Extended

Extended Customizability: 1/ Analyse Extended customizability is known as one of a number of internet drivers. According to Eng. T (European Management Journal, 2004), “with increasing market and technology sophistication, businesses are offering customized and differentiated products or service as part of their value proposition for consumers”. With the help of internet, the firms attain “tailoring individual products or services in a flexible and instantaneous manner, and hence provides extended customizability”. Internet has enabled companies to complement their strength through collaborative supply chains and joint product development. In accordance with Cagliano, Caniato and Spina’s research (2003), information sharing between firms who used the Internet was at a higher value than other firms who used traditional tools. 2/ Apply: The Internet facilitated e-integrators to having a closer relationship with their partners. For example, Amazon UK is running Associate Programme where associates earn referral fees by “drive internet traffic to Amazon.uk through specially formatted link” (www.amazon.co.uk). Using this programme, Amazon not only target more customers but also expands its market. The daily extensive report between Amazon and associates allow both company exchange information on supplies, customers’ need and market trends. Internet also opens opportunities for coalition between non-competing manufacturers or retailers. For instance, Borders is selling their books online through Amazon website. As a result, customers who do not use Amazon but would like to buy books from Borders online must go through Amazon website. From that, they might have interest in other

services of Amazon. In short, “These alliances will offer technology, graphics, creative and fulfill services” (Aldridge, Forcht and Pierson, 1997)

3/ Develop: In the case of customizability, the Internet furthermore allows the users to “customize information, products or services to match individual needs through the use of data capture programs” (Eng, 2004). Many companies such as Amazon using data mining system in order to investigate customer’s shopping behavior. For example, by analyzing transaction over a long time period, the company can track which product attracts more attention or are bought in conjunction with other products. The analyzed data then is stored for future promotion. Customer would receive special offers for the products they had purchased or promote email about familiar products and services. With the opening of information and fast flowing of data over the Internet, “the Internet decreases the discrepancy between relevance of firm’s strategies against the requirements of the market” (Eng, 2004). Merrill Lynch & Co, one of the world leading financial service and investment banking company, has been challenged since the development of e-trading. In order to competing rivals and enable to adapt innovation, the firms launched Merrill Lynch Direct where major financial service is developed and expanded. The scheme is supported by “ambitious collection of partnerships” included marketing, content, service, technology, business, research and development, and international

partnerships (Rowley, 2002). With a well-rounded support, the firm can attain “deeper learning and exchange of complex innovation process” (Eng, 2004) Discussion: According to Eng (2004), firms can benefit from extended customizability in various ways, especially when making decision for creating a right mix for the 4Ps. Customer needs can be tailored based on account histories and other data. Therefore, the firms can produce the right products or service, setting the right price, doing promotion at the right time and place. Moreover, “internet-enabled customization and or/personalization may reduce transaction costs based on complementary strengths, and increase value of interfirm relationships over time that can span beyond regional and national boundaries”

Internet-based drivers Extended Customizability

Theoretical insights

Sources of competitive

Specialized demand

advantage Complementary Strength

Specialization Process

Process integration and intelligence sharing Personalization beyond spatial location (Eng, 2004)

Reference: Cagliano, R., Caniato, F., Spina, G. (2003), “E-business strategy: How companies are shaping their supply chain through the Internet”, International Journal of Operation & Production Management, Vol. 23 No. 10, pp.1142-1162

Eng, T-Y. (2004), “Implications of the Internet for Knowledge Creation and Dissemination in Clusters of Hi-tech Firms”, European Management Journal, Vol. 22, No. 1, pp.87-98 Rowley, J. (2002), “Synergy and strategy in e-business”, Marketing Intelligence & Planning, Vol. 20, No. 4, pp.215-222 Aldridge, A., Fortch, K., Pierson, J. (1997), “Get linked or get lost: marketing strategy for the internet”, Internet Research: Electronic Networking Applications and Policy, Vol. 7, No. 3, pp.161-169 Eid, R. (2005), “International internet marketing: A triangulation study of drivers and barriers in the business-to-business context in the United Kingdom”, Marketing Intelligence & Planning, Vol. 23, No. 3, pp.266-280 “Associate Programme”, Amazon.co.uk http://affiliate-program.amazon.co.uk/gp/associates/join/main.html/026-27354559763650 [accessed 02/03/2007]