The strategic interplay between logistics and market development : and the influence of electronic commerce

Abstract: The overall purpose of this study is to describe and analyze how logistics and market development interplay. In order to do this the research topics are to analyze what the requirements on logistics are from a changing marketing strategy, as expansion or changed customer focus, and how logistics may support continued market development. This is particularly interesting when the business environment is changing. Within the research topics Internet-based electronic commerce is given attention, firstly as a marketing channel sensitive to business changes and secondly as an integrated part of marketing and logistics development. In all parts of the study, the choice of processes, structures and organizations of logistics have been in focus, here labelled logistics.The study consists of three parts and a cover. The cover synthesizes and summarizes the parts - one case study and two journal papers. The case study is a study over time of a medium-sized Swedish distributor selling tools and machinery to Nordic industrial sectors and the Baltic States. The distributor has gone through a change in marketing strategy and implemented an electronic commerce portal, which makes it interesting to study. In the journal papers the research topics are further elaborated and analyzed. The first journal paper focuses on the requirements, and the second paper on the contributions created, even though they overlap. In both parts electronic commerce has been considered an important element. In-depth interviews have been performed in the main case study object but also in two other distributors concerning electronic commerce possibilities. The case study describes the development of the case considering changes in marketing, logistics and electronic commerce strategy. It shows how the case company goes through a strategic change that involves expansion, the use of electronic commerce and changed logistics processes, structures and organizations. In journal paper one the market channel possibilities are analyzed for the case and how these require changes in logistics. It is concluded that with an increased environmental insecurity the need of strategic flexibility increases in new marketing channels and as a consequence the need for a centralized logistics organization. In journal paper two is the electronic commerce support for market and logistics development analyzed for three different distributors. It is concluded that electronic commerce efforts need to start at an activity level, but constantly widen the scope. A stepwise approach is outlined that combines market repositioning and logistics refinement. Support for how electronic commerce contributes to market and logistics development is found.This study supports previous research that claims that organizational integration between logistics and marketing is important. In a changing business environment organizational issues become the main focus in logistics. The need for centralized responsibility to tackle new and changing market requirements is outlined as essential in combination with a greater amount of internal collaboration through informal communication. In this study, the organization of logistics has been argued to have a decisive impact on the ability to find the best strategies that integrate logistics and marketing. Therefore organizational issues precede process and structural change. Electronic commerce and structural change become parts of a strategy to adapt to a continuously changing business.Electronic commerce, logistics process, organizational and structural development contribute to marketing development in different ways by combining cost, service and flexibility in logistics. The stepwise approach signals that to come further with electronic commerce, different lines of action in logistics are needed, such as process streamlining to create better co-ordination and customer service or structural change to further expand the market. Accordingly, different logistics strategies are adaptable to different marketing strategies. However, a centralized logistics organization is argued to be a pre-requisite to become strategic flexible for new marketing strategies and being able to create the necessary interplay between marketing and logistics.