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B2B E-Marketing Strategies of Multinational Corporations: Empirical Evidence From The United States and Australia
B2B E-Marketing Strategies of Multinational Corporations: Empirical Evidence From The United States and Australia
B2B E-Marketing Strategies of Multinational Corporations: Empirical Evidence from the United States and
Australia
Tanuja Singh Geoffrey Gordon Sharon Purchase
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To cite this document:
Tanuja Singh Geoffrey Gordon Sharon Purchase, (2007),"B2B E-Marketing Strategies of Multinational Corporations: Empirical
Evidence from the United States and Australia", American Journal of Business, Vol. 22 Iss 1 pp. 31 - 44
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Abstract
This study empirically examines the role of the Internet in global business-to-
business (B2B) marketing strategies of Multinational Corporations (MNCs)
based in the United States and Australia. The results demonstrate that uses
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of the Internet in a global B2B setting often parallel its domestic uses but that
variables that facilitate or inhibit its implementation for global operations are
somewhat different in global markets. The findings suggest that MNCs in the
two countries are using the Internet in their global B2B operations predomi-
nantly for business enhancement purposes as compared to revenue enhance-
ment. Results also show that for global B2B operations, the Internet is viewed
by MNCs as a tool to enhance competitive intelligence, streamline opera-
tions, and enhance the marketing processes. It is also deemed essential for a
firm’s long-term competitive stance by large as well as small and medium-sized
MNCs.
Introduction Hegde 2004). While the business- large and small, may have asked
The Internet continues to be to-consumer (B2C) models of the themselves the question of whether
viewed as one of the revolutionizing Internet and e-commerce continue or not to move their business to
tools that has radically changed the to garner the most press, Internet the Internet. Today, companies no
dynamics of commerce around the revenues in the business-to-business longer ask themselves that question
world. Despite the fact that early es- (B2B) sector are not only signifi- for the answer is simple; they can no
timates of the potential of this tool cantly higher, they have also largely longer exist without somehow being
have been subject to frequent and remained shielded from fluctuations on the Internet (Lichtenthal and
dramatic revisions, the Internet has of the B2C sector. Eliaz 2003).
nevertheless created a paradigm shift Estimates suggest that B2B While researchers have addressed
in the business world. In this brave, electronic commerce amounts to the B2B uses of the Internet within
new world of business, a firm’s cor- about six times the size of the B2C a domestic (often U.S.) context,
porate website acts as the gateway sector (Eng 2004). B2B trade around academic inquiry for global B2B op-
for visitors and potential customers the world was expected to total erations, particularly as it relates to
to find critical information about around $2.7 trillion by the end of marketing strategies of multinational
the company as a whole, as well as 2004 (eMarketer 2003). Further- corporations (MNCs), still remains
its product/service offerings (Leek, more, studies indicate that the U.S. a fertile area for research. Few stud-
Turnbull and Naude 2003). E-com- continues to account for more than ies, if any, have empirically examined
merce is becoming more and more a half of the worldwide B2B revenues the nature and scope of the Internet
major element of competitive advan- (eMarketer 2003). [All data are in for B2B marketing within a global
tage for those firms savvy enough to U.S. dollars unless stated otherwise.] context. For example, while it is
harness its potential (Radovilsky and Eight to ten years ago, B2B firms– well documented that developed
countries lead the world in Internet Background and B2B E-Commerce in the U.S.
applications and e-commerce, little Hypotheses and Australia
is known about whether and how It is evident that several charac- B2B transactions continue to grow
MNCs from these countries inte- teristics of the Internet make it an es- in the U.S. According to IDC, B2B e-
grate the Internet into their overall pecially valuable tool for the B2B sec- commerce spending should continue
global strategies. Furthermore, the tor. From simplifying data collection at a 50 percent growth rate through
factors that influence the decision of and delivery to enhancing product 2007 (Schifrin 2004). While esti-
MNCs to make the Internet an in- management/innovation activities mates vary considerably, the volume
herent part of their global marketing and improving collaboration among of B2B e-commerce far exceeds that
strategy have not been examined. strategic partners, the Internet offers of B2C e-commerce (Dinlersoz and
“
Hernandez-Murillo 2005). The U.S. is
expected to remain the largest global
“
…the factors that influence the decision of
MNCs to make the Internet an inherent part
of their global marketing strategy have not
market for B2B commerce and the
absolute size of the B2B market is
far smaller in Australia relative to the
U.S. However, B2B transactions and
been examined. investment into related technologies
are rising in Australia and its trends
mirror that of the U.S. For example,
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This study attempts to fill this numerous opportunities for en- forecasts of B2B revenues in Aus-
knowledge gap by investigating the hanced value delivery. Furthermore, tralia for the year 2002 ranged from
role of the Internet in the global B2B the benefits of using the Internet $6-$20 billion Australian dollars and
marketing strategies of MNCs from in the B2B sector are long-term and some believe that by the end of 2005,
two developed countries where the more likely to be shielded from the this sector would have generated
growth of the Internet has followed fluctuations that characterize the $133-$235 billion Australian dollars.
a similar pattern—the United States B2C sector. The migration to e-com- In the time period 2001-2003, the
and Australia. These two countries merce is not only a growing trend amount of selling by Australian firms
have numerous similarities in terms but also an irreversible one as more via the Internet more than doubled
of technology adoption; technol- and more business organizations are and the number of companies that
ogy trends in the two countries determining that in order to be effec- garnered 5 percent or more of their
also suggest a similar evolution- tive competitors in today’s market- business income from the Internet
ary pattern for both B2B and B2C place, they need a solid e-business grew from 37 percent to 42 percent
markets. Currently, Australia, with foundation (Leu, Addo and Chen of Australian firms (Australian Bureau
68.4 percent of the population using 2003). Supposedly, the primary dif- of Statistics 2005). Further, spend-
the Internet, is among the leaders ference between domestic e-business ing on Internet technologies and
in Internet penetration; this num- and international e-commerce is one other web initiatives by businesses
ber is quite comparable to the U.S. of complexity (Xu, Wilkinson and continues to increase in both coun-
where at last count 68.6 percent of Brouthers 2002) but the fundamental tries. In Australia, 66 percent of the
the population was on the Internet driving forces are very similar. There- nation’s top 1,000 companies are in
(Internet World Stats 2005). fore, it appears reasonable to propose the planning or execution stages of
This paper has three main objec- that MNCs should benefit from B2B projects (Bryan 2005). The on-
tives. First, it examines how MNCs incorporating the Internet into their line procurement market continues
from the two countries, Australia global marketing strategies as well. to grow in Australia at a compound
and the United States, currently use In particular, the Internet in global annual rate of about 25 percent (IDC
and plan to use the Internet and B2B operations should facilitate Research 2001).
related technologies in their global tasks such as communicating with Research findings suggest that
B2B marketing strategies. Second, suppliers, customers, and partners within the Australian commercial
the study examines the underlying who often tend to be located globally sector, businesses, irrespective of
dimensions and nature of Internet these days. Further, it should help their size, are adopting Internet
use in the MNCs’ global B2B opera- reduce product development costs technology; more than half of the
tions. Finally, it evaluates facilitators and enhance productivity by facilitat- small businesses in Australia now use
and barriers to the implementation ing more efficient collection, sharing, the Internet. Over the past several
of Internet-based marketing strate- and dissemination of information, years, the Australian Government
gies in a global B2B setting. among other things. has introduced a B2B incentive
scheme designed to attract small- and e-commerce within an organization’s that the same drivers would apply in a
medium-sized business enterprises to current domestic operating systems, global B2B setting as well.
electronic commerce (Byrne 2002). the greater the pervasiveness of B2B Along the same lines, a report
During 2002-2003, the Australian e-commerce should be on a global by the Organization for Economic
Bureau of Statistics reported that level (Claycomb, Iyer and Germain Cooperation and Development
the value of e-commerce was ap- 2005). In general, researchers have (OECD) (cited in Dunt and Harper
proximately $24.3 billion Australian drawn on several frameworks to 2002) identified three variables that
“
dollars, representing a doubling of
income over a one year period. This
amount constituted 1 percent of …while smaller companies will implement the
total income for all businesses and
approximately 5 percent of total
income for businesses which received
orders via the Internet (Australian
Bureau of Statistics 2005). Australia’s
Internet into their global B2B operations primarily
to overcome size barriers, larger companies are
more likely to use it strategically and incorporate
“
leading advertisers were reported
it into a variety of their operations.
to be allocating 9 percent of their
advertising budget to the Internet
in 2005 (Kelly 2005). The Australian evaluate how the Internet is trans- are driving B2B e-commerce growth.
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government is among the leaders in forming or would transform the B2B First, transaction cost reductions
terms of e-Government development marketplace. For example, several and improvement in product qual-
and Internet usage among the general researchers (Berthon et al. 2003; ity and service drive e-commerce
population continues to grow as well Kaefer 2004; Grey, Olavson and Shi growth. For example, e-commerce
(IDC Research 2002). 2005) use a transaction cost perspec- applications can run virtually around
In essence, the e-business outlook tive to suggest that not only does the the clock with transactions originat-
for Australia looks promising and the Internet reduce transaction costs but ing from anywhere around the globe
evolution and growth of the Internet that it also reduces barriers to entry (Murthy 2004). Second, companies
in Australia have been very similar to and intermediation between buy- often embrace e-commerce as a reac-
their growth in other developed econ- ers and sellers. They point out that tion to competitors that have already
omies including the U.S. Therefore, it transaction cost savings alone (from embraced it. Finally, businesses are
appears plausible to hypothesize that B2B exchanges) could be a substantial demanding e-commerce readiness
despite the difference in the absolute portion of total cost and order fulfill- from their suppliers. Clearly, these
size of e-commerce in the U.S. versus ment. drivers are equally applicable in a
Australia, U.S. and Australian MNCs The Internet reduces the costs of global B2B e-commerce setting. As
would not differ much in terms of search, information, and bargaining competition becomes increasingly
their overall usage of the Internet for for buyers while at the same time global, transaction cost concerns,
their global B2B marketing opera- creating substantial efficiencies in competitors’ investments into In-
tions. Accordingly, it is proposed that: the buyer-seller dyad by reducing ternet technologies and demands of
communication, decision, policing business partners would necessitate
H1: There are no differences between and implementation costs. These investments into Internet technolo-
U.S. and Australian MNCs in researchers further suggest that the gies to facilitate everything from data
terms of their Internet usage for resulting efficiencies are more than collection to competitive intelli-
global B2B marketing operations. merely cost savings for participants in gence. In general, the larger the size
the exchange. They believe that the of the company, the more likely it is
Internet and Global B2B quality of intra-firm as well as inter- that transaction cost improvements,
Marketing firm transactions is enhanced as cost- competitors’ offerings and reactions,
While the role of the Internet in cutting is coupled with value-added as well as suppliers’ demands drive
global B2B marketing has not been outcomes for participants in the the implementation of Internet tech-
specifically addressed in previous em- exchange. In essence, the Internet nologies to a larger extent. Further-
pirical studies, it is logical to assume improves informational access and more, while smaller companies will
that many of these uses should paral- furnishes a platform of instant and implement the Internet into their
lel the domestic uses of the Internet. constant connectivity while simulta- global B2B operations primarily to
Further, it should make sense that neously allowing firms to reduce costs overcome size barriers, larger compa-
the greater the pervasiveness of B2B (Sharma 2002). It appears plausible nies are more likely to use it strategi-
cally and incorporate it into a variety the benefits of the Internet can be exchange aspect but in information
of their operations. Therefore, it can conceptualized along several dimen- and strategic partnerships manage-
be reasoned that there will be some sions: business enhancement and ment with an emphasis on providing
differences between larger versus revenue enhancement with the two solutions. They propose that in order
smaller companies in terms of how not mutually exclusive. Business en- to realize the real potential of the In-
they use the Internet for global B2B hancement applications include such ternet, companies must incorporate
transactions. things as improved communication its value dimension into their long
Others (e.g., Quelch and Klein with customers, suppliers and other term strategies.
1996; Sotgiu and Ancarani 2004) stakeholders; information collection Murphy et al. (2003) found that
companies that generate 5 percent
“
or more of their revenues from the
… in addition to company size, whether Internet consistently assign higher
importance to the informational
or not the company derives a significant
percentage of its revenues from its global
operations should also influence the role of
“ aspects than do others. Ozer (2004)
has proposed that the use of the
Internet in New Product Develop-
ment is positively related to the
the Internet on the company’s operations. determinants of new product success.
Arguably, companies with higher rev-
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larger companies with higher Third, even though MNCs can that larger companies that have sig-
revenues relative to smaller and succeed in setting up and operat- nificant investments into their global
medium-sized companies. ing global e-commerce operations, operations may view these barriers as
they still may not be utilized due to something they must overcome, and
H3: Internet applications for global B2B basic business issues. In an examina- are unlikely to be deterred by them.
commerce will be more pervasive tion of why so many forest industry Finally, from a resource perspective,
among companies that derive a sig- dot.coms failed, Shook, Vlosky and larger companies should be able to
nificant percentage of their revenues Kallioranta (2004) found that while overcome these constraints more
from their global B2B operations. many companies rushed to set up effectively.
Internet-based operations, custom-
Constraints of Internet Use in ers did not use the services and H4: Perception of barriers to imple-
Global B2B Marketing product provided because: 1) they mentation of Internet technologies
There are many constraints which lacked human interaction; and 2) in for B2B marketing will differ as a
could potentially limit the use of the many instances, the Internet op- function of the size and revenue of
Internet by organizations in conduct- erations did not allow customers to the firms.
ing their B2B marketing efforts. In a perform their business better, faster,
global setting, these constraints may and cheaper. In essence, too many In summary, benefits of the
be even more pronounced, posing companies focused on the technology Internet as far as its B2B uses are
a challenge to global e-commerce versus the business process and the concerned include competitive
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operations in the B2B sector. First, customer. Reinforcing the above, intelligence, strategic partnership
it is virtually impossible for one Zank and Vokurka (2003) conducted management, connectivity, commu-
company within an industry to be an empirical study of industrial nity, transaction, and cost reduction.
an island within itself in establishing distributors and manufacturers to The barriers to Internet imple-
e-commerce operations. To a large determine what the major barriers to mentation revolve around technol-
degree, industry-wide information e-business were. Financial cost, lack ogy constraints, security issues and
and business process standards must of standards, technical immaturity, differences in business practices.
be established in order for com- and unprepared trading partners were However, whether the Internet is
panies to succeed in developing a identified as the most likely barriers. used primarily for short-term cost
global e-commerce presence (Temkin Other reasons the authors identified cutting strategies or as a tool to
2001). In order for these standards to as to why barriers exist in establishing develop strategic partnerships in the
evolve, MNCs must overcome fears e-commerce operations within firms B2B marketplace to offer superior
related to the sharing of information include resistance from IT, resistance value to the customer, the manner in
and what can be considered sensitive from manufacturers, resistance from which the Internet is likely to be used
data. distributors, and resistance from for global B2B transactions should be
Second, privacy concerns and customers. relatively similar to how it is used in
security issues also remain con- In general, small firms, as com- domestic operations. Be it domestic
straints which could impede use pared to large firms, are more likely or global businesses, the Internet has
of the Internet. According to to face resource constraints (Dilts the potential to modify the competi-
Chakraborty, Lala and Warren (2004), and Prough 1989). In addition to fi- tive environment and all participants
Internet users have concerns over nancial constraints, small companies in the business market are likely to
how websites acquire, use, and share are also more likely to lack manage- be affected by e-commerce, regard-
identifiable information. Likewise, rial and technical expertise and prone less of whether they are proactive
several researchers (i.e., Temkin to pursue less aggressive strategic about adoption or not (Pires and
2001; Chakraborty, Lala and Warren options (Larson, Carr and Dhariwal Aisbett 2003). Further, many uses
2004) point to the lack of security 2005). As a result, smaller companies of the Internet for the B2B sector
associated with the transmission of may be reluctant to pursue e-com- might indeed be similar to its uses for
data and the storage of transactional merce initiatives particularly for their the B2C sector. However, structural
information by a website as reasons global operations. Conversely, it can (e.g., regulatory and technological
why organizations could choose not be argued that larger companies are environment) and functional (e.g.,
to pursue Internet applications for more likely to find ways to circum- technology availability and techno-
B2B commerce, particularly in a vent the various constraints in the logical competence) factors in the
global setting where standards of data expectation that these constraints are global environment may influence the
protections may be quite different likely to diminish or even disappear degree to which Internet technolo-
from their home countries. over time. Additionally, it is possible gies are used in global operations.
executives who are directly respon- than 50,000 employees with about 3 ect a uniform image of the company,
sible for global marketing operations. percent reporting more than 100,000 and as a tool to inform partners about
Respondents include international employees. Australian companies new product offerings. U.S. compa-
vice presidents, directors, export are much smaller with approximately nies also report using the Internet as
and import managers, and in a few 85 percent having less than 5,000 a product development tool in the
instances, company owners. One employees and 15 percent report global B2B context. Australian compa-
hundred forty-one completed surveys employing between 5,000 to 50,000 nies report using it to provide support
were returned; two responses were people. and service for global partners. It is
discarded due to incomplete informa- It is worth noting that relative to pertinent to mention that other uses
tion for key variables. The final sam- the Australian sample, more firms in of the Internet such as providing pric-
ple size of 139 constitutes a response the U.S. sample derive a significant ing details and order customization,
rate of 13.4 percent for the U.S. Four percentage of their revenues from processing, and fulfillment are also
hundred ninety-one surveys were sent global operations. For example, reported in the two samples although
to company executives in Australia 44 percent of the firms in the U.S. they do not constitute the most com-
using a commercial database that sample derive more than 25 percent mon uses. Eighteen percent of U.S.
indicated the global B2B involvement of their revenues from global sources companies and about 26 percent of
of these firms. Fifty-eight usable whereas for the Australian firms this Australian companies note that the
responses were obtained from this number is 21 percent. The same is Internet is used to develop custom-
sample resulting in a response rate of true of profits with 36 percent of the ized applications targeted especially at
11.8 percent. U.S. firms reporting that profits from their global partners.
Descriptive analyses were con- global operations comprise more These results suggest that while
ducted to assess sample characteris- than 25 percent of total profits; only many of the uses of the Internet ap-
tics and analyze other information 23 percent of Australian MNCs have pear to be strictly uni-directional such
regarding the MNCs’ global opera- comparable figures. Sixty percent as providing information and display-
tions. Almost all firms had global of the U.S. companies report that ing merchandise (sometimes labeled
revenues and all reported using the all products available for sale in “brochureware”), other uses such as
Internet to conduct at least some the U.S. are also available for sale information collection and creating
part of their global operations. To in global markets; this number for strategic partnerships are character-
assess dimensionality of Internet use, the Australian sample is 55 percent. ized by interactivity and competitive
data from the U.S. and Australia were Thirty-eight percent of companies in intelligence. For example, approxi-
combined and subjected to a factor the U.S. sample sell directly to their mately 42 percent of the U.S. respon-
analysis. Additionally, univariate tests global customers, 15 percent use dents and 25 percent of the Australian
and Analysis-of-Variance (ANOVA) intermediaries, and 47 percent use a respondents report that the Internet
tests were conducted for hypothesis combination. These numbers are 35 is used by their companies as an
testing. percent, 12 percent, and 19 percent information collection and handling
to project a uniform 59 60
and service to global
global image
partners net is used in differentiating tool. It is also possible
The Internet as a their firms as a that the currently reported uses of the
The Internet as a tool to
tool to inform global tool to enhance Internet add more value to an MNC’s
inform global partners 57 59
about product offerings
partners about product communica- global operations and using the Inter-
offerings
tion with global net for these activities results in the
The Internet as a prod-
The Internet as a tool customers and highest levels of efficiency. Finally, it
54 to project a uniform 53 suppliers (p is quite likely that the reported uses
uct development tool
global image
=.439; F =.602). of the Internet in a global B2B setting
Further, respon- are relatively easy to implement and
** Note: Only those uses that were reported by 50% or more companies
in the two samples are shown here. This list is not exhaustive. dents in both unlikely to be thwarted by country-
samples view specific factors such as the regulatory
the future uses climate or data security issues.
device for their global operations. of the Internet
Respondents in both samples also for global B2B operations to be more Underlying Dimensions of
report transaction-centered uses such encompassing and sophisticated. Internet Use in Global B2B
as order placement and processing Mean values for the statement “Inter- Operations
even though these uses are less com- net technologies have an important A principal components analysis
mon than information-centered uses. strategic role in our global business with a varimax rotation was con-
Only 20 percent of the respondents in operations” are 3.43 and 3.73 respec- ducted to assess whether there are
the U.S. sample and 10 percent of the tively for the U.S. and Australian common underlying dimensions of
respondents in Australia report that it samples (p = .065; F = 3.443). Similarly, Internet use for B2B operations in the
is possible to customize and place an respondents in both samples agree two countries. This analysis resulted
order using the company website. that Internet technologies will play a in a 6-factor solution explaining about
In comparing the responses of U.S. more important role in their future 62 percent of the variance. A variance
and Australian companies regarding global B2B operations (mean values extraction of 60 percent or more is
the current and future roles of the 3.75 and 3.88; p = .416; F = .665). considered satisfactory in the social
Internet, results suggest that their In analyzing the results, it becomes sciences, particularly in exploratory
strategies and views seem almost evident that at the present stage, the research (Hair et al. 1998). Most fac-
identical. Results indicate that not most common uses of the Internet tor loadings were above .50, indicating
only are current uses of the Internet in global B2B operations are geared a clean factor structure and minimal
as reported by the two groups quite toward business enhancement and not problems with cross-loading.
similar, their future expectations are specifically toward revenue enhance- The six dimensions address either
almost identical as well. To illustrate, ment, although they might contrib- the facilitating aspects of the Internet
current uses of the Internet in global ute to cost savings (e.g., its product or barriers (inhibitors) to the imple-
B2B operations of MNCs based in development use) and consequently, mentation of Internet. The study
about company requirements. These ability can easily be provided on-line that of collecting, disseminating,
uses enable a company to realize to customers around the world. analyzing and using information
substantial costs savings by using the The fourth dimension, partner gathered from various constituencies.
Internet for routine activities such as relationship enhancement, contains It is labeled competitive intelligence
order placement, while at the same items that address the use of the because it involves information gath-
time creating high exit barriers for Internet in developing long-term ering, analysis and dissemination. It
partners through customized offer- relationships with clients and suppli- views information as a tool to provide
ings that would be hard to duplicate ers. The items suggest that partner superior value to global partners by
by competitors. relationships can be viewed as a offering services tailored to specific
client needs while at the same time
“
using it to keep track of competitors’
activities. The specific items that tap
The fact that companies are investing in into this dimension view the Internet
Internet technologies around the world
suggests that it is being viewed as a long-
term investment and not merely as a tool to
“ as an information collection medium,
as a means to conduct strategic global
research on clients and competitors,
and as a tool to use this information to
generate short-term cost savings. develop long term relationships with
global partners.
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Researchers have addressed how stepwise development process (Aldin, Inhibitors. Items that load on the
the Internet can be used as a market- Brehmer, and Johansson 2004) and a factor labeled inhibitors suggest that
ing and public relations tool to rein- two-way street. In fact, this dimen- the inhibitors to the implementation
force company image worldwide and sion focuses upon service and support of the Internet in B2B global market-
as a means to introduce prospective as well as sharing strategic intelligence ing are primarily partner-specific in-
customers to specific company em- with partners. An example of this hibitors. Previous research suggests
ployees (Ellinger et al. 2003). Further, activity can be found in Siemens’ that market-specific barriers such as
the company can use technological operations; the company utilizes the security and privacy concerns are a
capabilities of the Internet to facili- Internet to simultaneously reduce concern for all organizations (Gao
tate activities such as product devel- its after-sales support (of customers’ 2005) and these barriers did load on
opment by involving relevant people machines) costs while guaranteeing the same factor. However, the factor
from its worldwide facilities. In sum, the shortest response times in the scores were lower than the norm, and
this dimension emphasizes attracting case of problems, a win-win situation thus they were not retained in the
and retaining customers by staying in for both partners (Wucherer 2006). In final analysis. On the other hand,
constant touch with them (Mustaffa keeping with this conceptualization, partner-specific inhibitors are such
and Beaumont 2004). Not surpris- this study found that items in this things as lack of access to the Inter-
ingly, this study found the marketing dimension address the use of the In- net for global partners, the comfort
and image dimension of Internet use ternet to provide service and support, level of global partners in using the
in a global B2B context to be con- to resolve concerns and complaints, Internet, and/or lack of confidence in
sistent with what other studies have and to provide/share information with the technology (Ratnasingam 2005).
reported. This dimension of Internet global partners. These factors may hinder the use of
use consists of items that tap into spe- Perhaps the most profound im- the Internet in a global B2B context
cific marketing functions such as the pact of the Internet on competitive because even though the MNC has
Internet’s use for communicating a intelligence has been that because the required competency to imple-
firm’s product offerings, for informing huge amounts of data are now widely ment Internet-based services, the
partners about new product develop- accessible, customers are now more international partner may have
ment, for projecting a uniform global informed about their options and limited or no access to the Internet,
image, and for merchandise display. thus can negotiate with vendors on a might not be comfortable using it, or
By serving as a brochureware, the more level playing field (Angel 2004). skeptical of the technology’s ability
Internet can replace or supplement Therefore, it is not surprising that to deliver promised results. Further,
traditional means of information dis- the final facilitator dimension labeled research also suggests that there are
semination to various constituents. competitive intelligence is in keeping considerable legal differences among
For example, information regarding with what is often viewed as the most the various markets in the world in
product selection and service avail- obvious potential for the Internet— terms of privacy issues. Companies
Hypothesis Testing H2: Internet applications for global B2B commerce will be more pervasive among larger
Hypotheses were tested using companies with higher revenues relative to smaller and medium-sized companies.
univariate tests and one-way Analysis-
of-Variance (ANOVA). Bonferroni Construct F P
Mean Mean Mean Mean
(Small) (Medium) (Large) (Very large)
post-hoc tests were used to conduct
pair-wise comparisons. Instead of Future Orientation 1.196 .313 3.4643 3.6556 3.5881 3.8105
comparing individual scale items, fac- Operational Efficiency 4.413 .005* 2.7286 2.4625 2.3200 2.8431
tors obtained from the factor analysis Marketing Efficiency 5.750 .001* 3.0313 3.6307 3.2576 3.7745
were used for comparison purposes Relationship Enhancement 2.753 .044* 3.6154 3.4965 3.0870 3.2628
since they encompass the overall
Competitive Intelligence 3.116 .028* 3.1833 3.1915 2.8551 3.2450
dimensions of Internet usage for
MNCs’ global B2B operations. * Significant at <.05
H1: suggests that there are no dif-
ferences between U.S. and Australian
firms in terms of how they use the In-
ternet for their global B2B operations. fulfillment, providing pricing informa- applications as compared to smaller
One-way ANOVA results indicate tion, and offering customized ap- companies.
that except for the dimension labeled plications relative to Australian firms One-way ANOVA results suggest
operational efficiency enhancement, (F(1,180)=4.136 p<.043). Thus, H1 is that there are indeed some differences
there are indeed no significant dif- largely supported. Table 3 contains between larger and smaller companies
ferences between U.S. and Australian results of one-way ANOVA for H1. in terms of their Internet usage for
firms in how they use the Internet H2 suggests that company size global B2B operations. As shown in
and what barriers they perceive in its and revenue have a significant effect Table 4, the effects of revenue are sig-
use for global B2B operations. For on the use of Internet technologies nificant [F(3,179)=4.413, p<.005; and
the operational efficiency dimen- for global B2B marketing decisions. F(3,173)=5.750, p<.001; and F(3,175)
sion, the difference is significant In general, it is hypothesized that = 2.753, p<.044; and F(3,177)=3.116,
with U.S. firms more likely to use companies with higher revenues will p<.028) respectively] for four dimen-
the Internet for such things as order encompass more formal Internet sions of Internet use for global B2B
Future Orientation .259 .772 3.6774 3.7100 3.5521 Discussion and Implications
Operational Efficiency 2.756 .066 2.4125 2.7388 2.6235 Based upon results of this study, it
appears that the predominant model
Marketing Efficiency 1.757 .176 3.4861 3.5815 3.1250
in the U.S. and Australia is the infor-
Relationship Enhancement .174 .841 3.2364 3.2449 3.3725 mation-to-transaction path in terms
Competitive Intelligence .131 .877 3.0659 3.0969 3.1719 of Internet use for global B2B market-
ing operations. Additionally, while
*Not significant the information-to-transaction model
dominates in both countries, the U.S.
MNCs appear to use the Internet
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this study provides strong empirical Internet is beginning to assume in efforts of MNCs from two industrial-
support for the strategic role of the global B2B operations. ized economies, which typically lead
Internet. As discussed earlier, future It is not surprising that the the way to more advanced innova-
orientation appears prominently in predominant uses of the Internet tions. These results also help to verify
the results clearly establishing that involve the facilitation of information the claims of universalization of this
companies in the two countries do exchange between global partners. medium by indicating that more than
indeed view the Internet’s role from a The ability of the Internet to enable anything else, the Internet appears to
strategic long-term perspective. More synchronous as well as asynchronous be an integral part of MNCs’ global
importantly, future orientation does communication makes it an ideal tool marketing strategies. The fact that
not differ as a function of company to disseminate and collect informa- large and small companies view the
size or revenue, further attesting to tion and enhance operational efficien- role of this medium as crucial to their
the emerging view that companies, cy. Further, the inherent interactivity growth and profitability attests to its
irrespective of their size, are embrac- of the Internet makes it a more effec- long-term strategic significance in
ing the Internet, at least in developed tive device for business enhancement global marketing efforts. Additionally,
economies. activities such as dissemination of results of this study demonstrate the
Results of this study confirm that tailored information on the company various ways in which the Internet is
both U.S. and Australian MNCs are and its products to specific audiences. being used in global marketing opera-
using the Internet to replace and/or The evolutionary nature of the tions, and the limitations that compa-
supplement traditional marketing and Internet is also evidenced in this nies must be aware of when deciding
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business functions such as informa- research. It has been suggested to implement it for their global opera-
tion delivery. They are also using it that companies typically follow a tions. It also provides a framework
to develop innovative functions such hierarchical path as they go through for evaluating the value-added nature
as providing customized applications implementing electronic business of the Internet at various stages of
and product development using global strategy models. Some suggest that competitive strategy development for
partners. However, at the present these strategies may be a function of global applications.
time, the primary uses of the Internet such factors as the size and longevity Future research should address
seem to be at an evolutionary stage of the firm (Quelch and Klein 1996; these questions within the context of
in global B2B settings. While the Sharma 2002). However, results of different countries and industries. In
Internet has become a ubiquitous this study suggest that MNC revenue particular, it would be informative to
medium that both large and small is the only factor that affects Internet assess whether MNCs from devel-
companies have adopted for their use for global B2B marketing. Com- oping and newly emerging markets
global operations, it probably remains panies with higher revenues are using view the role of the Internet differ-
underutilized and has significantly the Internet more strategically—they ently for their global B2B operations,
more potential than what is being appear to incorporate it into more and if so, what factors contribute to
currently used. As discussed earlier, functions ranging from competitive these differences. Similarly, it would
companies seem to be using the In- intelligence to improving marketing be useful to assess other potentially
ternet in their global B2B operations efficiency. more advanced uses of the Internet
more for business enhancement as At the same time, Internet usage within global settings including those
compared to revenue enhancement, for global B2B operations does not ap- in developing and newly emerging
albeit both uses are gradually becom- pear to be a function of how globally markets. MAJB
ing complementary. It is important focused a company is. As noted ear-
to note however, that even simple lier, percentage of revenues or profits Note
uses of the Internet such as informa- that were derived from global opera- 1. In this paper the term MNC is
tion collection and dissemination tions did not affect to any significant used to describe firms that have
encompass more than static informa- degree how a company will use the global operations irrespective of
tion—they point to the competitive Internet. It could be that the Internet their size and revenues.
intelligence approach to information, has become such an integral part of
where information is used to deliver today’s competitive environment that References
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