Journal of Business logistics, Vol. 28, no. 2, 2007 ... - Global Initiatives

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122 hult, boyer, and ketchen, Jr.DISCUSSION AND IMPLICATIONSOur study’s results should be viewed in light of its limitations. Different insights might havebeen generated had we asked respondents what their ideal points were and then compared their responsesto the ideal points. This could have mitigated the potential problems involved because somepeople tend to score items more positively. Next, only relatively general conclusions can be drawnfrom our results given that we do not examine all possible intricacies (such as cycle time and pickingcosts) that are associated with each strategy type. As a function of our focus on customers’ repurchaseintentions, we did not study performance effects related to high volume or high profitability customers(although the customers in the overall sample account for over 34,000 purchases and $4 million inhome delivery sales over the length of their relationship with the Internet grocers). As in any surveystudy, additional firms and customers and/or additional industries would enhance the generalizabilityof the results (and possible lead to refinement of the implications).Despite these limitations, our study provides new insights into what drives customers’ behavioralintentions. As shown in Figure 2, our specific focus was on identification of the composition ofquality profiles that drive superior outcomes in each of four operational logistics strategy types. Theprofile-deviator predictor, together with three control variables (attitude toward Internet ordering,online accessibility, and sacrifice) explained between 32% and 41% of the variance in customers’behavioral repurchase intentions (see Table 4). These R 2 values are similar to those found in otherconfiguration studies (Doty, Glick, and Huber 1993; Vorhies and Morgan 2003). As such, the overallimplication of our results is that managers should (a) decide which operational logistics strategy thefirm should follow, (b) adjust the firm’s activities to match the strategy’s requirements, (c) effectivelycommunicate to customers the value-added offered to them by the strategy, and (d) systematicallyassess the alignment of perceptions between best customers on one hand and customers in general onthe other. At the same time, more detailed and intricate implications can be found by examining theresults of each strategy type. In the next sections, we provide a discussion of the results, implications,and future research opportunities of each operational strategy type.Semi Extended StrategyIn the analysis of the semi extended strategy type, we find that the quality-based profile deviationpredictor had a beta = -0.26 (t-value = 4.35). The profile-deviator predictor – together with thecontrol variables – explained 32% of the variance in customers’ behavioral intentions (see Table 4).In examining the quality profile in Table 5, we find that service quality and eBusiness quality appearto be the most critical quality elements in achieving superior repurchase intentions among customers,with product quality slightly lower on the importance scale for customers. Thus, the implicationis that the operational logistics strategy signified by indirect delivery of products and a store-basedorder fulfillment method can be operated the most effectively by stressing service and eBusinessquality over product quality (i.e., stressing the functional component of NSSM – Grönroos 1984). Assuch, the functional quality of order fulfillment is more important to customers than what customersreceive in their interactions with the firm (i.e., the technical dimension of the NSSM school ofthought). As such, firms should spend their limited resources on developing a high-level of servicequality and eBusiness quality prior to investing heavily in product quality initiatives. However, atthe same time, customers buying groceries via the semi extended approach clearly expect the lowest
Journal of Business Logistics, Vol. 28, No. 2, 2007 123level of product quality, despite their preference for service and eBusiness quality. Future researchneeds to determine the lowest level of product quality acceptable to customers interacting with thefirm via the semi extended approach.Fully Extended StrategyIn the analysis of the fully extended strategy type, we find that the quality-based profile deviationpredictor had a beta = -0.41 (t-value = 11.85). The profile-deviator predictor – together with thecontrol variables – explained 41% of the variance in customers’ behavioral intentions. Within thisstrategy and two others (see Table 4), the control variables of Internet ordering and online accessibilitywere not significant. This may reflect that respondents in general were very familiar with theInternet and ordering online. In examining the quality profile in Table 5, we find that service qualityis the most critical element for fully extended types, followed by eBusiness quality and productquality. Thus, in the operational logistics strategy role signified by direct delivery of products anda store-based order fulfillment method, service quality, as a dimension of the functional componentof NSSM (Grönroos 1984) appears to be the most critical. The direct implication is that, assumingproduct and eBusiness quality can be held at a minimum level acceptable to customers, firms shouldspend their resources on improving service quality. As such, the functional quality of order fulfillment(in particular service quality) is more important to customers than the products they receivefrom the firm (i.e., the technical dimension of NSSM). However, to understand the roles of productquality within the framework of the fully extended strategy future research needs to tackle the issueof substitution of products by the firm’s representatives when the product ordered by the customeris not in stock.De-Coupled StrategyIn the analysis of the de-coupled strategy type, we find that the quality-based profile deviationpredictor had a beta = -0.43 (t-value = 9.22). The profile-deviator predictor – together with the controlvariables – explained 37% of the variance in customers’ behavioral intentions. In examining the idealquality profile in Table 5, we find that eBusiness quality is the most critical element, followed by servicequality and product quality. Thus, in the operational logistics strategy role signified by indirectdelivery of products and a distribution center-based order fulfillment method, eBusiness quality, asa dimension of the functional component of NSSM (Grönroos 1984) appears to be the most critical.As such, the implication is that the functional quality of the process (in particular eBusiness quality)is more important to customers than what they “take home” in the form of products (i.e., the technicaldimension of NSSM) or what type of service they receive. These results place a great deal ofemphasis on the firm to maintain user friendliness regarding the technology used to interact with thecustomers. Future research needs to examine what type of web interface or other technological interfacecustomers prefer when they shop for groceries online. It will become paramount to stay updatedtechnologically for firms pursuing a de-coupled strategy.Centralized Extended StrategyIn the analysis of the centralized extended strategy type, we find that the quality-based profiledeviation predictor had a beta = -0.41 (t-value = 10.47). The profile-deviator predictor – togetherwith the control variables – explained 37% of the variance in customers’ behavioral intentions. Inexamining the ideal quality profile in Table 5, we find that service quality is the most critical ele-
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