Assessing the market valuation of e‐service initiatives

Purpose – This study aims to examine how e‐service initiatives affect a firm's market valuation. To provide further insight, paper also assesses the impact of technology acquisition mode, the firm's organizational position, industry characteristics, and service introduction strategy on firm value.Design/methodology/approach – Using an event study methodology, we examined the market value of e‐service initiatives through their impact on stock returns‐investors' expectations of firm performance. Based on strategy and marketing theories, we also developed a conceptual framework to examine factors that influence firm performance and value.Findings – Findings include positive abnormal returns accompanying e‐service announcements. Regression results also show market size and firm size have negative effects on valuation while firm experience has positive effects on firm value. Whereas pioneers and late entrants have an advantage over early entrants, firms acquiring needed technology through collaborative R&D or ...

[1]  Moshe Zviran,et al.  User satisfaction from commercial web sites: The effect of design and use , 2006, Inf. Manag..

[2]  Joseph F. Porac,et al.  Are more resources always better for growth? Resource stickiness in market and product expansion , 2004 .

[3]  Zhilin Yang,et al.  Customer perceived value, satisfaction, and loyalty: The role of switching costs , 2004 .

[4]  Jason L. Dedrick,et al.  Information Technology Payoff in E-Business Environments: An International Perspective on Value Creation of E-Business in the Financial Services Industry , 2004, J. Manag. Inf. Syst..

[5]  Thompson S. H. Teo,et al.  A model for Web adoption , 2004, Inf. Manag..

[6]  Jie Lu,et al.  Cost benefit factor analysis in e‐services , 2003 .

[7]  Vernon J. Richardson,et al.  The Value Relevance of Announcements of Transformational Information Technology Investments , 2003, MIS Q..

[8]  H. Yen,et al.  Internet retail customer loyalty: the mediating role of relational benefits , 2003 .

[9]  Varun Grover,et al.  E-commerce and corporate strategy: an executive perspective , 2003, Inf. Manag..

[10]  V. Mahajan,et al.  An analysis of e-business adoption and its impact on business performance , 2003 .

[11]  Rolph E. Anderson,et al.  E‐satisfaction and e‐loyalty: A contingency framework , 2003 .

[12]  Kenneth L. Kraemer,et al.  e-Commerce Metrics for Net-Enhanced Organizations: Assessing the Value of e-Commerce to Firm Performance in the Manufacturing Sector , 2002, Inf. Syst. Res..

[13]  Jeongwen Chiang,et al.  Product development strategies for established market pioneers, early followers, and late entrants , 2002 .

[14]  M. Dekimpe,et al.  The Market Valuation of Internet Channel Additions , 2002 .

[15]  Ho Geun Lee,et al.  Impact of e-Business initiatives on firm value , 2002, Electron. Commer. Res. Appl..

[16]  William T. Robinson,et al.  Is the First to Market the First to Fail? Empirical Evidence for Industrial Goods Businesses , 2002 .

[17]  Rodolphe Durand,et al.  Age, Order of Entry, Strategic Orientation and Organizational performance , 2001 .

[18]  Peggy M. Lee.  What's in a name.com?: The effects of ‘.com’ name changes on stock prices and trading activity , 2001 .

[19]  Akhil Sahai,et al.  Monitoring and controlling Internet based e-services , 2001, Proceedings. The Second IEEE Workshop on Internet Applications. WIAPP 2001.

[20]  Albert L. Lederer,et al.  The Search for Strategic Advantage from the World Wide Web , 2001, Int. J. Electron. Commer..

[21]  R. Amit,et al.  Value creation in E‐business , 2001 .

[22]  Eric Walden,et al.  The Impact of E-Commerce Announcements on the Market Value of Firms , 2001, Inf. Syst. Res..

[23]  Jeff Zabin,et al.  The Seven Steps to Nirvana: Strategic Insights into eBusiness Transformation , 2001 .

[24]  Vernon J. Richardson,et al.  Examining the Shareholder Wealth Effects of Announcements of Newly Created CIO Positions , 2001, MIS Q..

[25]  Steven W. Hartley,et al.  Sales Force Activities and Marketing Strategies in Industrial Firms: Relationships and Implications , 2001 .

[26]  Venkatesh Shankar.  New Product Introduction and Incumbent Response Strategies: Their Interrelationship and the Role of Multimarket Contact , 1999 .

[27]  R. Keeney,et al.  The Value of Internet Commerce to the Customer , 1999 .

[28]  Charles Steinfield,et al.  Electronic Commerce and the Local Merchant: Opportunities for Synergy Between Physical and Web , 1999, Electron. Mark..

[29]  Efraim Turban,et al.  Determinants of successful Website design: relative importance and recommendations for effectiveness , 1999, Proceedings of the 32nd Annual Hawaii International Conference on Systems Sciences. 1999. HICSS-32. Abstracts and CD-ROM of Full Papers.

[30]  S. Sengupta,et al.  Impact of Strategic Alliances on Firm Valuation , 1998 .

[31]  Gregory S. Carpenter,et al.  Late Mover Advantage: How Innovative Late Entrants Outsell Pioneers: , 1998 .

[32]  Gary L. Lilien,et al.  Generalizing about Trade Show Effectiveness: A Cross-National Comparison , 1997 .

[33]  John G. Lynch,et al.  Interactive Home Shopping: Consumer, Retailer, and Manufacturer Incentives to Participate in Electronic Marketplaces , 1997 .

[34]  Abagail McWilliams,et al.  Event Studies In Management Research: Theoretical And Empirical Issues , 1997 .

[35]  Rolph E. Anderson,et al.  Multivariate data analysis (4th ed.): with readings , 1995 .

[36]  Charles H. Kriebel,et al.  Information Technologies and Business Value: An Analytic and Empirical Investigation , 1995, Inf. Syst. Res..

[37]  D. Bowman,et al.  Determinants of Competitor Response Time to a New Product Introduction , 1995 .

[38]  D. Reibstein,et al.  Competitive Marketing Behavior in Industrial Markets , 1994 .

[39]  David J. Miller,et al.  Competitive attack, retaliation and performance: An expectancy-valence framework , 1994 .

[40]  Wallace N. Davidson,et al.  The Stock Market Effects of CEO Succession in Bankrupt Firms , 1993 .

[41]  G. Tellis,et al.  Pioneer Advantage: Marketing Logic or Marketing Legend? , 1993 .

[42]  Ken Peffers,et al.  The Impact of Information Technology Investment Announcements on the Market Value of the Firm , 1993, Inf. Syst. Res..

[43]  T. Devinney,et al.  The Impact of New Product Introductions on the Market Value of Firms , 1993 .

[44]  William T. Robinson,et al.  Are market pioneers intrinsically stronger than later entrants , 1992 .

[45]  G. Kalyanaram,et al.  Dynamic Effects of the Order of Entry on Market Share, Trial Penetration, and Repeat Purchases for Frequently Purchased Consumer Goods , 1992 .

[46]  Briance Mascarenhas.  Research notes and communications first‐mover effects in multiple dynamic markets , 1992 .

[47]  Ekkehart Boehmer,et al.  Event-study methodology under conditions of event-induced variance , 1991 .

[48]  Barton A. Weitz,et al.  Brand Introduction Strategies and Competitive Environments , 1990 .

[49]  Charles C. Snow,et al.  Stock market reaction to strategic investment decisions , 1990 .

[50]  G. Lilien,et al.  The timing of competitive market entry: an exploratory study of new industrial products , 1990 .

[51]  James Jd,et al.  Strategic Market Planning , 1990 .

[52]  Peter Tufano,et al.  Financial innovation and first-mover advantages , 1989 .

[53]  W. Mitchell.  Whether and When? Probability and Timing of Incumbents' Entry into Emerging Industrial Subfields , 1989 .

[54]  W. T. Robinson.  Marketing Mix Reactions to Entry , 1988 .

[55]  M. Lambkin.  Order of entry and performance in new markets , 1988 .

[56]  D. B. Montgomery,et al.  First‐mover advantages , 1988 .

[57]  T. S. Robertson,et al.  Competitive Effects on Technology Diffusion , 1986 .

[58]  C. Fornell,et al.  Sources of Market Pioneer Advantages in Consumer Goods Industries , 1985 .

[59]  Jerold B. Warner,et al.  Using daily stock returns: The case of event studies , 1985 .

[60]  R. D. Buzzell,et al.  Product Quality, Cost Position and Business Performance: A Test of Some Key Hypotheses , 1983 .

[61]  K. R. Harrigan.  Barriers to entry and competitive strategies , 1981 .

[62]  D. Abell,et al.  Defining the Business: The Starting Point of Strategic Planning , 1980 .

[63]  Rolph E. Anderson,et al.  Multivariate Data Analysis with Readings , 1979 .

[64]  Robert B. Woodruff,et al.  A systematic approach to market opportunity analyses , 1976 .

[65]  R. Rothschild.  A NOTE ON THE EFFECT OF SEQUENTIAL ENTRY ON CHOICE OF LOCATION , 1976 .

[66]  Erin Anderson,et al.  The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis , 2008, Mark. Sci..

[67]  V. Zeithaml,et al.  E-S-QUAL A Multiple-Item Scale for Assessing Electronic Service Quality , 2004 .

[68]  Toru Yoshikawa,et al.  Technology development and acquisition strategy , 2003, Int. J. Technol. Manag..

[69]  M. Gilly,et al.  eTailQ: dimensionalizing, measuring and predicting etail quality , 2003 .

[70]  Kevin Celuch,et al.  Technology Readiness in the E-Insurance Industry: An Exploratory Investigation and Development of an Agent Technology E-Consumption Model , 2002 .

[71]  Allard C. R. van Riel,et al.  Exploring consumer evaluations of e‐services: a portal site , 2001 .

[72]  L. Gary,et al.  ABELL F. Dereck, Defining The Business. The Starting Point of Strategic Planning . USA, Prentice Hall, Englewood Cliffs, New Jersey, 1980. , 1996 .

[73]  Andrew Whinston,et al.  Frontiers of Electronic Commerce , 1996 .

[74]  G. Kalyanaram.  Empirical modeling of the dynamics of the order of entry effect on market share, trial penetration and repeat purchases for frequently purchased consumer goods , 1989 .

[75]  H. Igor Ansoff,et al.  Implanting Strategic Management , 1984 .

[76]  L. Duetsch.  STRUCTURE, PERFORMANCE, AND THE NET RATE OF ENTRY INTO MANUFACTURING INDUSTRIES* , 1975 .