Electronic Commerce for Enhancing Business value Through ICT Initiatives: E-commerce for Competitiveness

A Research Paper by:

Shepherd Magombedze
s.magombedze@gmail.com

ABSTRACT

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The use of electronic commerce (e-commerce) globally in businesses has increasingly become a necessary component of business. Although e-commerce is not a new concept in Zimbabwe, businesses have not fully implemented it. E-commerce strategies that are fully integrated into the business’ strategy can be utilised to build sustainable competitive advantage. Through research surveys employing questionnaires and interviews, a research study was done using the manufacturing industry to analyse the degree to which manufacturing companies have embraced e-commerce and how this technology has impacted on business performance. The main objectives of this research was to investigate e-commerce awareness in companies, to investigate companies’ utilisation of e-commerce technologies, to identify major challenges in implementing e-commerce, and to determine if there is a relationship between e-commerce and profitability. The research employed ideographic methods by using surveys and structured interviews to source responses. Judgemental samples coupled with stratification procedures were used to select sample data. Questionnaires were issued out to different levels of computer system users. Descriptive and inferential statistical techniques were used for data analysis. Despite the utilisation of different types of e-commerce, it was established that profitability was minimally achieved from these implementations. The research found out that there was lack of commitment by companies’ management to e-commerce. Despite the above finding, a strong relationship between the level of utilisation of e-commerce and business profitability was established. Businesses therefore need to provide e-commerce training to management and staff so as to be able to reap its benefits. Organisations also need to develop ecommerce strategies which will integrate e-commerce with the business processes specifically the Value Chain process.

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TABLE OF CONTENTS
ABSTRACT...............................................................................................................................i TABLE OF CONTENTS.........................................................................................................iii LIST OF TABLES.....................................................................................................................v LIST OF FIGURES..................................................................................................................vi 1.0 INTRODUCTION AND BACKGROUND........................................................................1 1.1 INTRODUCTION...............................................................................................................1 1.1.1 BACKGROUND..........................................................................................................1 1..1.2 RESEARCH JUSTIFICATION..................................................................................2 2.0 LITERATURE REVIEW....................................................................................................3 2.1 INTRODUCTION...............................................................................................................3 2.2 THE E-COMMERCE CONCEPT.......................................................................................3 2.2.1 THE DEFINITION OF E-COMMERCE.....................................................................3 2.2.2 B2B AND B2C E-COMMERCE .................................................................................5 2.2.3 THE BENEFITS OF E-COMMERCE.........................................................................5 2.2.4 MODELS OF E-COMMERCE....................................................................................7 2.2.4.1 Electronic Areas Model.........................................................................................7 2.2.4.2 The Hierarchical Framework of E-commerce.......................................................8 2.2.4.3 The Electronic Commerce Value Grid..................................................................9 2.2.4.4 Discussion of the various e-commerce models....................................................11 2.2.5 HOW THE INTERNET AFFECTS E-COMMERCE................................................12 2.2.5.1 Positive Effects to a Business..............................................................................12 2.2.5.2 Negative Effects to a Business ............................................................................14 2.2.5.3 E-Commerce effects on Markets.........................................................................15 E-market Commodities....................................................................................................16 2.2.6 INHIBITORS OF E-COMMERCE............................................................................16 2.2.7 DRIVING FORCES OF E-COMMERCE..................................................................17 2.3 THE CONCEPT OF SUSTAINABLE COMPETITIVE ADVANTAGE........................18 2.3.1THE DEFINITION OF SUSTAINABLE COMPETITIVE ADVANTAGE..............18 2.3.4 E-COMMERCE AND COMPETITIVE ADVANTAGE..........................................20 2.3.4.1 Introduction..........................................................................................................20 2.3.4.2 E-commerce’s influence on Operational Effectiveness ......................................20 2.3.4.3 E-commerce’s influence on Strategic Positioning ..............................................22 2.3.4.4 Achieving competitive advantage through e-commerce strategies.....................22 2.4 THE E-COMMERCE VALUE CHAIN FRAMEWORK.................................................24 2.4.2 EXTERNAL, CUSTOMER-SUPPLIER LIFE CYCLE............................................26 2.4.3 INTERGRATING INTERNAL AND EXTERNAL PERSPECTIVES.....................27 2.4.4 APPLYING THE E-COMMERCE VALUE GRID...................................................27 2.5 CONCLUSION..................................................................................................................28 3.0 RESEARCH METHOD AND PROCEDURE..................................................................29 4. RESEARCH FINDINGS.....................................................................................................29 4.3 COMPOSITION OF E-COMMERCE USAGE ACROSS MUNUFACTURING COMPANIES IN ZIMBABWE..............................................................................................30

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4.4 E-COMMERCE UTILISATION.......................................................................................31 4.5 E-COMMERCE STRATEGY EXISTENCE AND LEVEL OF IMPLEMENTATION. .34 4.6 E-COMMERCE CONTRIBUTION TO BUSINESS PERFOMANCE ...........................35 4.6.1 Level of Integration.....................................................................................................35 4.6.2 Contribution to Business Profitability........................................................................36 4.7 BARRIERS THAT HAVE HINDERED THE EFFECTIVE IMPLEMENTATION OF ECOMMERCE...........................................................................................................................37 4.8 THE RELATIONSHIP BETWEEN E-COMMERCE AND PROFITABILITY..............39 4.9 CONCLUSION..................................................................................................................41 5.0 CONCLUSIONS AND RECOMMENDATIONS............................................................41 5.1 INTRODUCTION.............................................................................................................41 5.2 CONCLUSIONS................................................................................................................42 5.3 RECOMMENDATIONS...................................................................................................43 5.4 RECOMMENDED FURTHER RESEARCH...................................................................45 REFERENCES........................................................................................................................45

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LIST OF TABLES
Table 3.1: Table 3.2: Table 3.3: Table 3.4 Table 4.1: Table 4.1: A comparison of Nomothetic and Ideographic Methodologies Judgemental Sampling Criteria Departmental Composition of Questionnaires Qualitative and Quantitative Data Analysis Questionnaire response rate The chi-squared test 55 58 59 66 69 81

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LIST OF FIGURES
Fig 2.1: Fig 2.2: Fig 2.3: Fig 2.4: Fig 2.5: Fig 2.6: Fig 2.7: Fig 4.1: Fig 4.2: Fig 4.3: Fig 4.4: Fig 4.5: Fig 4.6: Fig 4.7: Fig 4.8: Fig 4.9: Fig 4.10: Electronic Areas Model The E-commerce Framework of Seven Levels The Electronic Commerce Value Grid Three Generic Strategies Two types of fundamental resources underlying Competitive advantage Sustained Competitive Advantage Though the RBV Model The e-commerce value chain Composition of users of e-commerce as a tool for business Different functions for which e-commerce is used Types of e-commerce utilised E-commerce Technologies being used. E-commerce strategy Implementation Level integration of e-commerce in different components of the value chain Contribution of e-commerce to business profitability Barriers to E-commerce Summary of Barriers to E-commerce Comparison of Utilisation of e-commerce and the contribution of e-commerce to business profitability 80 76 77 78 79 70 71 72 73 75 41 47 40 21 22 23 35

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1.0 INTRODUCTION AND BACKGROUND 1.1 INTRODUCTION
In the emerging global economy, electronic commerce (e-commerce) has increasingly become a necessary component of business strategy and a strong catalyst for economic development (Andam, 2003). The integration of Information and Communication Technology (ICT) in business has enhanced business-business and business-customer relationships. Specifically, the use of ICT in business has enhanced productivity, encouraged greater customer participation, and enabled mass customization, besides reducing costs. These benefits from ICT are yet to be realized from e-commerce hence the need to study and understand the concept of e-commerce. Projections of commerce via the internet are remarkable. According to Forrester Research, online sales were expected to reach $300 billion in 2000 and $488 billion in 2002. Likewise, business-to-business commerce was projected to reach $327 billion by 2002 (Applegate, Lynda, McFarlan and James, 1996). E-commerce has evolved from a high-tech marvel to a corporate initiative. According to Jack (1996) ecommerce can no longer be ignored or thought of only as an ICT project. As such King and Clift (2000) argue that the ‘‘e’’ – will soon be dropped and that e-business will be business as it comes to be generally understood. Electronic commerce projects must now be intertwined with the firm's strategic plans. The next section reviews the background of The manufacturing sector and the Milling Food Industry in the light of selected marketing and strategic management tools.

1.1.1 BACKGROUND
Although e-commerce is not a new concept in Zimbabwe and the Hospitality sector for example has implemented e-commerce portals, however such progress has not been very evident in all business sectors. The food manufacturing sector in Zimbabwe has embraced Electronic Data Interchange during business to business

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transactions, however little has been implemented for business over the internet. Also the current e-commerce implementations have not fully exploited all ecommerce tools or integrated the technology to business processes. It is also apparent that only a small proportion of the Zimbabwean population has access to the internet, and a small fraction of those who use it, use it for ecommerce. There is a big inertia to move towards the new technology and many only use computers for e-mail, internet and typing. The general public views it as a luxury to own a computer. However, there is a shift in this view and more are now having personal internet access in homes thanks to the advent of mobile networks, 3g networks and similar developments. However, the limited access to internet has led to limited usage of e-commerce by businesses for interacting with clients.

1..1.2 RESEARCH JUSTIFICATION
In Zimbabwe, not much value has been realized by firms implementing e-commerce. However, an understanding of the impact of fully embracing e-commerce on business profitability will help companies to realize that it is costly not to utilise the technology. This research intends to bring out the immediate benefits, in terms of cost savings, efficiencies and enhanced profitability which are to be realized through successful implementation of e-commerce technologies. According to Hobart (2001) adopting e-commerce is no longer a competitive advantage, but a normal business process, without which an enterprise is unlikely to survive competition. Implementing an e-commerce strategy is neither straightforward nor cheap. For example, it comprises a complete rethink of traditional modes of behaviour, the need and importance to involve internal staff and external suppliers and customers right from the conceptual stage, need to re-evaluate a company's core competencies, and requires substantial investment in IT. As such, this study seeks to link e-commerce concepts together with competitive advantage concepts analysing how these concepts could be embraced to make the business more profitable.

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Since Zimbabwe is in a challenging economic situation, companies which will harness e-commerce for achieving competitive advantage will need to be strategic thinkers focusing on customers, markets, and competitive positioning, as well as on internal operations. The research seeks to help clarify e-commerce concepts. It also seeks to aid strategic thinking by providing valuable information on how e-commerce can be utilised strategically to create competitiveness. Such information brings new depth to Zimbabwean e-commerce by providing guidelines as to how the potentials and benefits of e-commerce can be fully harnessed by Zimbabwe’s milling industry. The research set to provide academia with information on the applicability of ecommerce in Zimbabwean food industries and provide a source of information for further research.

2.0 LITERATURE REVIEW 2.1 INTRODUCTION
According to Shah and Dawson (2004), implementing e-commerce technologies comprises a total rethink of traditional modes of behaviour, and the involvement of all stakeholders right from the conceptual stage, added to a re-evaluation of the company’s core competencies. As such, executives of e-commerce companies need to be strategic thinkers focusing on customers, markets and competitive positioning. Practically, the section will analyse how e-commerce has influenced business. It will explore how this new technology can be exploited to achieve sustainable competitive advantage in conjunction with some traditional strategy tools.

2.2 THE E-COMMERCE CONCEPT 2.2.1 THE DEFINITION OF E-COMMERCE
Many use the terms electronic commerce (e-commerce) and electronic business (ebusiness) interchangeably. For the purpose of our study, we seek to differentiate the two. Allen and Fjermestad (2000) suggest that e-business tends to be used as a

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more general term to describe the use of the internet or any type of electronic mechanism to conduct an organization’s business processes. This definition implies that e-business is a term used to describe utilizing Internet technologies to improve the productivity or profitability of a business. Andam (2003) describes e-commerce as on-line trading. In other words, e-commerce consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. Modern electronic commerce typically uses the Internet at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well. The wikipedia website considers ecommerce to be the sales aspect of e-business (www.wikipedia.org). Kalakota and Robinson (1999) argue that e-business is the function of deploying technology to maximize customer value while e-commerce is the function of buying and selling over digital media. Kenneth and Traver (2003) expand this definition arguing that e-commerce encompasses digitally enabled commercial transactions between and amongst organisations and individuals while e-business refers primarily to the digital enablement of transactions and processes within a firm, involving only the information systems under the control of the firm In summary, e-business is a super-set of e-commerce. This implies that incorporating e-commerce into a company's flow would transform the company into an e-business. E-Business thereby can be broadly defined to encompass all internal and external electronically based activities and processes. Bakos (1998) summarises e-commerce as part of e-business which focuses on the electronic commercial transactions between and amongst organisations and individuals. In this research we are interested in business-to-business (B2B) and business-to-customer (B2C) e-commerce.

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2.2.2 B2B AND B2C E-COMMERCE
Fruhling and Digman (2000) argue that B2B e-commerce is a way for business to create value by alignment with factors which include customers, suppliers, and employees, among other factors. Andam (2000) defines B2B e-commerce simply as e-commerce between companies. He further argues that this type of e-commerce deals with relationships between and among businesses. Types of business-to-business electronic commerce applications include: electronic data interchange, electronic funds transfer, electronic forms, integrated messaging, and shared databases. Business-to-business processes provide sharing of data and increased information access through corporate extranets. B2C e-commerce involves customers gathering information; purchasing physical goods or information goods which are goods of electronic material or digitized content, such as software, or e-books (Andam, 2000).

2.2.3 THE BENEFITS OF E-COMMERCE
E-commerce presents a number of opportunities for business organisations and individuals alike. Metzger (2004) suggests that e-commerce companies have a widened market base. The wide market base gives the companies an opportunity to grow at very low costs. Hoffman et al (2004) contend that there are distribution, marketing and operational benefits that can be realised from e-commerce. In other words e-commerce can bring about a reduction in distribution costs through the elimination of intermediaries. Since online transactions involve very little costs ecommerce can also bring about a reduction in transaction costs (Kiggundu, 2002). Internal and external processes can also be integrated to lower transaction costs. As worldwide companies are adopting more collaborative relationships with key suppliers in product development, key business processes now require crossfunctional information sharing on a wide range of issues (McIvor, Humpreys and McAleer, 2000). This means that firms can utilise e-commerce to expand distribution

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channels at lower costs. According to McIvor et al (2000), these low costs can be achieved through the reduction of clerical procedures and paper handling. Ecommerce can also accelerate ordering, delivery and payment for goods and services while reducing operating and inventory costs. Schaeffer (2003) argues further that e-commerce dramatically reduces the time for information search and transacting for buyers and sellers. The important point here is that e-commerce transcends geographic and time boundaries. Since time is saved, this has cost saving implications. However, geographic and legislative constraints continue to present significant barriers to the distribution of goods and services in practice. Even though such constraints exist, personalised product offerings combined with free market access provide the customer with a wider availability of hard-to-find products. Added to this wider selection of items, customers can test products online before a decision is made to purchase (Karavdic, 2002). Lumpkin, Drogee and Dess (2002) argue that even though the Internet makes possible new opportunities for strategic success, ignoring business fundamentals and basic financial requirements results in business losses. According to this line of argument many e-commerce companies have been unsuccessful at making a profit due to heavy spending on mass marketing, intensive price competition, lowered customers' search and switching costs. De Figueiredo (2000) stresses this argument, contending that increased customer power and lowered entry barriers due to the Internet can heavily lower a company’s profitability. Despite the above mentioned negatives of the internet, the author believes that the main reason for failure on e-commerce is due to lack of clearly defined e-commerce strategies targeted at building the business’ profitability. The reason for such a belief is that whilst many companies have failed in e-commerce, others have thrived under the same conditions. The argument is that certain strategies which the successful ones have perfected have made the successful companies more successful than the failing companies. As such, the following section seeks to analyse different e-

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commerce models in the light of their potential impact on e-commerce and competitive forces.

2.2.4 MODELS OF E-COMMERCE
Different models can be used to analyse and build e-commerce model strategies for business. No single model covers all the areas of interest and hence a selection of models has to be used when planning. The section below outlines some of the most prominent models and evaluates their strengths and weaknesses.

2.2.4.1 Electronic Areas Model

Fig 2.1. Electronic Areas Model (Choi et al., 1997:18). The Electronic Areas model shown in Fig. 2.1 presents the difference between ecommerce and traditional commerce. The representation portrays e-commerce as a three dimensional space, with traditional commerce in the front bottom left area and

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e-commerce in the back top right area. This model also identifies product, agent and process as three key dimensions distinguishing e-commerce from traditional commerce. The representation underlies the fact that e-commerce may be implemented to compliment an existing venture, or may be used to establish a totally new electronic venture (Haylock et al, 1999). Kao and Decou (2005) argue that the electronic areas model can be useful in determining the organisation’s focus in relationship to technology. However, even though this model helps focus the relationship of an organization with e-commerce applications, it does not assist in showing any clearly defined e-commerce strategies to pursue.

2.2.4.2 The Hierarchical Framework of E-commerce
Meta-Level Product and Structures Level 7 6 Services 5 4 Infrastructure 3 2 1 Function Electronic Marketplaces and Electronic Hierarchies Product and Systems Enabling Services Secure Messaging Hypermedia/ Multimedia Object Management Public and Private Communication Utilities Wide-Area Telecommunications Infrastructure

Fig 2.2. The E-commerce Framework of Seven Levels (Zwass, 1998) The hierarchical model outlined in fig. 2.2 above defines three meta-levels of ecommerce which are Product and Structures, Services and Infrastructure. Each level

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sits on top of the one below it and benefits from the strengths of the lower level (Zwass, 1998). Each level has sub levels which are shown as one to seven (fig. 2.2). Feng Li (2006) contends that the strength of the Hierarchical model is that it shows that in order to build a strong e-commerce strategy, a bottom up approach has to be taken. In other words, there needs to be a strong Wide Area infrastructure and strong ICT systems leading to the provision of excellent e-commerce products. Riggins (1998) argues that one difficulty with the hierarchy is that the sequence of layers may not be sufficiently flexible to accommodate the changing functions and activities of e-commerce. However, Zwass (1998) further argues that the hierarchical model focuses attention on important components to be considered within the ecommerce strategic planning context.

2.2.4.3 The Electronic Commerce Value Grid
Riggins (1998) developed the Electronic Commerce Value (EC) Grid (fig. 2.3) to aid managers in determining where Web-based electronic storefronts could improve profitability.

Fig 2.3. The Electronic Commerce Value Grid (Riggins, 1998) He argues that firms compete along five dimension of commerce. By using various modes of interaction, firms compete over both time and distance to provide some

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product or service to their customers through a chain of relationships (Riggins, 1998). He adds that since investments in information technology are typically justified using three different criteria – generating efficiency, effectiveness, and/or strategic benefits, the two perspectives mentioned above can be combined to create the Electronic Commerce Value Grid (fig. 2.3) which identifies fifteen areas where managers can use Web-based electronic storefronts to add value to their customers. The strength of the model is that it provides a way for improving efficiency and effectiveness for the decision makers by making the right information available on demand (David et. al, 2000). These decision makers could be consumers considering a purchasing decision or a manager seeking information to formulate a marketing strategy. The model also offers strategic choices to the implementer and allows firms to gain an advantage over competitors by developing new customer loyalty. The result is temporal first mover competitive advantage. However, Riggins (1998) argues that long term advantage can only be obtained by constantly updating the content and functionality of the Web site and by redesigning business processes to take advantage of the new technology. While the E-commerce Value Grid is useful in identifying opportunities, it is specific to Web-based sales applications and is difficult to use in other e-commerce strategic developments (Elliot et al, 2000). It also does not consider financial and legal business interests.

Applying the EC Value Grid
Riggins (1998: 12) suggests that to use the grid, managers should first determine which of the five dimensions of commerce to target for impact using the online storefront. He also poses the following questions: Should the Web site be used to add value to the user by diminishing the time it takes to deliver information, products, or services? Are there distance barriers which need to be overcome in order to better serve customers? Is

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the objective to alter the relationships in the industry, possibly by intermediation or disintermediation? Can the organization improve the nature of the interaction between industry parties? Or is the goal to use the technology to institute entirely new products and services which were not feasible before the introduction of the Web? The above are some of the questions detailing the issues the EC Value Grid tries to identify. Riggins (1998:34) further argues that managers must examine the type of value to be generated for the user. He also stated that the following questions need to be investigated (Riggins, 1998:34): Is there a need to improve the efficiency of performing various tasks, improve the user's effectiveness in delivering timely information to decision makers, or use the technology to strengthen a long term relationship with the user? Riggins (1998:35) contends that answering the above questions provides the EC Value Grid with information to develop a Web-based application that will provide new value for the user. The extent to which the Web site incorporates several cells in the grid becomes a measure of the strategic sophistication or EC coverage of the site. The goal of the grid is to move from a simple online storefront, where the impact is on time and distance generating efficiency and effectiveness benefits, to vast electronic business sites which change the relationships in the industry. Riggins (1998:35) argues that the mode of interaction developed with customers and trading partners utilising the EC Value Grid produces creative new products and services to generate strategic value.

2.2.4.4 Discussion of the various e-commerce models
As already noted in sections 2.2.4.1 to 2.2.4.3 no one model covers all the required areas. The electronic model can be used to focus on the relationship of a company

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with e-commerce applications. The hierarchical model is then used to analyse the infrastructure, services and product meta-levels of the company and aid in a bottom up strategic e-commerce strategy. The electronic value grid will then be used to factor in measures that will improve efficiency and effectiveness for customers. In the application of these models it is also essential to consider financial and legal concerns. These models have been designed to create competitive advantage, however for its sustainability; they have got to be applied in support of the normal strategic processes. Since they do not conflict, the above mentioned models can be used concurrently to build competence. As such, we look at e-commerce in the light of business strategy.

2.2.5 HOW THE INTERNET AFFECTS E-COMMERCE
Zwass (1998) argue that popularity of the Internet for e-commerce is unquestionable. Schaeffer (1999) contends that this popularity emanated from the fact that the internet offers a channel where buyers and sellers are able to complete transactions cheaply, instantaneously and anonymously whilst overcoming geographic and time barriers. He contends that it provides a channel to remove multiple layers of middlemen by bringing companies and their customers and suppliers together directly and cheaply (Shaeffer, 1999). As such, e-commerce is thereby expected to widen markets and lower transaction costs.

2.2.5.1 Positive Effects to a Business
Shingh (2003) contends that the Internet enables a company to expand its market reach. Jensen (1999) agrees and contends that a little company is able to utilize the internet to reach markets far beyond its traditional vicinity while also gaining access to markets beyond its current customer base. Given this advantage to small companies, Jensen (1999) further argues that small companies can also have greater visibility against large companies and hence a chance to level the playing field to some extent.

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Schaeffer (2003) adds to the debate that on the Internet each company is reduced to the common size of the customer’s browser window. While creating the original web presence may not be inexpensive, the cost of subsequent maintenance is minimal (Shaeffer, 2003). Jensen (1999) argues that the Internet provides cost advantages for businesses in being able to update information, post features, and simply maintain a site that is perennially current at a minimal cost and time lag. These features stated by Jensen (1999) combine to generate a greater presence within the present target market while gaining a greater component of their mind share. Shaeffer (2003) further argues that one of the greatest benefits of doing business online rests in its ability to promote relationship building with customers and partners. Straub (2001) contends that the Internet is unmatched in its ability to increase responsiveness. Examples of this responsiveness are clearly visible in companies such as Dell, UPS, and FedEx that now allow both partners and consumers to check various facets of their transactions directly by logging onto their Web sites (Straub, 2001). This interconnectedness comes at a lower cost and on demand thus, providing a more efficient method to respond to customer needs/wants. Straub (2001) agrees with Schaeffer (2003) that the Internet provides the benefits of shared information that can be enjoyed by organizations of all sizes big or small at a fraction of the cost. Straub (2001) argues that access to real-time data enhances efficiency, which improves productivity, and profitability. Schaeffer (2003) further contends that the nature and content of information that can be shared has broadened in scope. He states that the multi-media nature and real time capabilities of the Internet are fostering an environment that is conducive for relationship building. The blossoming and adoption of the Internet has seen businesses realize enormous cost savings by moving a myriad of services online. The range of business areas

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positively impacted are vast, from customer service centres, online tracking of packages, to online brokerages, the list is endless. Berryman, Harrington, LaytonRodin and Vincent Rerolle (1998) contend that the ability to digitize offerings and provide products/services on demand has lead business to realize two allied goals of enhanced service at a reduced cost of product, support, and service. The above information strongly suggests that the Internet can also be used to gain competitive advantage through linkages with suppliers which will cut costs.

2.2.5.2 Negative Effects to a Business
Given the above potentials of e-commerce, there are a number of challenges as ecommerce takes root as a business tool. Schaeffer (2003) argues that e-commerce is limited to the transmission of information that can be interpreted by two of the five senses alone namely sight and sound. As such the internet is unable to communicate taste, smell, and feel. Wigand et al (2004) argue that there are possibilities of reduced profits as competition intensifies. In agreement, Straub (2001) states that e-commerce tends to reduce entry barriers as there are very little and sometimes no setup costs required to setup an internet based business. Straub (2001) further states that companies involved in e-commerce lose their bargaining power and this tends to reduce the companies’ ability to push their products, thus driving down profits. The UNCTAD Report (2002) states that one of the major challenges facing companies doing business in an e-commerce environment is the issue of security. The problem is generally about how to address the issue of security while preserving the benefits and ease of use of the internet and its open nature. According to the UNCTAD Report (2002), possibilities of fraud abound on the internet for both the buyers and the sellers. Another challenge that may be faced by internet based companies is the issue of costs, especially in relation to network access. Network

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access providers may monopolise access and charge premium charges for network access (UNCTAD Report, 2002). Gapu (2004) contends that a major challenge to e-commerce is customer loyalty: one of the manifestations of using the technology of the internet has been the ease with which consumers can navigate the internet in order to satisfy their needs and wants. Besides, the internet reduces switching costs to the point where consumers do not have an inherent investment in the current relationship. In instances where businesses do not create a personal shopping experience, this problem is further amplified.

2.2.5.3 E-Commerce effects on Markets
The Internet has seen the emergence of electronic markets. Whitey (2000) defines an Electronic marketplace as an inter-organisational information system that provides facilities for buyers and sellers to exchange information about price and offerings. Berkowitz (2000) argues that this market space is information and communication-based electronic exchange environment occupied by sophisticated computer and telecommunication technologies and digitized offerings. The impact of this digitization is evident in the following changes as stated by Berkowitz (2000:5): • • • The content of transaction is different – information about a product often replaces the product itself. The context of transaction is different – an electronic screen replaces the face-to-face transaction The enabling infrastructure of transactions is different – computers and communications infrastructure may replace typical physical resources especially if the offering lends itself to a digitized format. Shingh (2003) states that the Internet provides a platform for e-commerce by providing a wide market place for business which covers the whole world. Goods and services can be accessed from anywhere with virtually no costs. Accordingly

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Schaeffer (2003) suggests that delivery of purchased items can be via postal services or downloads, if downloadable, and payment can be done by credit cards or mailing payments. As the internet provides for transactions with high speed information flow there is much hope of lowered costs and an ever expanding marketplace (Berkowitz, 2000). E-market Commodities According to Professors Rajiv Lal and Miklos Sarvay of Stanford University, in Schaeffer (2003), there are two types of goods that can be bought on the internet. One type is goods that a person can buy without seeing. Experience goods are the second type. One needs to see this type of goods before buying. Schaeffer (2003) gives examples of the first type of goods as computers and compact discs and the second type as goods like clothes and jewellery. Schaeffer (2003:15) states that: Purchasers really like to touch and feel experience goods and will only buy after some experience. Since brand identity and customer loyalty is important, experience goods are not vulnerable to severe price competition. As such physical stores can be used to build relationships with customers and then e-commerce be used for creating repeat orders at low cost. Therefore in this view, e-commerce can be viewed as a complimentary channel to integrate along existing distribution channels, particularly for experience goods.

2.2.6 INHIBITORS OF E-COMMERCE
In developing countries like Zimbabwe, a major impediment to take-off of ecommerce is inadequate ICT and Telecoms infrastructure as well as shortcomings in physical infrastructure, logistics and trade facilitation (Gapu, 2004). Other limitations include foreign currency controls, which limit the free exchange of value over the internet. A research in Vermont, USA (Vermont Report, 1999) revealed that there are three main areas of barriers to e-commerce:  Ignorance – when people know little about the internet, they tend to hate the technology and thus use of the facility will be limited. However, this is not the

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situation in Zimbabwe because rapid changes in mobile technologies and the quick buy in by people in Zimbabwe have proved that Zimbabweans are quick to adapt to changes and embrace them.  Cost – costs prevent most businesses from establishing e-commerce services. Cost comes in the form of cost to buy hardware and software for use in e-commerce. It also comes in the form of cost of building the system as experts are expensive to pay. Significant costs also come from the cost of leasing bandwidth from telecommunication service providers. In Zimbabwe, cost is one big inhibitor to technological advancement.  Time – companies find it difficult to invest in time to develop systems that can be used on the internet. Straub (2001) contend that other inhibitors of e-commerce come from fears about perceived lack of online privacy, which arise from the internet’s ability to record every aspect of the user’s behaviour. For example the Government recently announced its intentions to monitor the Internet and intercept e-mails for intelligence reasons. Every transaction on the internet involves some disclosure of one’s personal information (Straub, 2001). This tends to scare away senior managers from conducting business on the internet. Van Hooft and Stegwee (2001) contend that there is a general lack of secure electronic payments system. They base their argument on the fact that current generations of e-payment systems involve sending information over the internet. This has the attendant risk that such information may be intercepted by the wrong people and hence may be misused.

2.2.7 DRIVING FORCES OF E-COMMERCE
Improvements in technology continue to be a major driving force of e-commerce (Vermont Research, 1999). There have been fast changes in technology and in turn the associated costs of technology continue to fall. This in turn makes it very

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possible for innovative new ways of doing business to emerge. Changes in technology have also been making it possible for mobile technology to allow ecommerce. An example is the emerging of WAP technology, which now makes it possible to browse on the phone. As the technology improves, it will soon be possible to have even larger bandwidth on mobile phones, which can make it even easier to do commerce while on the move. Changes in life styles of people have also contributed to growing use of ecommerce. Falling prices of computers and associated hardware and software have also facilitated more people to own computers. More people now own and use computers for their day to day business making it easier for businesses to bring shop fronts right in the homes of people. Gapu (2004) states that statistics show that more and more people now own computers. For Zimbabwe the number of people with computers rose from 33,000 in 1995 to 600,000 in 2000 (Gapu, 2004). The technical capabilities of telecommunication networks have also been improving thus making e-commerce more accessible. The bandwidth obtainable on existing copper wire has been enhanced by such new technologies as DSL and ISDN. Since these technologies work over existing infrastructure, it is easier to provide internet access to more people with little investments in new infrastructure.

2.3 THE CONCEPT OF SUSTAINABLE COMPETITIVE ADVANTAGE 2.3.1THE DEFINITION OF SUSTAINABLE COMPETITIVE ADVANTAGE
Grant (1995) argues that competitive advantage is the ability of a firm to outperform rivals on the primary goal of profitability. Barney (1991:102) takes the definition further suggesting that a firm is said to have sustainable competitive advantage when it is implementing a value creating strategy not simultaneously being

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implemented by any current or potential competitors and when these other firms are unable to duplicate the benefits of this strategy. Barney (1991) contends that resources that create this advantage have value, rareness, inimitability and non substitutability. Mata et al (1995) agree with Barney (1991) stating that for a resource to give sustainable competitive advantage, it must be valuable, it must not be possessed by many competitors in the industry and it must not be easily available for competitors to acquire. In addition Bharadwaj (1993: 84) in Maisiri (2006) also emphasizes that competitive advantage is only sustainable if the advantage resists erosion by competitor behaviour. Byrd and Turner (2001) in Basutu (2005), argue that IT is a highly transferable resource, a necessary but not a sufficient condition for sustainable competitive advantage. Powel and Dent (1997) differ and maintain the position that IT is not a highly transferable resource, and therefore, it is both a necessary and sufficient source of competitive advantage. Given Zimbabwe’s harsh economic environment and the fact that e-commerce is a resource easy to imitate, this paper agrees with Byrd and Turner. In other words the position is that e-commerce competitive advantage are quickly copied and firms have got to innovate quickly in order to keep on having these advantages. Mata et al (1995) reinforce this view stating that the use of proprietary technology as a source of sustainable competitive advantage has proved to be difficult because IT applications are difficult to patent. Workforce mobility has been found to reduce the extent to which the proprietary technology is kept secret from competitors. Competitors can easily get access to technical knowledge by hiring the workforce involved in the development of the proprietary technology.

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2.3.4 E-COMMERCE AND COMPETITIVE ADVANTAGE
2.3.4.1 Introduction
Porter (1985) argues that achieving a sustainable competitive advantage can be achieved by operating at a lower cost, by commanding a premium price, or by doing both. Accordingly, cost and price advantages can be achieved in two ways, which are operational effectiveness and strategic positioning. Operational effectiveness is doing the same things your competitors do but doing them better (Porter, 2001). Operational effectiveness advantages can take myriad forms, including better technologies, superior inputs, better-trained people, or a more effective management structure. Strategic positioning is doing things differently from competitors, in a way that delivers a unique type of value to customers (Porter, 2001). This can mean offering a different set of features, a different array of services, or different logistical arrangements. E-commerce affects operational effectiveness and strategic positioning in very different ways. It makes it harder for companies to sustain operational advantages, but it opens up new opportunities for achieving or strengthening a distinctive strategic positioning.

2.3.4.2 E-commerce’s influence on Operational Effectiveness
Porter (2001) argues that Internet e-commerce is arguably the most powerful tool available today for enhancing operational effectiveness. Grant (1995) agrees that by easing and speeding the exchange of real-time information, it enables improvements throughout the entire value chain, across almost every company and industry. Porter (2001) further contends that because the internet is an open platform with common standards, companies can often tap into its benefits with much less investment than was required to capitalize on past generations of information technology.

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Hobart (2001) argues that companies only gain advantages if they are able to achieve and sustain higher levels of operational effectiveness than competitors. Hoffman (2000) disputes this argument, stating that it is exceedingly difficult to sustain an advantage even in the best of circumstances. The point is that once a company establishes a new best practice, its rivals tend to copy it quickly. Horbart (2001) observes that the best practice competition eventually leads to competitive convergence, with many companies doing the same things in the same ways. Along the same line of reasoning, customers end up making decisions based on price, undermining industry profitability. Jack (1996) states that the nature of Internet e-commerce applications makes it more difficult to sustain operational advantages than ever. Jack (1996:45) further reasons as follows: In previous generations of information technology, application development was often complex, arduous, time consuming, and hugely expensive. These traits made it harder to gain an IT advantage, but they also made it difficult for competitors to imitate information systems. The openness of the Internet combined with the advances in software architecture, development tools, and modularity, makes it much easier for companies to design and implement applications. As the fixed costs of developing systems decline, the barriers to imitation fall as well. Hoffman (2000) contends that today, nearly every company is developing similar types of e-commerce applications, often drawings on generic packages offered by third-party developers. The resulting improvements in operational effectiveness will be broadly shared, as companies converge on the same applications with the same benefits (Sinha, 2000). Very rarely will individual companies be able to gain durable advantages from the deployment of "best-of-breed" applications (Jack, 1996).

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2.3.4.3 E-commerce’s influence on Strategic Positioning
Due to the advent of internet e-commerce, the above sections have shown that it has become harder to sustain operational advantages and strategic positioning becomes all the more important. Porter (1985) argues that if a company cannot be more operationally effective than its rivals, the only way to generate higher levels of economic value is to gain a cost advantage or price premium by competing in a distinctive way. Thompson and Strickland (1990) agree that without a distinctive strategic direction, speed and flexibility lead nowhere. Either no unique competitive advantage is created, or improvements are generic and cannot be sustained. Having a successful e-commerce strategy now requires more discipline. Porter (2001) argues that e-commerce strategy requires a strong focus on profitability rather than just growth, an ability to define a unique value proposition, and a willingness to make tough trade-offs in choosing what not to do. A company must stay the course, even during times of upheaval, while constantly improving and extending its distinctive positioning (Porter and Millar, 1985). E-commerce strategy now goes far beyond the pursuit of best practices of strategizing. Shingh (2003) proposes that e-commerce strategies have to involve the configuration of a tailored value chain to be defensible. In other words, when a company's activities fit together as a self-reinforcing system, any competitor wishing to imitate a strategy must replicate the whole system rather than copy just one or two discrete product features or ways of performing particular activities.

2.3.4.4 Achieving competitive advantage through e-commerce strategies
How Overall Cost Leadership can be achieved by E-commerce Lumpkin et al (2002) contend that business fundamentals need to be adhered to for businesses to successfully implement e-commerce and achieve advantages. According to Lumpkin et al (2002:6): The service and capability offered by businesses have to be made uninimitable. For cost leadership advantages companies have to continue

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focusing on all cost centres, decrease expenses and maintain cost advantages as well as reduce inventories using e-commerce real-time communications to make production schedules and delivery systems more efficient. How differentiation advantages can be achieved by E-commerce Firms can create capabilities so specialised for a given customer that the chance of customers turning to other solution providers is greatly lessened (Tapscott, 2000). There is still a great need to position products as unique and valuable to customers. Overpricing of products has to be avoided. How Focus advantages can be achieved by E-commerce Porter (2001) agrees with Lumpkin et al (2002) that focusers can capitalise on ecommerce to capture specialised market niches. This can be done using technological capabilities to satisfy the needs of particular markets and reduce the threat of new entrants by firmly establishing itself as the customer’s most valued provider. Focusers need to read the scope and interests of their target markets (Lumpkin et al, 2002). As such uniqueness and focus on markets need to be maintained. A focus firm’s niche should be big enough to be profitable, but small enough to lessen the attractiveness to potential new entrants. Summary According to Porter (2001), the creation of true economic value once is the final arbiter of business success. Economic value for a company is nothing more than the gap between price and cost, and it is reliably measured, only by sustained profitability (Porter, 2001). As such, sustainable competitive advantage creation involves making choices throughout the value chain that are interdependent (Porter, 2001). In other words, all company activities must be mutually reinforcing. This process actually makes a strategy harder to imitate since the whole system of competing is difficult to imitate.

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2.4 THE E-COMMERCE VALUE CHAIN FRAMEWORK
2.4.1 THE E-COMMERCE VALUE CHAIN Shingh (2003) argues that for electronic commerce, the value chain can be a convenient means of being able to organize the examination of the business processes within a business. Porter (2001) argues that the basic tool for understanding the influence of information technology on companies is the value chain. He defines the value chain as the set of activities through which a product or a service created and delivered to customers. Grant (1995) argues that when a company competes in any industry, it performs a number of discrete but interconnected value-creating activities, such as operating a sales force, fabricating a component, or delivering products, and these activities of suppliers, channels, and customers. Porter (2001) then in agreement states that the value chain is a framework for identifying all these activities and analyzing how they affect both a company's costs and the value delivered to buyers.

Support Activities

Firm Infrastructure Human Resources Management Technology Development Collaborative Engineering Elearning

Marketing and Sales

Inbound logistics

Margin Customer Relations
E4 E5

Operations

E1

E2

Outbound logistics

Procurement

E3

Primary Activities

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Service

Figure 2.7. The e-commerce value chain (Van Hooft and Stegwee, 2001) Key:
E1 – E-Procurement E2 – Fatory Floor Automation E3 – E-Fulfilment E4 - Web Site and Web Marketplace E5 – CRM and E-Service

Because every activity in the value chain involves the creation, processing, and communication of information, information technology has a pervasive influence on the value chain. The special advantage of Internet e-commerce is the ability to link one activity with others and make real-time data created in one activity widely available, both within the company and with outside suppliers, channels, and customers. Taking the value chain (Porter and Millar, 2001) and placing e-commerce into the framework gives an insight into the reach of e-commerce into the value activities. Figure 2.7 above shows how e-commerce reaches all activities of the organization. Linkages already exist between activities; some of these linkages have been integrated by using e-business technologies, ultimately providing a fully integrated ecommerce process. It is important to realise that these new applications have to be integrated with supporting and, if applicable, primary processes to prevent creating islands of automation. The physical processes might have to be rearranged to better align the original value chain to the new e-commerce oriented value chain. Integration of the physical processes and e-business applications is essential to achieve maximum results. Analysing the e-commerce value chain can help in lowering the costs and increasing the value of activities.

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Taking the Web marketplace as an example, one can see that, if a marketplace requires sound estimates for the delivery time of a product, e-fulfilment systems have to be in place and the factory floor automation has to be capable of providing this information. Supporting processes are not only the technical infrastructure, but also the databases holding all information and people capable of working with the systems.

2.4.2 EXTERNAL, CUSTOMER-SUPPLIER LIFE CYCLE
For the purpose of further analysing relationships between suppliers and customers, Kettinger and Hackbarth (1997) in Shingh (2003) introduced the Customer/Supplier Life Cycle (C-SLC) Theory. The purpose was to provide a way of isolating a company’s buying and selling activities to better understand the interrelationships between customers and suppliers’ business processes and their interactions in the company. The C-SLC framework is a particularly useful planning tool to help structure a review of existing business processes to determine the potential for turning these into e-processes (Kettinger and Hackbarth, 1997). Because every company is both a customer and supplier, the C-SLC can be used from both the supplier and customer perspectives: From a supplier’s perspective, it is important to effectively target the market and advertise for customers, evaluate their product and service requirements and respond to their requests, deliver in a timely manner, and support customers after a sale. Concurrently, customers are searching for product and service information with the intent of more clearly specifying their own requirements, evaluating and selecting a supplier, and ultimately ordering and receiving a product or service (Kettinger and Hackbarth, 1997). Evaluating the current customer life cycle with selected customers might give new insights of where initiatives can best be made to increase the value offered to the customer.

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2.4.3 INTERGRATING INTERNAL AND EXTERNAL PERSPECTIVES
Kettinger and Hackbarth (1997:67) outline that: It can occur that both internal and external processes become interconnected. For example, the automation of procurement (e-procurement) involves investigating the buying activities but also involves integration with internal processes and systems. So not only do the processes themselves but also the integration and automation through e-business become a topic of investigation. After the focus on parts of the C-SLC has been decided, the impact on current systems and processes has to be assessed. The e-commerce value chain (introduced in Figure 2.7) can help in this assessment. Taking the example of e-procurement, it can be seen that this system affects both the supporting (procurement) and primary (inbound logistics) processes; for the example of the Web site, most linkages exist with the marketing and sales activity. In both cases it is important that the appropriate supporting processes are in place. Kettinger and Hackbarth (1997) argue that if an organisation’s processes consist of multiple value chains, the steps described above can be repeated for each chain.

2.4.4 APPLYING THE E-COMMERCE VALUE GRID
After having identified areas where e-commerce could be used to support the business strategy, specific e-business applications have to be specified. A framework to identify opportunities from Web-based electronic commerce (EC) applications has been developed by Riggins (1991) see section 2.3.5.3. Value is generated in three different ways, by using EC applications to generate efficiency, effectiveness and/or strategic benefits. It can be seen from the above mentioned section that the dimensions of commerce and the dimensions of value creation apply to all areas of the e-commerce value chain.

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2.5 CONCLUSION
It has been shown that while it is easy to create competitive advantage utilizing ecommerce, it is a more daring task to build sustainable competitive advantage using the same technology. Although e-commerce is now a requirement for engaging in competitive business, it has been proven not to be enough in itself for sustainable competence. It has also been shown that e-commerce implementations are easy to imitate and lower entry barriers as a result lowering a company’s profitability. It has been explained how no single strategy is enough to guarantee sustainable competitive advantage in e-commerce. What comes out is that it is essential to combine e-commerce strategies with traditional strategies so as to maintain competitive advantage. Given Zimbabwe’s economic environment of a Manufacturing Industry that has a limited infrastructure, the recommended approach is to utilize the Hierarchical Framework of e-commerce to develop an enabling infrastructure, maintain the services being provided by the company whilst developing electronic marketplaces. This approach will enable a company to target a global market whilst maintaining its current clientele. The organisation can further employ the Electronic Value Grid to find means of better serving customers. The model will assist in developing improved efficiency and effectiveness of processes. The company needs to use the above mentioned tools together with other strategy planning tools. Porter’s five forces model and the three generic strategies can be used to understand competition better and employ the best chosen generic strategy to create competitive advantage. Finally, the RBV helps to analyse resources and protect against imitation, although this study has shown that this is a difficult task with e-commerce. As such, the modified Value Chain Model, which is the EC- Value chain, is used hand in hand with the C-SLC in applying e-commerce to the Value chain in the creation of value and a close alignment of the e-commerce strategy with the relationship between suppliers and customers. This analysis gives insight of where initiatives can be best

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made to increase value offered to customers. In conclusion, since competitors can imperfectly imitate the above mentioned value creation process, sustainable competitive advantage can be created.

3.0 RESEARCH METHOD AND PROCEDURE
The research methods employed were structured surveys, interviews and documental review. The chosen methods set to collect information from different employee levels in the manufacturing sector. The structured interview was targeted at senior management who are the main implementers of strategies, while surveys were conducted on middle level and line managers. As such, questionnaires were distributed at selected manufacturing sites. The questionnaires were designed to obtain information to answer various research questions designed to unravel ecommerce strategies for Zimbabwean industries.

4. RESEARCH FINDINGS
This section lays out research findings and discusses the results after the conduction of the research was done in the manufacturing sector. A total of 50 questionnaires were distributed to Directors, Management, Supervisors and non management staff in the manufacturing sector. The research response rate is as depicted below: Table 4.1. Questionnaire response rate Target Groups Directors Management Line Managers Non Managers Total & Senior No. of Questionnaires 6 25 19 50 No. of Return Questionnaires 4 21 17 42 Response Rate (%) 83.3% 88% 89.5% 84%

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The response rate was an average of 42 out of 50, which is 84%. More details on the response rates can be analysed from table 4.1. The six senior managers were also interviewed and company strategy documents were also used to verify interview details.

4.3 COMPOSITION OF E-COMMERCE USAGE ACROSS MUNUFACTURING COMPANIES IN ZIMBABWE
Of the respondents who responded, 92% understand e-commerce and 87% acknowledge that in one way or the other, companies is utilising e-commerce. Of all the respondents, 78.6% understand e-commerce with an understanding above average.

Key:
-E-commerce utilised by IS only -Everyone uses IS -Used by only a selected users -It is a key tool for management -Other Reasons

Fig 4.1 Composition of users of e-commerce as a tool for business Fig 4.1 shows that e-commerce is used by selected users. The figure shows that 69% of questionnaire respondents responded that e-commerce tools are only used by a few selected users and 19% responded that it is a key tool for management. It is also evident from the interview findings that there is no convincing evidence that the management are utilising e-commerce as a tool. This also explains why manufacturing companies are finding it difficult to develop its relationships with customers.

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Along these lines Gapu (2004) argues that relationships can be enhanced via ecommerce. Schaeffer (2003) also argues that e-commerce via the internet enables a company to expand its market reach. Expanding regionally is one of the key objectives in the next 10 years (The manufacturing sector Strategy Document, 2007 – 2010). The findings show that in contrast to Gapu (2004) and Schaeffer (2004), the manufacturing sector has failed to provide the infrastructure that would allow it to expand its market base through the internet and e-commerce.

4.4 E-COMMERCE UTILISATION

Fig 4.2 Different functions for which e-commerce is used The figure 4.2 above illustrates the degree to which different functions of ecommerce have been exploited at the manufacturing sector. It shows that ecommerce is mainly used by the companies for communication. However, the interview has shown that this communication is not mainly business communication but communication with friends and relatives. According to the findings, 80% of communication is non-business communication. Berkowitz (2000) argues that communication used for non-business functions is not part of e-commerce. In other

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words, companies is lowly utilising e-commerce in all areas, otherwise its customer relationships should have improved. Whitey (2000) agrees with Berkowitz (2000) that e-commerce can be used to define electronic market places thereby, building a large marketplace for organisations. This is contrary to fig 4.2 which shows that companies has not been able to expand its market reach via e-commerce. Companies have also not been able to reduce any cost of sales or improve transaction costs by e-commerce.

Fig 4.3 Types of e-commerce utilised However, fig 4.3 shows that companies has been able to utilise all types of ecommerce, Business to Business (B2B), Business to Supplier (B2S), Business to Customer (B2C) and internal e-commerce. B2C e-commerce has been shown to be the main type of e-commerce being utilised by the manufacturing sector. This level of utilisation is followed by Business to Business e-commerce and all the other types which are at the same level of utilisation. The high level of B2C e-commerce shows the high degree of potential that the manufacturing sector has to reach markets via e-commerce.

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Interview findings have shown that management believes companies can expand by utilising B2C e-commerce. Company strategy documents show the management’s intentions to enhance the ICT function in companies. However, no solid strategy and plan has been put in place to develop B2C e-commerce as an expansion move. Hoffman et al (2004) argue that B2C e-commerce can be used to build operational advantages in distribution marketing. In contrast, the above findings show that the manufacturing sector has not benefited from these potential advantages.

Fig 4.4 E-commerce Technologies being used. Fig 4.4 further shows that companies have used the different e-commerce technologies which include intranets, extranets, e-mail and electronic fund transfers in different levels. The prominence of e-mail usage is evident in fig 4.4, in agreement with the finding in fig 4.2, which shows that e-commerce has been mainly used as a communication tool. Interview findings also reinforce this finding showing that companies have got a robust intranet and efficient e-mail. However, interviews have shown that there is little integration between the manufacturing sector and external companies that is the extranet is not established. Another interview finding is that Electronic Data Interchange (EDI) is only utilised together with electronic fund transfers (EFT) by the finance department’s finance director and manager.

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The above 50% questionnaire response could be explained by the fact that all employees are allowed access to one of the internet PC computer which is a pool computer located in the board room. However, Riggins (1998) contends that the internet should provide the interaction dimension of the electronic commerce value grid for efficient customer feedback and online interaction with the customer community. This is not so from the findings, since there is limited internet within companies. Since not all technologies are fully in use, the above findings contradict Riggins (1998) who argues that firms should compete along five dimensions of e-commerce which are time, distance, relationships, interaction and product (see section 2.2.4.3). In The manufacturing sector’ case, the relationship and interaction dimensions are severely compromised due to limited access to the internet by employees. The limited extranet network also lowers communication and linkage with business partners.

4.5 E-COMMERCE STRATEGY EXISTENCE AND LEVEL OF IMPLEMENTATION
The research study findings show that 73.8% of the respondents view E-commerce strategies as none existent or were implemented to a small extent.

Fig 4.5 E-commerce strategy Implementation

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Its findings shows that respondents had a bias towards the “I don’t know”, “No” and, “to a small extent” options of e-commerce strategy implementation. In a summary the questionnaire finding indicates that e-commerce strategies have been implemented to a limited extent. Interviews with Senior Management show that no ecommerce strategies have been developed or are in place. Shingh (2003) agrees with Porter (2001) that an e-commerce strategy is needed to establish a competitive edge (see section 2.4). As evident in the above findings, the manufacturing sector has not established any competitive edge through the implementation of ecommerce strategies.

4.6 E-COMMERCE CONTRIBUTION TO BUSINESS PERFOMANCE 4.6.1 Level of Integration
The electronic value chain framework developed by Van Hooft and Stegwee (2001) shows how e-commerce strategies can integrate e-commerce to reach all organisational activities (see section 2.4.1).

Fig 4.6 Level intergration of e-commerce in different componets of the value chain

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Research study findings illustrated by fig. 4.6 show that in all the value chain processes the majority of the respondents responded that e-commerce has been utilised minimally in all the value chain processes with the majority of respondents saying e-commerce has been utilised between 0-20 %. Interviews further elaborated the fact that different processes and departments in the value chain are not integrated. As a result, the interviews further show that departments are disjointed and individualistic. This is contrary to Kettinger and Hackbarth (1997) who introduced the C-SLC (See section 2.4.2). They argue that by analysing relationships between suppliers and customers, businesses can be structured to increase value offered to the customer by integrating all processes internally and with the external. As such companies are product oriented instead of being market driven, to quote one of the senior managers.

4.6.2 Contribution to Business Profitability

Fig 4.7 Contribution of e-commerce to business profitability A detailed analysis of fig 4.7, using a scale of 0–100% contribution to business performance, shows that 60 percent of the respondents responded that e-commerce contributed 60% towards business profitability, whilst 71.4% responded that e-

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commerce contributed about 60 – 80% profitability as a combined range. Further, research study interview findings show that all management representatives interviewed responded that e-commerce has contributed to the profitability of the companies. Survey Findings show that e-commerce is not fully integrated to the value chain. Although interview findings are in agreement with the survey findings, they show that e-commerce has a great potential for yielding business profitability if integrated with the value chain. Riggins (1991) supports these findings in his arguments that ecommerce can be used to generate efficiency, effectiveness and strategic benefit (see section 2.2.4).

4.7 BARRIERS THAT HAVE HINDERED THE EFFECTIVE IMPLEMENTATION OF E-COMMERCE
D ifficu of lty im lem tation p en 9% Resistan to ch g ce an e 9 % No cu stom er con ctiv ne ity 1% 0 No Und erstan ding to ecom erce Benefits m 1% 4 Lack of Man em t ag en Com itm t m en 1 4%

Lack of Fin cial an Resou rces 1% 0

High cost of Ecom erce m Im plem tation en 1% 2

Secu Issu rity es 1 1%

Lack of Con en in fid ce E-com e m rce 11 %

Fig 4.8 Barriers to E-commerce The ratio of 60.3%:39.7% can be approximated to a ratio of 60:40. In this case management ignorance and attitude contributing to more that 60% of the barriers to

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e-commerce progress. This ratio can be interpreted to mean that human factors which constitute about 40% of the factors considered are responsible for 60% of the barriers to e-commerce. This analysis closely follows the Pareto 80:20 rule, which states that 80 percent of the results are due to 20% of the factors.

Fig 4.9 Summary of Barriers to E-commerce Fig 4.9 above summarises Research interview findings with middle and low level management. These findings attribute most barriers as due to lack of senior management commitment and lack of understanding to benefits of e-commerce. The Vermont Report (1999) also echoes these findings, stating that e-commerce is inhibited by fears of online privacy by management.

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4.8 THE RELATIONSHIP BETWEEN E-COMMERCE AND PROFITABILITY

Fig 4.10: Comparison of Utilisation of e-commerce and the contribution of ecommerce to business profitability Survey results show that the majority of responses were on the middle response. On a scale of 100%, 21 out of 35 respondents responded that the percentage of contribution of e-commerce to business profitability was 60%. 29 out of 42 responded that the percentage utilisation of e-commerce at The manufacturing sector was 60%. These findings are summarised by fig 4.10 above. Fig 4.10 shows a comparison between research study responses on the contribution of e-commerce to business to business profitability and the utilisation of ecommerce. The findings show similar trends for different response options. As such, the researcher investigated the relationship between the two variables. Ghauri and Gronhaug (2002) argue that the chi-squared test can be used to test the relationship between two variables.

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Hypothesis Test for the Relationship between e-commerce utilisations and its contribution to profitability The researcher assumed that the null hypothesis was that the proportions of the research responses on the contribution of e-commerce to business profitability were the same as that of the utilisation of e-commerce. The researcher tested the relationship on a 95% significance level. The critical value was 0.05. Ho: 80% respectively. H1: The ratio of responses for 20%, 40%, 60% and 80% levels are not 5.7%:22.9%:60%:11.4% The degree of freedom (d.f.) = 3. For 3 d.f. and p = 0.05, the critical chi-square value is 7.815. Table 4.1: The chi-squared test
Actual utilisation responses 2 3 29 8 42 Expected Proportion out of 100 5.7 22.9 60.0 11.4 100.0 Expected responses 2.4 9.6 25.2 4.8 42 Actual – Expected (A-E) -0.4 -6.6 3.8 3.2 Sqr (A-E) 0.16 43.56 14.44 10.24 sqr(A-E)/ E 0.1 4.5 0.6 2.1 7.3

5.7%:22.9%:60%:11.4% for the responses of 20%, 40%, 60% and

Chi-squared value =

From table 4.1, Chi-squared = 7.3, which is less than the critical value of 7.815. The null hypothesis was therefore accepted, and the conclusion was that at 95% level of significance, e-commerce utilisation is related to its contribution to profitability.

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4.9 CONCLUSION
The findings have shown that 60.9% of the respondents responded that e-commerce is only used by selected users. In all the business processes, research findings show that e-commerce has been utilised below 40%. However, e-commerce has been equally used for B2B, B2C and Internal e-commerce. E-commerce has not been able to utilise extranets or the internet since these infrastructures have been implemented minimally. The research findings have also revealed that e-commerce has not been utilised to interlink and integrate business processes in the value chain. The main barrier to e-commerce has been shown to be human factors which included lack of management commitment to the implementation of e-commerce. The following section presents the research conclusions and recommendations to management.

5.0 CONCLUSIONS AND RECOMMENDATIONS 5.1 INTRODUCTION
This research set out to investigate the degree to which the manufacturing sector has embraced e-commerce. In identifying this utilisation of e-commerce, the research was carried out through interviews and questionnaire surveys to find out the following: 1. The degree of awareness in businesses of the existence of e-commerce. 2. The degree to which businesses have utilised e-commerce technologies. 3. The major challenges in implementing e-commerce to ensure competitive advantage. 4. The different e-commerce strategies that can be implemented by businesses for competitive advantage. From the research findings and their analysis, conclusions can be made as to the level of implementation of e-commerce by businesses in Zimbabwe. This section

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purposes to carry out that particular function and present recommendations for possible action by Zimbabwean businesses.

5.2 CONCLUSIONS
1. Even though all managers and most employees understand e-commerce with an understanding above average, the research has established that ecommerce tools are only being utilised by a few selected users. The research also established that e-commerce is not considered as a key business tool by management. 2. Internet, which is supposed to be a key tool to enhance e-marketing, has been shown to be minimally utilised. As a result, businesses have not been able to establish e-marketplaces. In return, no sales have been improved via e-commerce implementations. 3. Despite the fact that Zimbabwean companies has been able to utilise Business to Business, Business to Customer and Business to Supplier ecommerce, they have failed to be more profitable from utilising e-commerce. This could be explained by the fact that Zimbabwean companies have no ecommerce strategies in existence to effectively drive the e-commerce thrust. 4. The research has established that e-mail is the main e-commerce technology under use. However it has also been established that companies have not been able to harness the potential of e-mail to enhance business communications and develop customer relationships. This is the case, since Zimbabwean companies have not been able to utilise other e-commerce tools which should contribute hand in hand with e-mail to quicken and make business processes more efficient. 5. The research has also established a strong relationship between the level of utilisation of e-commerce at manufacturing firms and its contribution to business profitability. Although it has been established that e-commerce has

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contributed to the profitability of companies, it can be concluded that the absence of an e-commerce strategy has strongly contributed to the failure by companies to establish competitive advantage via e-commerce. 6. The research has established that e-commerce has been mainly hindered by the lack of commitment to e-commerce and low appreciation of the benefits of e-commerce by management. Other big hindering factors have been shown to be high costs of implementing e-commerce and security fears by management.

In considering all the above conclusions it can be concluded that the e-commerce technologies among e-mail, the internet, extranets, intranets, EDI and EFT that have been fully utilised by Zimbabwean businesses are less than those that have not. In other words, Zimbabwean businesses have not fully embraced e-commerce.

5.3 RECOMMENDATIONS
The following recommendations are documented for Zimbabwean organisations in the light of the findings and conclusions of the research study: 5.3.1 The training of management on e-commerce The Information Systems (IS) department in conjunction with the HR department should develop a training program to educate senior management about ecommerce and its benefits. This training should cover how e-commerce strategies are developed and how they can be integrated to all business processes and the value chain. By offering this training, the lack of understanding and low appreciation will be minimised and the knowledge will be used to effectively implement ecommerce.

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5.3.2 The development of an e-commerce strategy Management with the aid of the IS department should develop an e-commerce strategy. This strategy should build on general corporate and IS strategies. It should direct how companies intend to build competitive advantage through the implementation of e-commerce strategies. The buy in of the board and top management should be sourced in order to make sure that the implementation of the e-commerce strategy will not be hindered due to lack of funding. Developing a robust e-commerce strategy will set Zimbabwean companies ahead of the regional competition. Since regional competitors are still reluctant to utilise this technology fully, Zimbabwean firms can reap from first mover advantages. 5.3.3 Development of the different types of e-commerce Organisations should fully develop Business to business and Business to customer e-commerce by the implementation of internet for linking with key suppliers and customers. To develop business to customer e-commerce, the marketing department will need to be fully computerised from the ordering process to customer servicing. The setting up of a fully functional website can also enhance customer services. The business will need to analyse supplier-customer processes so as to enhance customer services. Organisations will need to develop external links with key suppliers so as to enhance and secure the procurement process. 5.3.5 Integration of e-commerce with the Value Chain Organisations will need to fully computerise and expand access to computers by every key information requiring and processing department. The Value Chain needs to be fully integrated by the full implementation of e-commerce to every process in the value chain. This will enable companies to become market driven as the production department will be able to produce as per orders from marketing. All departments will be able to make informed decisions based on current up to date information due to online systems.

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5.4 RECOMMENDED FURTHER RESEARCH
This research could also be further carried out on the whole food milling industry to establish the potential benefits of e-commerce in the industry. In that research an investigation of how e-commerce strategies can be used to establish competitive advantage can be carried out. The research could also set to find out how ecommerce can actually be utilised by the Foods Industry in Zimbabwe to expand globally and through the SADC region.

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