Going direct to market: the influence of exchange conditions

Article Abstract:

The strategic factors behind a company's decision to bypass intermediaries and go direct to market are examined. It is proposed that the decision-making process involves the evaluation of the benefits to customers of using direct distribution channels and of the transaction costs arising from the use of intermediaries. It is further posited that these assessments are likely to vary under different exchange conditions that reflect the major microcharacteristics of each exchange. Propositions regarding the conditions under which companies might be compelled to use the direct-to-market approach are presented and tested. These conditions relate to information search, technological impact, product criticality, dollar outlay, product customization, auxiliary services and control factors. The empirical results support the hypothesis that customer benefits and transaction costs determine the decision of firms to go direct to market.

Decision-making, Decision making, Distribution channels, Vertical integration

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On the utilization of resources: perspectives from the U.S. telecommunications industry

Article Abstract:

A study was conducted to ascertain why resource utilization differences might occur between firms. This research aims to address the shortage of papers focusing on performance measurement issues in the resource-based approach to strategic research. The telecommunications industry was investigated to explain why certain firms might better employ resources than others. The data envelopment analysis (DEA) was used as a firm-level resource utilization indicator to determine differences in resource utilization between firms. This measure is important to the resource-based approach because it quantifies performance in resource terms. The analysis showed that intrafirm skills affect firm-level resource utilization patterns. However, the empirical investigation is limited since the DEA indices merely offer a first-order measure of skills in utilizing a certain resource mix.

Analysis, Strategic planning (Business), Resource allocation

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Network effects and the adoption of new technology: evidence from the U.S. telecommunications industry

Article Abstract:

A study examined the motivation of firms in a network industry, specifically the local operating sector of the telecommunications industry, for investing in new technology. This analysis focused on three network effects, namely the conversion effect, the consumption effect and the imitative effect. The conversion effect refers to the impact of the size of the physical network while the consumption effect looks at the density and variety of the user population. Data on variations in adoption levels of 40 major firms between 1973 and 1987 were examined. Findings revealed that the conversion effect was felt more intensely during the initial stages of the technology's development. In contrast, the consumption effect was felt strongly throughout the evolution of the technology. Lastly, the imitative effect was not proven.

Telecommunications systems, Science and technology policy, Technological innovations, Telecommunication systems

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