis on the norm of solidarity to build trust in their suppliers.     

Supplier evaluation as a new marketing tool

Sales people contacting potential industrial buyers are selling more than just a physical product or a service, they are selling the total benefits offered to the buying firm—the “augmented” product. (P. Kotler, Marketing Management. Prentice-Hall, Englewood Cliffs, NJ, 1976). In today's market, the product benefits that are critical in making a sale are those that a firm adds “to their factory output in the form of packaging, services, advertising, customer advice, financing, delivery arrangements, warehousing, and other things that people value” (T. Levitt, The Marketing Mode. McGraw-Hill, New York, 1969). The salesperson, however, may often err in the presentation of the “augmented” product to the customer due to lack of information on the buyer's needs. These errors are compounded by lack of knowledge about which dimensions of the “augmented” product give the competitive advantage to the firm. This article proposes a new role for supplier performance evaluation that can contribute greatly to the effectiveness of the industrial marketer.     

Technology readiness in a B2B online retail context: An examination of antecedents and outcomes

This paper develops and empirically tests a model that examines the role of technology readiness (TR) in the business-to-business (B2B) context. The research investigates how retailers' TR, and its antecedents, impacts their evaluation of a credence based B2B service, namely web solution service providers (WSSPs). It responds to previous research calls by extending the TR construct from the business-to-consumer (B2C) perspective that is traditional in the extant literature into the B2B domain. The findings of a survey conducted with 133 firms in the retail industry are that TR is an important contributor to the eventual achievement of service quality and satisfaction. The contributions of this study are; first it develops and validates a measure of TR in a B2B context; second it investigates the antecedents of TR in this domain, demonstrating the impact of past inexperience, industry trust and switching costs on firms' level of technology readiness to adopt online operations; and third, it finds that service quality and satisfaction are outcomes of TR. The key management implication for WSSPs is the need to address the TR levels of existing and potential clients if they wish to deliver successful e-business solutions to them. Their clients' TR can be better managed by making the offering more easily understood, building relational rapport, reducing risk perceptions and adopting a client centric perspective throughout the process.     

Behavior based price personalization under vertical product differentiation

We study price personalization in a two period duopoly with vertically differentiated products. In the second period, a firm not only knows the purchase history of all customers, as in standard Behavior Based Price Discrimination models, but it also collects detailed information on its old customers, using it to engage in price personalization. The analysis reveals that there exists a natural market for each firm, defined as the set of customers that cannot be poached by the rival in the second period. The equilibrium is unique, except when firms are ex-ante almost identical. In equilibrium, only the firm with the largest natural market poaches customers from the rival. This firm has highest profits but not necessarily the largest market share. Aggregate profits are lower than under uniform pricing. All consumers gain, total welfare is higher herein than under uniform pricing if firms’ natural markets are sufficiently asymmetric. The low quality firm chooses the minimal quality level and a quality differential arises, though the exact choice for the high quality depends upon the cost specification.