222 Chapter 8 Discussion Introduction This chapter reflects on the ...

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settings. The difficulties of engaging the stakeholders could be eased by the use of more intuitive model visualisation tools, and by using less jargon, for instance. 8.4 Revisiting the Research Hypotheses In this section the findings of <strong>chapter</strong>s five, six and seven are discussed and evaluated against the research hypotheses presented in <strong>chapter</strong> four. It outlines the contribution of this research to knowledge about value chain, e-commerce and intermediation issues. In section 4.2.4 it was hypothesised that market intermediation will remain a very important function in the distribution of the manufacturer’s products, based on the nature of the products, which are generic, and the nature of the market, which is diffuse. In <strong>chapter</strong> five, however, it was seen that there are factors which complicate this analysis, namely that products are increasingly seen as complex in terms of requiring specialist knowledge in developing and marketing them. Management want to promote these ‘specialised’ characteristics of their products and services over the traditional image of ‘off-the-shelf’ products sold by ‘box-shifting’ distributors. E-commerce is part of this developing perspective because it is also seen as enabling greater collaboration in product development as well as facilitating stronger customer relations management. These aims (of management) are not served by market-like interactions but instead require the development of high knowledge and expertise in working with customers. Whilst rejecting market-like arrangements as a solution for these requirements, it should also be recognised that there are problems with vertically-integrated (i.e. hierarchical) operations since, as discussed earlier, it is difficult for the company to achieve an expertise over many different business areas. Drawing upon the fieldwork analysis of the case study, the favoured strategy was found to be one of encouraging more customers to deal through distributors, and encouraging those distributors to provide the required consultancy / technology expertise or advanced e-commerce facilities as their ‘co-specialised asset’. <strong>This</strong> can 235
e described neither as a strict markets nor a hierarchies solution to the distribution arrangement, but a form of tightly-coupled network whose function is best described by the value chain perspective. The effect of the introduction of e-commerce technology is to make production and distribution processes more complex and knowledge intensive. <strong>This</strong> increase in complexity is consistent with the finding that a limited amount of disintermediation was anticipated in the wake of the e-business initiative. However, new opportunities were shown to exist in developing expertise in value-adding activities such as improved inventory management systems or specialist technical knowledge of developing market sectors. Whilst the overall market share of intermediation was expected to go up, there would be increasing competition amongst distributors that would make it an increasingly difficult climate to do business without some kind of ‘advantage’. Furthermore, from the manufacturer’s perspective it was thought imperative that the improvements in the transparency of business information should be carried through to the smaller customers. These two factors (the increasing competition and the information imperative) would likely threaten the intermediaries and lead to a reduction in their number. The case study findings suggested that some of the distributors will struggle to reintermediate themselves under a fully enabled e-commerce system, one where electronic orders might potentially be mandated by the manufacturer. On the future of those distributors, there was detected a very pessimistic view on the part of some respondents. Furthermore, in the literature review there were few actual examples of the disintermediation – reintermediation (IDR) cycle in e-commerce where a particular company has successfully managed to adapt. However, one factor which may have been neglected is the difficulty of setting up the longitudinal case studies required to track such adaptations. <strong>This</strong> could be an area for future research. Experiments with the simulation model looked at the importance of price and technical competence characteristics of the distributors. Comparing across different scenarios, analysis of intermediary performance (market share, profitability and survival rate) suggested that intermediaries profitability is strongly correlated to intermediaries’ technical competence, but it is not correlated to selling price. In 236
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222 Chapter 8 Discussion Introduction This chapter reflects on the ...

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