The European e-Business Report The European e ... - empirica

More documents

Recommendations

Info

The European E-Business Report 2005 • There is a positive interrelation between ICT-related process innovations and profitability. Firms that conducted ICT-related process innovations were 7% more likely to be profitable than otherwise comparable firms. However, this result should not be over-interpreted because our analysis does not allow conclusions about the direction of causality. • The relationship of innovation and financial performance does not vary among size classes. Results suggest that ICT remain important enablers of innovation in the automotive industry, and that innovative firms are more likely to grow. This should improve their chance of survival in an increasingly competitive market. Enterprises with different technology usage patterns An important matter for both business managers and policy-makers is to understand the relationship between technology usage and business performance: Does intensive usage of e-business technologies translate into superior business performance? The 2005 survey results of the e-Business W@tch show that the degree of ICT deployment and usage differs significantly among firms in the automotive industry. Are these technological differences related to differences in firm level growth and profitability? To identify firms that are comparable in terms of the e-business technologies they use, e-Business W@tch conducted a cluster analysis using firm-level information about 14 e-business technologies covered in the e-Business Survey 2005. The following table summarises the main technological characteristics of firms in the four clusters. Cluster Exhibit 2.6-3: Description of clusters Characteristics (1) “ICT laggards” • comprises 75% of firms in the sample • average or below average usage of all ICT indicators • Intranet and ERP are rare among firms in this cluster (2) “ICT followers” • comprises 18% of firms in the sample • Intranet and ERP usage above average • Purchasing and selling online below average (3) “Advanced ICT users” • comprises 5% of firms in the sample • above average usage of most ICT indicators • relatively low usage of online sales, knowledge management and e-learning (4) “ICT leaders” • comprises 2% of firms in the sample • above average usage of all ICT indicators Given these pronounced differences among the four clusters in terms of technology usage and firm size characteristics, it is interesting to observe if any one of these clusters clearly outperforms the others in terms of growth and profitability. The result may come as a surprise. According to statistical tests, the null hypothesis (i.e. that all four clusters are equal in terms of performance) cannot be rejected. Thus, even though some differences among the descriptive statistics describing the average performance of these clusters can be found, none of these differences is unambiguously systematic. Results imply that small and medium sized enterprises in the automotive industry tend to belong to the group of 'ICT laggards'. However, our empirical results do not suggest that these 'ICT laggards' automatically exhibit inferior growth or profitability measures compared to the more advanced users of ICT, which, in this sector, primarily tend to be large global players. One reason for this could be that these two kinds of enterprises often do not compete directly against each other, but rather against firms with similar profiles than their own. Yet, a technological disadvantage compared to direct competitors could be associated with inferior performance. 119
The European E-Business Report 2005 ICT and the automotive supply chain The sector study of 2005 also focuses on the increasing importance of ICT for make-or-buy decisions by companies in the automotive industry. Generally, an OEM or large automotive supplier decides whether to produce goods internally or outsource their production to external companies based on a cost-benefit assessment of the two alternatives. On the one hand, internal production minimises coordination and transaction costs. On the other hand, external providers specialising in a specific task can have economies of scale or specialist knowledge compared to an integrated firm, which gives rise to price or quality advantages. However, outsourcing increases coordination and transaction costs, for example in order to identify suitable providers, to communicate with them, to monitor their progress and outputs, and to avoid predatory behaviour. The availability of powerful and cheap new ICT can decrease transaction costs and therefore increase the attractiveness of outsourcing. If increased ICT usage intensifies the process of integration between separate companies and leads to more outsourcing, the supply chain of the automotive industry may change. A possible outcome would then be the emergence of a network structure in the industry value chain. The OEM’s shift to cooperation with fewer suppliers and closer inter-firm integration is related to the emergence of strategic networks resembling industry clusters like in other sectors, e.g. textile. A possible outcome would then be the emergence of a network structure in the industry value chain. The OEM’s shift to cooperation with fewer suppliers and closer inter-firm integration is related to the emergence of strategic networks resembling industry clusters present in some sectors, e.g. textile. Together with hybrid organization forms and a network-like structure of the value chain, new issues for competition policy emerge. For example, contrary to market organization forms where firms’ profits are determined by price-quantity mechanisms, economic rents in a network structure are divided in the course of bilateral negotiations. Thus, rent allocation is determined by bargaining power and outside options of OEMs and suppliers. This, in turn, might lead to the ‘hold-up problem’, i.e. a situation where an OEM and a supplier may benefit from process integration, but refrain from making necessary investments due to concerns that they may give the other party increased bargaining power, and reduce their own profits. E-marketplaces in the automotive industry Notwithstanding the delayed uptake and problems after the burst of the new economy bubble, online trading platforms ("e-marketplaces") now gain acceptance in the automotive industry. E-marketplaces designed for the automotive industry can be defined according to their ownership structure. For example, there are marketplaces similar to ebay, i.e. the trading platform belongs neither to a buyer nor seller and is administrated and managed by a neutral third party. Another form of e-marketplaces includes consortia established by buyers or sellers. Combining their bargaining power, the owners of an e-marketplace can reduce their transaction costs and obtain better purchasing terms. Examples of such e-marketplace include SupplyOn, a marketplace established by a group of automotive suppliers (see case study "SupplyOn"), and Covisint, a trading and cooperation network founded by the major US OEMs. A large buyer, for example an OEM, can set up a private platform for its supplier network. The industry has 2 categories of e-markets: • Large e-marketplaces that have developed advanced logistic services and enable companies to manage global transactions (e.g. SupplyOn, Covisint), • Small e-marketplaces that have a local orientation and support transactions between buyers and sellers from the area in which they are located. However, e-marketplaces also raise fears among companies in the automotive industry. Automotive suppliers often complain that OEMs use e-marketplaces as a means to increase price pressure and reduce their margins. It therefore still remains unclear what effects they will have on the market structure of the automotive industry in the future. 120
Page 1 and 2:
The European e-Business Report 2005
Page 3 and 4:
The e-Business W@tch The European C
Page 5 and 6:
The European E-Business Report 2005
Page 7 and 8:
Page 9 and 10:
Page 11 and 12:
Page 13 and 14:
Page 15 and 16:
Page 17 and 18:
16 The European E-Business Report 2
Page 19 and 20:
The European e-Business W@tch Secti
Page 21 and 22:
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Page 51 and 52:
Types of ICT solutions used and pro
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Page 77 and 78:
Page 79 and 80:
Page 81 and 82:
Page 83 and 84:
Page 85 and 86:
Page 87 and 88:
Page 89 and 90: The European E-Business Report 2005
Page 105 and 106: 84 The European E-Business Report 2
Page 115 and 116: 94 The European E-Business Report 2
Page 125 and 126: 104 The European E-Business Report
Page 139: The European E-Business Report 2005
Page 191 and 192:
Page 193 and 194:
Page 195 and 196:
Exhibit 3.2-1: Greek information so
Page 197 and 198:
Page 199 and 200:
Page 201 and 202:
Page 203 and 204:
Page 205 and 206:
Page 207 and 208:
Page 209 and 210:
Page 211 and 212:
Page 213 and 214:
Page 215 and 216:
Page 217 and 218:
Page 219 and 220:
Page 221 and 222:
200 The European E-Business Report
Page 223 and 224:
Page 225 and 226:
Page 227 and 228:
206 The European E-Business Report
Page 229 and 230:
Page 231 and 232:
Page 233 and 234:
Page 235 and 236:
The E-Business Scoreboard - a two-l
Page 237:
Contact information e-Business W@tc
show all

The European e-Business Report The European e ... - empirica

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?