Acquisition of electronic commerce capability the cases of Compaq and Dell in Sweden

Abstract: Electronic commerce is in a state of growth and the number of firms engaging in electronic commerce has increased rapidly during the late 1990s. As a result, electronic commerce has become an essential part of commercial life. As firms have struggled to implement electronic commerce there have been successes and failures. Hence there is a need to improve our understanding of how electronic commerce can and should be deployed. In this thesis electronic commerce is explored and discussed in terms of what firms need to know and how they can acquire that knowledge in order to engage in electronic commerce to remain or become competitive. The focus is on the process of acquiring new capabilities for electronic commerce. Capabilities are regarded as high-performance routines that can reside within and between organisations and confer a firm with a temporary competitive advantage. These capabilities can be acquired by utilisation of four categories of means: in-house innovation, cloning, collaboration and firm purchasing. Four hypothesises for understanding and explaining capability acquisition are formulated with regard to how the means can be used. By surveying the literature, drawing on numerous research traditions in an eclectic manner, it is posited that the supply of capabilities, the current capability portfolio, the nature and maturity of the firm trajectory, and the performance of the firm influence the capability acquisition process. The cases of Compaq and Dell in Sweden are employed to investigate the issue of capability acquisition. Compaq has utilised an indirect approach working through intermediaries, while Dell has utilised a direct approach working directly with customers. The cases are analysed with the four hypothesises.Five capabilities are identified as critical for electronic commerce: addressability, interactivity, customisation, personalisation and postponement. It is shown that these capabilities are acquired in a process following a trajectory. This process involves suppliers, partners, customers and competitors. It is shown that firms working indirectly acquire capabilities mainly from competitors. In contrast, firms working directly acquire capabilities mainly from customers. Furthermore, working directly with customers – as opposed to working indirectly – is found to be a good vehicle for acquiring electronic commerce capability.