The changing role of middlemen — Strategic responses to distribution dynamics

Middlemen in distribution are challenged by considerable changes in their business contexts.     

Looking through the lens of B2B and beyond...

The systems perspective discussed by Vargo and Lusch (2010) is an intriguing notion that has the potential to spur the development of a unifying theory of marketing. While that may take time to develop, the perspective offers useful ideas for research and practice immediately.     

Dynamic pricing models for ERP systems under network externality

Enterprise Resource Planning (ERP) systems vendors face great challenges to enhance their market position and maximize their profits. Being able to simultaneously predict the diffusion of an ERP and to determine the right price to charge to a customer is a complex task. Earlier work has demonstrated evidence of network effect in the diffusion of ERP software in industries. In light of this evidence, we investigate in this paper the benefit of a dynamic pricing strategy for ERP systems vendors in a business network governed by a quantitative diffusion model. Based on a real scenario in the automotive industry, those quantitative models are integrated into a simulation-based optimization approach to tackle the problem. Our findings are promising and establish the foundation of a powerful decision support tool for ERP systems vendors.     

Network evolution and the embedding of complex technical solutions: The case of the Leaf House network

The purpose of this paper is to investigate the connection between network evolution and technology embedding. To this end, we performed an exploratory case study of the network surrounding an eco-sustainable technology, Leaf House, Italy's first zero-carbon emission house. We apply theories on technological development within industrial networks, with a specific focus on their resource layer and on the three settings involved in embedding an innovation: “developing”, “producing”, and “using”. Our results contribute to these theories by developing four propositions on the connections between network evolution and embedding: first, technology embedding entails both downstream network expansion and upstream restrictions. Secondly, conflicts among actors increase as technology embedding approaches the producing and using settings. Third and fourth, the more the shapes a technology can assume, and the more each of these shapes involves actors acting in different settings, the easier it is to embed it. The paper concludes with managerial implications and suggestions for further research.     

Problem solving in the upgrading of product offerings — A case study from the steel industry

This paper deals with the efforts of suppliers to upgrade their offerings — from standardized products to more advanced and customized solutions. Upgrading requires what has been identified in product development research as ‘problem-solving’ ability on the part of the supplier. The purpose of the paper is to explore the role of problem solving in the three phases of the upgrading process identified in the analytical framework: evaluation, transition, and post-implementation.Owing to the exploratory nature of this research a case study approach is used, describing and analyzing the implementation of two upgraded offerings of a steel company. The study illuminates the problems associated with such changes attributable to interdependences in the customer's current resource set up. The problem-solving ability of the supplier is a key capability in these efforts, also involving resource contributions from the buyer and other network actors.     

Magic pelagic — An agent-based simulation of 20 years of emergent value accumulation in the North Atlantic herring exchange system

This paper presents an empirically-based simulation of an industrial network modeled as an exchange system. It uses a multi-agent simulation model to test for how variations in uncertainty of the input resource and how the changing demand patterns affect the accumulation and distribution of exchange values in the system as a whole. The empirical material is a case study of an industrial network connecting herring supply with demand. This particular network comprises two separate but related sub-networks, identifiable based on the origin of the herring as coming from either Norwegian or Icelandic catchers. While both target the same potential customers in terms of wholesalers and retailers and ultimately European and Asian consumers, they are distinct in their internal organizing aspects. The results indicate that certain types of internal organizing are more adaptive to changes in conditions and are better suited to absorb these changes. The paper contributes to both a theory and method emphasizing the modeling of emergent nonlinear patterns of networks.     

Demand supply network opportunity development processes in emerging markets: Positioning for strategy realization in Russia

This paper aims to shed light on the management of supply chains, or rather, demand supply networks (DSN) in emerging markets by foreign companies. According to our definition, specific DSN opportunity development processes are directed towards better functionality and coordination of product, finance and information flows across the DSN. As a consequence, improved performance of the DSN may be achieved, in order to support and realize competitive business strategy and facilitate value creation for customers. To illustrate the concepts and the model, empirical evidence is presented that establishes the role of changing network structures and incumbent capabilities as constraints for DSN opportunity capture, especially in emerging markets. Our results show that DSN positioning strategies designed to overcome these constraints and facilitate opportunity capture, must be proactive, well-timed and innovative.     

Motives and means for public investment in nationwide next generation networks

There is now strong interest among governments in allocating public funds for the purpose of promoting investment in very high speed broadband. Motives include industrial policy, and the attainment of equity objectives and of economic recovery. The paper examines the various dimensions of choice over where and how to intervene. It also considers three nationwide broadband plans in Australia, New Zealand and Singapore, in each of which industrial policy appears to be the major objective, combined with equity goals. Particular attention is paid to the resolution of problems related to the incumbents’ legacy assets.     

A methodology for the construction of dynamic capabilities in industrial networks: The role of border agents

The article presents a methodology for the formation and functioning of industrial networks that favors the development of dynamic capabilities with regard to the creation, integration, transfer and absorption of knowledge. This methodology has been put into practice in a case study: Lignum Facile. The presence of some misalignments between our initial proposal and its implementation helped us reshape and emphasize particular processes and flows associated to the methodology. Beyond the typical localization and agglomeration advantages, the analysis suggests that the success in the formation and functioning of industrial networks is mainly related to their potential to formulate immaterial relationships capable of stimulating learning processes, the dissemination of technological knowledge and innovative activities. Particularly, we found that the inclusion of border agents – intermediaries between the market and industry such as architects, engineers or designers – is fundamental to develop innovations at the intersection of different scientific and technological disciplines.     

Ex ante regulation and co-investment in the transition to next generation access

Investments in next generation access networks (NGANs) ask for a new set of regulatory remedies. This paper contributes to this debate by focusing on three issues: the migration from the legacy copper network to the NGA infrastructure, and how wholesale pricing regulation might affect this process; the introduction of differentiated wholesale remedies according to geographical differences in NGAN deployment; the impact of co-investment decisions on market outcomes and their interplay with access regulation. Using the recent economic literature, arguments and possible guidelines are proposed, which might be useful to regulators and policy makers.     

On and off the beaten path: The evolution of four technological systems in Sweden

This paper examines four Swedish case studies of technological systems from the perspective of path dependence: what are the similarities and differences in this regard between factory automation, electronics and computers, biotechnology, and powder technology? What are the distinctive features in each system which set it apart from similar systems elsewhere, and what role does path dependence play in explaining these features? The essential function of technological systems is to capture, diffuse, and magnify spillovers of technical and organizational knowledge: therefore, the nature of knowledge (i.e., the characteristics of knowledge and how it can be transmitted) in each system determines what types of spillovers are likely to occur, as well as the mechanisms through which they occur. Other important influences are the initial conditions and the institutions (including both organizations and rules of the game).     

Regulation and the promotion of investment in next generation networks—A European dilemma

The paper discusses the dilemmas facing European regulators (the European Commission and the national regulatory authorities) over the promotion of investment in Next Generation Access Networks (NGANs). Whereas the US has adopted a deregulatory approach and parts of Asia takes an approach linked to industrial policy considerations, the EU has largely left the process to operators working subject to a framework of regulation of access. While this may be enough to elicit investment where there is competition among networks, the incentives to invest are weaker where there is only one fixed network, as is the case in most of the territory of the EU. In reaching this view, the paper examines the prospects for competition from both wireless and municipal networks. It recommends that steps be taken fully to mobilise incentives to invest in NGANs where there is competition. Elsewhere, it may be necessary to consider a broader range of policies to create conditions for investment.     

Business service networks and their process of emergence: The case of the Health Cluster Portugal

Business services have been receiving increasing attention from academics, practitioners and policy-makers. Despite the growing interest, this field of research suffers from several limitations: it draws mostly on services marketing theory, and it is grounded mostly in monadic and dyadic studies. This paper contributes to the advance of business services research by addressing these limitations with regard to a specific service-related issue. We carry out an interdisciplinary study by integrating among others an industrial network approach (INA) into the services area, and we thus develop the research at a network level by adopting a services network perspective; furthermore, the study is carried out in a business-to-business context by looking into a health cluster: the Health Cluster Portugal. The article addresses one particular aspect of business services networks: their emergence. We propose a conceptual framework that draws on process-based research and integrates theories from other bodies of research, allowing a rich understanding of how a business service network is created. Our findings point to discontinuities along the emergence of such networks, showing that there is an iterative process underlying their formation, with different theories playing a predominant explanatory role at different stages. This paper contributes to the wider body of literature on services research by promoting the integration of the INA and other process-related approaches in the area of business services networks, and also provides practitioners and policy-makers with a structured framework to understand how an intentional ‘bottom–up’ business service network may be created or orchestrated.     

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.     

Understanding the links between technological opportunism, marketing emphasis and firm performance: Implications for B2B

The capability of firms to sense and respond to changes in technologies, called technological opportunism, is of growing importance to managers as a source of competitive advantage. However, exactly how technological opportunism impacts firm performance is still not clearly understood. Furthermore, the role of marketing in this relationship, if any, has yet to be examined. Understanding this relationship is critical for marketing managers not only for determining strategic investments of resources but also for demonstrating marketing return on activities. This paper explores the links between technological opportunism and firm performance. The results show that technological opportunism has a strong positive impact on key measures of performance such as firm sales, profits and market value. Importantly, marketing emphasis is the mechanism through which the technological opportunism-performance relationship is achieved. Finally, the impact of marketing emphasis on B2B firms is different than that for B2C firms, highlighting the importance of these activities for B2B marketing managers.     

A unified framework for open access regulation of telecommunications infrastructure: Review of the economic literature and policy guidelines

The concept of open access (OA) plays a central role in the ongoing academic and political debate on the appropriate regulatory framework for next-generation access networks in Europe. However, clear policy conclusions on the effect of OA regulation were usually precluded by a fundamental lack in common understanding what actually defines an OA policy and along which dimensions of OA regulation can be structured. This paper attempts to reconcile these diverse views by offering a definition and a conceptual framework by which OA endeavors can be identified and uniquely classified. The framework encompasses, among others, mandated OA regulation of vertically integrated firms, public-sector participation, co-investments, and OA in the context of vertical separation. Along this framework, the extant economic literature is surveyed with regard to aspects of competition and social welfare, investment and innovation, as well as practical and legal issues. Based on these insights, a policy guideline is developed that shall assist policy makers in identifying the appropriate OA scenario for the regulation of telecommunications infrastructure.     

A conceptual framework for public-private interplay in the telecommunications sector

Public activity in the telecommunications industry has experienced important transformations in the last decade: “reinvolvement” in infrastructure deployment, “innovative” boosting measures, and decentralisation of some decisions. Conceptually, even more important than the measures themselves is the fact that private agents often participate in their realisation and execution. This paper reviews how justifications for public action that would apply to any economic activity area have modelled the public-private relationship in the telecommunications sector. Subsequently, it focuses on the analysis of the new spaces for public-private collaboration that are currently opening up.     

Network location and learning: the influence of network resources and firm capabilities on alliance formation

This paper presents a dynamic, firm‐level study of the role of network resources in determining alliance formation. Such resources inhere not so much within the firm but reside in the interfirm networks in which firms are placed. Data from extensive fieldwork show that by influencing the extent to which firms have access to information about potential partners, such resources are an important catalyst for new alliances, especially because alliances entail considerable hazards. This study also assesses the importance of firms’ capabilities with alliance formation and material resources as determinants of their alliance decisions. I test this dynamic framework and its hypotheses about the role of time‐varying network resources and firm capabilities with comprehensive longitudinal multi‐industry data on the formation of strategic alliances by a panel of firms between 1970 and 1989. The results confirm field observations that accumulated network resources arising from firm participation in the network of accumulated prior alliances are influential in firms’ decisions to enter into new alliances. This study highlights the importance of network resources that firms derive from their embeddedness in networks for explaining their strategic behavior. Copyright © 1999 John Wiley & Sons, Ltd.