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 International Journal of Electronic Business Management, Vol. 6, No. 2, pp. 57-69 (2008) 57

RESEARCH ON BUSINESS STRATEGY AND

PERFORMANCE EVALUATION IN COLLABORATIVE
DESIGN
Yi-Chen Lin*, Magnolia Yulan Hsing and Yi-Chuan Wang
Graduate Institute of Technology Management
National University of Tainan
Tainan (700), Taiwan

ABSTRACT
Owing to the fast changing environment and the competition pressure of globalization,
enterprises are turning away from the business mode of individual management toward the
cooperation method of the collaborative model. Enterprises using cooperation involving
information transparency can receive requests immediately, and more quickly respond to
customer needs. Collaborative design is highly iterative and interactive process, involving a
group of designers, engineers, consultants and the client. The research aims to understand
the business model, B to B interaction and performance evaluation for collaborative design.
The research selected three leading companies in golf, PC server and LCD industry to do
the case study. The results highlight how collaborative design can build up new business
model, make B to B more efficient and further improve business performance.

Keywords: Business Strategy, Performance Evaluation, Collaborative Design

major businesses outsource design, R&D,

1. INTRODUCTION
In today’s globally competitive market,
companies must collaborate and communicate with
customers, suppliers, and partners in a complicated
and temporary product supply chain, which provides
them with a number of challenges. Design is a
complex process usually requiring information and
knowledge from diverse sources to be worked on
simultaneously by a team of designers during the
product life cycle [27]. Up to 80% of all components
produced by original equipment manufacturers (OEM)
are outsourced to external suppliers [25]. During
collaborative design, it is most important to resolve
design specification conflicts early in the design
process and create design knowledge to share many
designers and users [2][25]. This can lower both the
product development lead-time and manufacturing
costs greatly [33].
To satisfy delivery requirements, companies
must rapidly become familiar with the processes and
systems of new partners, and collaborate flexibly.
Effective management of diversity within an evolving
supply chain can reduce product design cycles,
strengthen supplier and customer relationships, and
respond more quickly to market changes. Using these
market forces to form new business models and better
serve the customer can mean that companies perform
better than those that lack this flexibility.
In an era of knowledge-based economy, many
manufacturing and other tasks through virtual
integration, in order to satisfy the increasingly higher
standards requested by the customers and to cut down
costs to win more orders. These businesses, aside
from facing a huge amount of complex information,
need to communicate with their upstream and
downstream partners more frequently as well as more
closely, which can be achieved best by using
collaborative design. Manufacturers in Taiwan expect
to themselves to transform from the traditional OEM
situation to become more ODM-oriented businesses.
To realize the expectation, collaborative design can
be used to establish an interactive design chain,
capitalize on innovative technologies of collaborative
e-commerce, enhance R&D and design capabilities,
and move further from the traditional OEM operation.
When a business thinks about an applying
collaborative design mechanism, its main
consideration is what competitive advantages this
mechanism will bring about.
With the implementation of collaborative
design, businesses see innovative changes in their
operations and improvements in their performance,
which stimulate energetic communication between
the businesses and their partners. Products can be
launched to grab early opportunities in the market as
a result of shortened processes of product design,
R&D and manufacture achieved by collaborative
design. Business competitiveness is therefore

*
Corresponding author: yichen@mail.nutn.edu.tw
58 International Journal of Electronic Business Management, Vol. 6, No. 2 (2008)
strengthened. This research uses case study of three
leading companies in Asia which have implemented
collaborative design in case study to discuss actions
in the process and factors affecting the
decision-making. These three leading companies all
have their oversea customers which are the leading
companies worldwide. The issues left are how to
build up new business strategies of collaborative
design platform to further improve business
performance between case companies and their
customers. The purpose of this research can be
divided into the following three points.
1. Propose a structural analysis of how
collaborative design influences the business
operation.
2. Discuss how enterprises and their partners can
share experience via collaborative design and
how it changes business operations.
3. Develop a performance evaluation method for
the collaborative design mechanism to explore
how it can be effectively applied and serve as a
reference for other industries.
2. LITERATURE REVIEW
2.1 Collaborative Design
Electronic commerce is a traditional supply
chain structure in many industries which can lower
the costs of tightly integrating buyers and suppliers
[22]. Kogut [16] summarized three main motivations
driving collaborative commerce: firstly, high
transaction costs resulting from small-number
bargaining; secondly, strategic behavior aimed at
enhancing a firm’s competitive position or market
power; and thirdly, a quest for organizational
knowledge or learning when one or both partners
desire to acquire some critical knowledge from the
other. Therefore, collaborative commerce, as well as
optimizing the combined competencies of the
partners to reach their goals, should also provide
solutions to meet customer and stakeholder needs.
The mixing of the different organizational cultures
can cause conflict in the management of the project
during collaboration [6]. In these circumstances,
extended enterprise collaboration is a route for
individual companies, in association with other
companies, academia, and government, to increase
the success rate of transition to environmental fit
through collaboration with other companies [31]. The
NGM team identified the groupings of strategic
enablers for extended enterprise collaboration as
follows: collaborative relationships, business systems,
customer focus, core competencies, and legal and
financial relationships.
Much recent literatures indicate that the critical
role of a firm’s design structure in the successful new
products development. Henderson and Clark [13]
propose the model that includes Architectural
innovation, radical innovation, modular innovation
and incremental innovation to reconfigure the
existing product design issue. MacCormack, Rusnak
and Baldwin [21] use Design Structure Matrices
(DSM) to map dependencies between the elements of
a design and define metrics to compare the structures
of different designs. Supplier involvement in the
earlier stages of product development can lower lead
time and manufacturing costs of both the company
and its suppliers [10]. Furthermore, the so called
design-in or spec-in approach can produce innovative
design which interests high value-added customers.
Internet technology has introduced many
cost-effective solutions for designers to collaborate in
the virtual network during the product design stage
[28]. However, the trend of using the collaborative
design model to raise the value of a design chain is
therefore widely accepted [35]. Collaborative design
involves a highly iterative and interactive process
among a group of designers, engineers, consultants
and the client. It involves both identifying and
solving problems. Often it is not possible to define all
design requirements and design context at the start of
the design process. Some problems might be revealed
during the process. The designers frequently need to
review earlier decisions. Decision-making loops and
iterations are an established factor in design
development [1]. Hagedoorn et al. [12] proposes that
R&D partnerships seem particularly important to
understand some specifics of interfirm R&D
collaboration in this sort of high-tech industry.
The purpose of Collaborative design is so that a
multidisciplinary team can share information,
expertise, ideas, resources and responsibilities [32].
Communication is essential during this process.
Human communication involves one person
influencing the cognition of another through symbolic
means [29]. This paper integrates the above
mentioned ideas and finds that out the scholars in this
area attach the most importance to six areas in the
process of collaborative design. They are: shorten
product development time, reduce change of design,
cut down product development cost, share knowledge
of product design, participate in product development
at an earlier time, and strengthen design capabilities
of partner companies.
2.2 Business Strategy
A business strategy focuses on a certain
business field and identifies a proper approach to
establish an advantageous position to compete.
Another explanation of a business strategy is it
focuses on a certain business unit and studies how to
enhance its competitiveness, such as choosing a more
attractive segmented market. From the perspective of
business operations, there are different levels of
strategies. Generally, academia categorizes strategies
into Corporate Strategy, Business Strategy and
Y. Lin et al.: Research on Business Strategy and Performance Evaluation in Collaborative Design
Functional Area Strategy. The formulation of a
business strategy requires taking the business
objective, business capability, opportunities and
threats of the market into consideration. The objective
of this research is to discuss the relationships among
the business environment, business strategies and the
people. Porter [24] divided business strategies into
three kinds: differentiation strategy, low cost strategy
and focus strategy.
Hagedoorn [11] and Gemünden et al. [8]
discovered that businesses tend to cooperate with
their upstream and downstream partners during
product development. Sixotte and Langley [26]
suggested that horizontal communication and data
exchange across the departments could reduce
uncertainties in the development process and improve
development performance. Maamar and Shen [20]
think that as product design has become more
complicated, designers must capitalize on knowledge
to solve problems occurring in the design process.
Therefore, cooperation between the business and its
partners is the key to achieving the business
objective, while collaborative design can help the
design team share knowledge, discuss and coordinate.
Lu and Yang [19] indicate in their research that
industries nowadays are facing the fact that the life
cycle of a product is becoming shorter. So, a business
must contract the product development process and
accelerate the launch of the product. To reach this
goal, the R&D department and the marketing
department will have to work more closely to address
any unexpected problems. Joseph [14] proposes that
managers have to apply different decisions, such as
using highly precise R&D steps to create successful
projects and constantly observe as well as assess the
behavior and R&D capabilities of project members,
to achieve business objectives when developing
products. Liu et al. [18] analyzed the strategies and
performance evaluation methods of the high tech
industry in Taiwan through questionnaires. Their
research points out that strategies of product
development, such as those related to the direction of
new product development, the characteristics of the
market and technologies, have a profound influence
over the performance of the product after it is fully
developed. This research reviews the above
viewpoints and sums up that product development
strategies adopted by businesses mainly involve the
following six: shorten product development time,
reduce change of design, cut down product
development cost, share knowledge of product
design, participate in product development at an
earlier time, and strengthen design capabilities of
partner companies, which are used in the analysis and
comparison of the case study.
59
2.3 Business Performance
Kassem [15] considers performance to be the
extent of task fulfillment of the managers based on
their assigned responsibilities. For Szilagyi [30], the
implication of performance is the overall idea of the
final results of organizational operation and activities.
Venkatraman and Ramanujam [34] propose a
performance evaluation structure with three
dimensions: financial performance evaluation
indicator, business performance evaluation indicator
and organizational effectiveness.
Covin and Slevin [4] have separated financial
performance into two dimensions: growth and profit.
The meaning of business performance is extended to
be the emphasis on or opposition to behavior related
to business starting activities and is completely
dependent on the operation philosophy of
high-ranking management. Furthermore, they have
emphasized that the performance is really dependent
on the business model and vision of higher
operational management team [3; 4]. Murphy et al.
[23] use eight dimensions of business performance in
their research, and among all Efficiency, Growth and
Profit are the three most commonly used. To avoid
inference bias as a result of performance comparison
between different businesses, Murphy et al. [23]
suggest the adoption of appropriate Control Variables.
According to his research, firm's size, industry and
firm's age are the most frequently applied control
variables.
The focal point in product development is the
design and development of the product. Since
discovering and creating new technologies is not
easy, businesses usually work with different partners
to share development technologies [19]. Cooper and
Kleinschmidt [5] conducted interviews with
high-ranking management at IBM, 3M, Northern
Telecom, Emerson Electric, where managers agreed
that cooperation in product development with
partners can improve the communication in the team,
reduce development time and remake time, and
increase the rate of success of the new product. In the
research by Littler et al. [17], it was found out that if
a business collaborates with partners in product
development, the amount of design knowledge it
gains from each stage of the process is more than
what it receives if it works by itself. What's even
better, the business can collect much new knowledge
correctly via outside collaboration. Farrukh et al. [7]
think the faster a business assumes the leading
position in the market or technology, the more likely
it is that it can increase its market share. They
therefore support the idea that increased outside
collaboration can enhance technology complexity,
shorten the life cycle of the product and cut down
both cost and risks. Joseph [14] conducted research
on to what extent inside and outside control in an
organization, team reward and other factors influence
60 International Journal of Electronic Business Management, Vol. 6, No. 2 (2008)

the interaction between the business and its management and assist synchronization. This
customers. They analyzed 95 projects across various research will use these evaluation indicators as
industries and concluded that if a huge amount of performance evaluation indicators for product
interaction occurs between project members and the development.
customers, then the business will attach more
importance to the market and the financial conditions. 3. RESEARCH DESIGN
The evaluation indicators adopted by the research
include the sharing level of the market, customer
To conduct this analytical framework, the case
satisfaction, quality of product and project
study research methodology was chosen. The case
management. This paper extracts the main viewpoints
study is suitable for researchers to answer questions
from the above work and identifies that the
as ‘‘how’’ and ‘‘why’’ [37]. In particular, Yin [36]
performance evaluation indicators in a product
pointed out that multiple cases strengthen the results
development process include: increase productivity,
by replicating the pattern-matching, thus increasing
reduce design and development cost, cut down
confidence in the robustness of the theory. We
manufacture cost, information transparency, customer
considered that it is appropriate to use the case study
satisfaction, raise market share, reduce
methodology in order to describe the implementation
time-to-market, enhance design capabilities, improve
in the case company of its collaborative process.
accuracy of design and manufacture, effectiveness
and convenience of technologies, project

Table 1: Data about the interviews in Company A

Object of Number of
Position Places of Interview
Interview Interview
General Manager 9
Vice R&D Dept. Manager 8
y Meeting Room
Company A Design Development Dept. Manager 7
y Discussion Room
Information Dept. Manager 9
Project Manager 12
Vice General Manager 4
Consultant of
Director/Chief Manager 8 y Meeting Room
Information
Consultant 4 y Discussion Room
System
Program Designer 3
Consultant 9 y Meeting Room
Consultant of
y Discussion Room
Outsourcing Manager 4 y Seminar Room of Consultant

Table 2: Data about the interviews in Company B

Object of Number of
Position Places of Interview
Interview Interview
Vice General Manager 5 y Meeting Room of Case
Vice General Engineer 3 Company B
Company B
Analysis Engineer 1 y Meeting Room of Consultant
Project Manager 7 Company
Director/Chief Manager 7 y Meeting Room of Case
Consultant of
Company B
Process Technique Consultant 2
y Meeting Room of Consultant
Technology Engineer 3 Company
y Meeting Room of Case
Consultant of Consultant 5 Company B
Integrated y Meeting Room of Consultant
Information Manager 5 Company
y Seminar Room of Consultant

The case study reports on the activities at a
leading panel manufacturing company, a leading
computer case manufacturing company and a leading
golf equipment manufacturing company in Asia. Data
collection was performed by a series of personal
interviews conducted with various groups, including
managers and employees, within the organization. We
had many meetings with many higher executive
managers of the case companies. They included the
CEO, general manager and employees from the R&D
Y. Lin et al.: Research on Business Strategy and Performance Evaluation in Collaborative Design 61

department and the MIS department. That is actually
a two-year project of collaborative design for these
three companies. We also organized a focus group to
interview higher executive managers more effectively
and get the effective information or data which would
be helpful to our research (as shown in Table 1 to
Table 3).
Taking into consideration our lessons learned in
collaborative design research presented above, we
believe that researchers can enhance the
trustworthiness of their research. In this context, we
refer to the trustworthiness criteria of qualitative
research, introduced by Guba and Lincoln [9]:
Credibility, transferability, dependability, and
confirmability. With regard to these criteria, our
collaborative design research approach improves the
trustworthiness of the research results, for instance,
by proposing the inclusion of different stakeholders
and data sources based on the interview of two-year
project during data collection (credibility), the
integration of findings from the conducted literature
review (transferability), the use of all categories
emerging from the data (dependability), and the
comparison of the derived business model with
similar models in the collaborative design fields
(confirmability).

Table 3: Data about the interviews in Company C

Object of Number of
Position Places of Interview
Interview Interview
CEO 1 y Meeting Room of Case
Vice General Manager 3 Company B
Company C
Vice R&D Dept. Manager 2 y Meeting Room of Consultant
System Planning Specialist 3 Company
Leader of Electronic Section 1 y Meeting Room of Case
Consultant of
System Engineer 3 Company B
Information
y Meeting Room of Consultant
System Project Manager 3 Company
y Meeting Room of Case
Consultant of Company C
Consultant 4
Outsourcing y Meeting Room of Guild Unit
y Seminar Room of Consultant

3.1 Case Studies
3.1.1 Case company A
Taiwan is one of the world’s largest suppliers of
thin film transistor liquid crystal display (TFT–LCD)
panels, second only to Korea. In 1998, Taiwan began
its aggressive output in the TFT–LCD industry with
abundant capital, great vision, and a comprehensive
industry chain. As a result, Taiwan now plays an
important role in the global TFT–LCD industry, and
into the future.
This case company is a leader company in the
visual display market in both Taiwan and China. The
primary business is STN-LCD and CSTN-LCD
manufacturing which is applied in medical equipment,
Consumer Electronics etc. Besides STN-LCD, the
case company also develops application of TFT-LCD,
OLED etc. With the keen competition in 3G and large
size TFT-LCD, the small size LCD companies have
been forced to change their companies’ operation.
Therefore, the small size LCD companies have
entered the color flat-panel display market and
developed the related technologies to fit in with
customers’ needs. The case company has developed
various advanced technologies of LCD actively. It has
launched a strategic alliance to collaborate with
up-steam companies and take advantage of
technologies, concentrated resources and vertical
specialization in order to expand into the small size
TFT-LCD and mobile phone markets.

Table 4: The importance of collaboration

Short-term Medium-term Long-term
Market Create new value of Reduce risk of patent Develop markets and
(Product Diversification) product infringement customers effectively
Suppliers Integrated technology Create knowledge-based
Enhance image
(Product Customization) and resource economy
Technology
Ensure the value of New directions in Sustaining technology
(Product Sustaining
technology technology development innovation
Innovation)
62 International Journal of Electronic Business Management, Vol. 6, No. 2 (2008)
As Japanese companies have many patents in
many countries and the Korean companies spend
large resources on technology innovation, the case
company has to take design seriously. Consequently,
the case company has developed the collaborative IP
management model to avoid patent infringement and
ensure the value of design technologies. In this study,
we analyze the importance of the collaborative IP
model in three stages (Table 4).
3.1.2 Case company B
This case company is one of the leading PC
case and Server barebone manufacturers in Asia and
provides a wide spectrum of PC cases on an original
equipment manufacturer (OEM) basis to companies.
The case company also sells PC cases as own-brand
manufacturers (OBM). Approximately 60% of PC
cases produced by the company in 2005 were sold on
an OEM basis with the remaining 40% shipped under
OBM. According to the Market Intelligence Center,
in 2001, the case company had an estimated 6%
global market share, shipping approximately 6.16
million out of the 105.87 million units of PC cases
sold worldwide. The case company is the leading
manufacturer of PC cases in Taiwan in terms of total
units shipped. While PC cases are the company’s
principal core product, the case company also trades,
manufactures, markets and distributes server cases,
personal computer components and household
hardware products such as bathroom and kitchen
ware under OBM and on an OEM basis.
The Company operates two production plants
located in Taiwan, three production plants located in
China and one production plant located in USA with
a total annual capacity of approximately nine million
units in PC and server cases in 2001.
3.1.3 Case company C
This case company is one of the leading golf
club head manufacturers in Asia and provides
customers with the convenience of one stop shopping.
The case company provides the product design of an
international brand company by mature mass
manufacturing technology.
In 1998, the case company used CAD-CAM
and RP (rapid prototyping) technology to enhance its
ability as an OEM. The case company also integrated
information technology such as ERP, SCM, APS and
E-commerce systems. This integration efficiently
utilizes enterprise resources to strengthen CRM and
product globalization. In 2004, the case company
collaborated with the government on the project
named Co-Sports Chain with the vision of becoming
one of the most successful sports and recreation
manufacturing companies in the world, enhancing its
international competitive edge and marching along
the path towards ODM.
3.2 Structure of Research
In the case study analysis, the paper evaluates
and analyzes the operation, the strategies and the
performance of the businesses after the collaborative
mechanism is applied, with the aim of exploring a
beneficial collaborative business mode between each
company and its suppliers in this case study, as well
as the future collaborative trends. This research
mainly used interviews to conduct the analysis, but
these were also supported by information provided by
the case companies. The research was divided into
two stages. The first stage gathered literature about
product collaborative development and business
performance evaluation, with a wide range of
references and in-depth discussion, to establish the
research purpose, scope and method. The second
stage of case analysis started after this research
structure was created.
Major analysis dimensions of this research
include the following three dimensions: business
operation strategy, interaction between the business
and its collaborative firms, and product/service
performance. Please see Figure 1 for the structure of
the case study analysis.
Business Operation Strategy
Structure Segmentation
Technological Advantages
Operation Cost-down
Introduction of Collaborative Design
Product/Service Performance
Efficiency Improvement
Interaction between the business
and its collaborative firms
Operational Cost-down Operation Process
Functional Modules
Figure 1: Structure of the case study analysis
(1) Business operation strategy
Industry analysis helps the business realize its
current challenges and the speed with which it needs
to apply the collaborative design mechanism. The
research emphasizes marketing segmentation,
technology advantages and operational cost-down in
the markets to find out how collaborative design may
change the operational strategies of the business.
After the business decides its operational strategy, it
must find out how to interact and work together with
its partner companies when it applies collaborative
design. This will be the analysis focus in dimension 2.
(2) Interaction between the business and its
collaborative firms
The application of collaborative design in a
business will definitely influence its cooperative
relationship with its partner companies. Among all,
simplifying the product development process and
applying collaborative design modules are the most
influential factor in building closer and more
convenient communication and cooperation with
Y. Lin et al.: Research on Business Strategy and Performance Evaluation in Collaborative Design
partner companies. In this step, the research analyzes
how product development processes can be simplified,
and what functional modules should be applied to
serve as the bridge for communication with the
partner companies after the business installs
collaborative design software. This can help discover
how the business should interact with its partners.
The application of the collaborative design
mechanism changes the way the business works with
other companies in the same supply chain and the
way it operates. The operational performance
indicators that the business attaches the most
importance to will be covered by dimension 3.
(3) Product/Service Performance
The reason why the business applies
collaborative design is because it wants to improve
business performance. Hence, the research at this
phase discusses what the main performance indicators
are, how similar or different they are, and how they
will affect operational strategies and even alter future
strategies.
This research aims to discover the key reasons
for a business to apply the collaborative design
mechanism by discussing successful cooperation
modes with partner companies in a collaborative
mechanism. Main issues to consider are as follows:
a. Whether the business is unique in the
collaborative system.
b. Whether there is a specific business objective to
support the decision of applying collaborative
design.
c. Whether the performance evaluation before and
after application remains consistent.
d. Whether the performance evaluation and
business strategies are correlated.
e. How to use the experience of the case businesses
in applying collaborative design to indicate
considerations that have to be made during
application and to find out the key factors that
lead to success.
This research explores the importance and the
connection among business strategy interaction,
collaborative design, and business performance
evaluation. Therefore, the research assumes that a
business, its upstream suppliers and downstream
partners are connected in a collaborative design
system during the product development process of the
business. With this idea and attitude, in order to
improve research and development efficiency, the
enterprise and its partners will seek tighter
cooperation in areas such as market analysis,
customer participation, user participation, and so on.
4. RESEARCH RESULT
After the collaborative design is applied, it is
expected that the innovated operation mode of the
business and better performance will stimulate more
energetic communication between the business and
63
its partners. The process of product design, research
and development and production can be shortened,
which enables the products to enter the market at the
earliest time and therefore enhance business
competitiveness. This section discusses the five
questions about research process raised in Figure 2.
Along with the analysis of the case study interviews,
the result of this research is generated at the end.
Industry Environment Relationship
and
Management of Collaboration System
Q1
Introduction of Corporation
by
Strategy Target Collaborative Design System
of Q2
Corporation Business Q3
Performance Evaluation
Q4
of
Collaborative Design
Q5
KSF of Introduction
of
Collaborative Design Mechanism
Figure 2: Research structure
Question 1: The business applies the collaborative
design mechanism because of influence from its
collaborative partners
The researcher interviewed three case
companies and found out the following difficulties
faced by current businesses:
a. Higher complexity of product
b. Lack of information capacity, which has adverse
influence on the product development process
c. Lack of real-time communication
d. Product technology needs improvement
e. Customer-oriented service
Based on the abovementioned challenges faced
by businesses, this paper explains the responding
strategies of companies A, B and C respectively.
Table 5 illustrates the business strategies of the three
companies in response to the five challenges. In terms
of product complexity, companies A, B and C are in
different industries and therefore have different needs
in product development. So, even though they are all
participating in fierce competition, each of them has
come up with their own measures. The main product
of company A is consumer electronics. So, with rising
product diversity, company A established footprints
across multiple industries to satisfy diverse demands
of customers. Company B manufactures computer
cases, so it decided to transform itself to produce
products with higher added value and embark on a
new course of horizontal diversification. Company C
is a golf gear manufacturer. Since customers tend to
have high demands concerning gear design, the
company put emphasis on improving materials and
design technology to fulfill customer needs.
64 International Journal of Electronic Business Management, Vol. 6, No. 2 (2008)

Table 5: Strategies used by case companies to respond to current challenges

Case Company
Factors Company A Company B Company C
y Improve materials
y Operate across multiple
y Constantly improve
industries to satisfy y Transform and produce
Complexity of product design
customers products with more
Product technology
y Diverse customer added value
y More demanding of
demands
customized products
y Immediate changes and
confirmation of y Immediate changes and
y Reduce change of
products confirmation of
design
y Reduce change of products
Developing Time y Reduce communication
design y Reduce change of
of Product cost
y Reduce communication design
y Early participation in
cost y Early participation in
product design
y Early participation in product design
product design
y Establish information
platform
Good y Establish information y Real-time y Establish information
Communication platform communication with platform
Channel y Use on-line conference upstream suppliers and y Use on-line conference
downstream partner
companies
y Higher level of y Establish strategic y Upgrade casting
customization alliances with partner technology to
Improvement of
y Faster R&D of product companies highly-sophisticated
Product
y Improve design y Use specialization to level
Technology
technology of partner reduce influence of y Mainly use specialized
companies partner companies manufacturing
y Provide customers with
y On time delivery y Customers can keep complete product
Customer-oriented y Assist customers in track of product services
Service planning and design development y Assist customers in
products y On time delivery planning and designing
products

Question 2: The implementation of the
collaborative design mechanism in a business is in
relation to its aspiration to improve competitive
advantages and devise good strategies
Through interviews, the research finds out what
operational strategies companies A, B and C have
formulated. Aiming at increasing business
performance and market share, the three companies
came up with the following strategies (as shown in
Table 6):
a. Shorten development process of products
b. Reduce times of design change
c. Reduce product development cost
d. Share product design knowledge
e. Early participation in product R&D
f. Strengthen R&D capabilities of partner
companies
This paper makes the following conclusions
based on the interviews: Firstly, the purpose of a
collaborative design mechanism is to realize overall
operational strategies, because businesses apply the
mechanism and its functional modules according to
their various needs. Businesses always take the
expected benefits as main considerations. Secondly,
the case study has discovered that manufacturers in
Taiwan all have similar roles to play in the R&D
stage and therefore their strategies are alike. This
explains why their process and purpose of system
implementation are the same, which is also proven by
the fact that software providers usually help introduce
different functions according to different business
sectors.
Question 3: Performance evaluation after
collaborative design mechanism is implemented
The reason why this research discusses
performance evaluation is due to its expectation that
business will be able to set up an evaluation model
after it applies collaborative design. Through case
interviews, it was discovered that to finish
performance assessment, factors related to the
Y. Lin et al.: Research on Business Strategy and Performance Evaluation in Collaborative Design 65

system, the environment and the staff all must play
their roles. The interviews revealed that the best
assessment method is to determine the purposes of
the implementation of collaborative design before the
business actually does it. The business then should
review these purposes and use them as future
reference for adjustment.
Regarding performance evaluation, the
research has examined different scholarly viewpoints
and conducted cross-analysis using operational
strategies to put benefit indicators into appropriate
operational strategy categories (as shown in Table 7).

Table 6: Comparison of operational strategies of A, B and C

Case
Company
Operational Company A Company B Company C
Strategy
y Reduce development
y Shorten design
Shorten cycle of product
procedures y Standardize procedures
Development y Reduce preparation time
y Reduce development and synchronize data
Process of Products for parts and
work days
components
y Provide transparent
y Reduce
y Reduce times of design information and
Reduce Times of miscommunication and
change cause by design exchange design plans
Change of Design design change before
errors by 50% with partners to reduce
pilot production
design change
y Reduce material cost
y Accelerate product
y Cut down design cost
y Reduce design errors in launch and reduce
Reduce Product and communicate with
the supply chain and development cost
Development Cost customers on design
caused by these errors through collaborative
y Reduce cost of order
design process
processing
y Change mold via the
Share Product Internet to develop y Establish, share and use y Share product design
Design Know-how products collaboratively information know-how
with partners
y Participate in early
y Assess design
y Design the product with design, conduct
Early Participation requirement of faceplate
partner companies collaborative R&D with
together with supplies
customers
y Reduce workload of y More encouragement to
Strengthen R&D y Provide once-for-all
original planning staff employees
capabilities of purchase and
y Establish technology y Nurture talent to
Partner Companies customized service
support center develop new business

Question 4: Performance evaluation of performance assessment indicators after

collaborative design is related to operational
strategies
This research used Table 7 as guiding
principles for conducting in-depth interviews with
companies A, B and C. Five experts, including two
case company managers, two information process
consultants and one outsourced consultant, were
invited to evaluate the collaborative design
mechanism in the three case companies. After
reviewing the benefit evaluation made by
interviewees, the research discovered that case
companies are different in the level of collaboration
with upstream and downstream partner companies
and in the area of the application of the system. This
leads to the following points:
a. The evaluation results show that increase of
design and the accuracy of manufacture are main
businesses apply collaborative design.
b. The results also indicate that sharing know-how
can help enhance design and R&D capabilities
among partner companies. Furthermore, the level
of design accuracy is improved and therefore
development time can be shortened, unnecessary
cost is avoided, and design change is reduced.
c. For these businesses, applying collaborative
design does not bring obvious benefits to R&D
capabilities and convenient use of information
and technology. This is probably because the
companies and their partners put more emphasis
on design accuracy and the product development
process during collaborative product
development.
d. The period of application is another important
factor that affects performance. Companies A, B
66 International Journal of Electronic Business Management, Vol. 6, No. 2 (2008)
and C implemented collaborative design at
approximately the same time, so their general
performances are pretty much alike. Company C
does not score as high as the others in overall
Table 7: Relations between operational strategies and performance evaluation
Business Strategies
Shorten Development Process of Product
Reduce Times of Change of Design
Reduce Product Development Cost
Share Product Design Know-how
Early Participation
Strengthen R&D Capabilities of Partner Companies
Question 5: Key factors of success after businesses
implement a collaborative design mechanism
From actual implementation methods and
experiences of companies A, B and C, plus interviews
with collaborative design software providers, this
paper identifies the significant factors that determine
successful implementation as follows:
a. Support from high level management
Any changes to business process are destined
to be resisted by the users and face obstacles at the
beginning of application. Hence, high level
management must assist in promoting the new
changes from the top and forming consensus among
all members in the business.
b. Reduce resistance inside the business and partner
companies via training and communication
What case companies do is plan a series of
training courses. With the help of interaction with the
entire business, obstacles users meet can be spotted
and solutions can then be discussed. Businesses also
benefits, and the research conjectures this is due
to the high complexity of C's operations and lack
of design technology.
Performance Evaluation
y Increase market share
y Accelerate time to Market
y Improve accuracy of design and manufacture
y Good project management
y Good design change management
y Enhance production efficiency
y Improve design capability
y Improve accuracy of design and manufacture
y Effective use of technology
y Good design change management
y Reduce design and R&D cost
y Reduce production cost
y Transparent information
y Improve design capability
y Improve accuracy of design and manufacture
y Effective use of technology
y Convenient use
y Synchronized process of business
y Enhance production efficiency
y Customer expectation
y Improve design capability
y Improve accuracy of design and manufacture
y Good project management
y Good design change management
y Synchronized process of business
y Transparent information
y Customer expectation
y Improve design capability
y Improve accuracy of design and manufacture
y Effective use of technology
y Convenient use
establish mechanisms to share documents and
experiences.
c. Establish a project execution team inside the
organization and specify responsibilities for each
member
During interviews, it was found that the case
companies all established a project execution team
when introducing collaborative design into the
business. A team comprised the case company, its
partners, suppliers and so on, while each member has
specific responsibility.
d. Build up system interfaces and main task check
points to help keep track of the system and the
project team review performance
All case companies choose functional modules
according to their current information capability and
cooperation mode with upstream and downstream
partners to match their business strategies. The
implementation is finished stage by stage to avoid
Y. Lin et al.: Research on Business Strategy and Performance Evaluation in Collaborative Design
overlong establishment time and potential risks
brought about by the system.
e. Examine and check original information, prevent
new system failure due to wrong information
A new system involves many players, and
suppliers, customers and partner companies all need
to link their information systems to the new system,
so it is a must to examine and check the old system
when installing the new.
f. The abilities of consultants from software
providers and outsourced consultants
A business must possess certain specialized
know-how to operate, and its role in the industry
affects its business strategies and operational
objectives. As a result, specialized technicians and
consultants from outside the business must fully
understand the industry climate and the industry
structure that confronts the business, as well as the
operation mode of the company. They must also have
good communication skills and abilities, which are
accumulated with their experience in establishing
collaborative systems.
g. Effective integration with current system:
Good integration of the old and new systems
will not only reduce data errors and repetition, but
avoid waste of resources.
5. CONCLUSION
The authors did interviews with some
managers, consultants and employees in these three
case companies to verify the results of the study. The
conclusions can be summarized as follows:
(1) The application of collaborative design is not
merely a technical feasibility but a choice driven
by market competition
Collaborative design has been drawing more
attention because of the rapid advancement of
information technology in recent years. Customers
demand more from quality products and efficient
R&D, forcing the business to understand their
demands better and work with upstream and
downstream partners on product development.
(2) When implementing a collaborative design
mechanism, the overall business condition must
be taken into consideration
Based on the interviews, we found out that
what makes case companies commit to putting in
resources is its aspiration to not only manufacture
products but participate in product development at an
early stage to cut down cost, reduce change of design,
and make products available more quickly.
(3) Factors that drive the growth of collaborative
design
a. Customer demand
The traditional production-oriented market has
turned into a customer-oriented market. Businesses
have to provide products or services with better
67
quality and availability. To achieve this goal,
improving the product development process and
having real-time communication with customers and
suppliers is one of the most effective approaches.
b. Competition
Businesses participate in product development
to cut down costs and increase competitiveness. In
the future, the ones who can sharpen the collaborative
mechanism and benefit most from it first will enjoy
the strongest competitiveness.
c. Information and communication needs
In product development, share all information
is a basic contributor to success. Nowadays, products
and technologies are increasingly complicated, so a
collaborative platform allows the business to
communicate with the customers and suppliers in
time.
(4) The research lists steps to implement
collaborative design successfully according to
the case study
a. Clarify current business strategies
b. Clarify the role and purpose of the business in
product development
c. The president and high level managers should
formulate solutions based on business strategies
and feasibility
d. Review and redesign the processes and
responsibilities of business activities
e. Establish a specialized coordination team
f. Break the barriers among businesses to
encourage willingness to share information
g. Formulate solutions that can integrate upstream
suppliers and downstream customers
h. Establish benefit indicators and performance
evaluation methods; evaluation targets should be
jointly decided by the business and its partners
and regarded as important reference standards at
all check points.
i. Offer timely training to partner companies
j. The implementation of collaborative design
involves many aspects; it is more important to
accumulate experience than describe success and
failure.
Along with the use of collaborative design,
innovative changes in business operation and
improvement in business performance stimulate
energetic communication between the business and
its partner companies. Time of product design, R&D
and production is shortened, so that products can
enter the market and grasp early opportunities, which
enhances business competitiveness. Companies A, B
and C are located in different industries and have
different needs for product development, so they
uphold diverse response strategies even though they
all face cut-throat competition. However,
manufacturers in Taiwan mostly have the same role
and position in product development and therefore
come up with similar strategies. This is why their
68 International Journal of Electronic Business Management, Vol. 6, No. 2 (2008)

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ABOUT THE AUTHORS
Yi-Chen Lin received her Ph.D. degree in
management from The University of Hull U.K. She is
an associate professor and the director of Graduate
Institute of Technology Management in National
University of Tainan, Taiwan. Her research interests
include Customer Relationship Management (CRM),
Integrated Marketing Communication, and
Collaborative Commerce.
Magnolia Yulan Hsing received her Ph.D. degree in
public policy from George Mason University. She is
an assistant professor in Graduate Institute of
Technology Management, National University of
Tainan, Taiwan. Her research interests are Policy
Analysis; Industrial Development; Technology
Policy; Innovation System; Internet Economics and
Internet Technology Application.
Yi-Chuan Wang is a graduate student of Technology
Management at National University of Tainan and has
research interests in the area of Customer
Relationship Management (CRM) and Integrated
Marketing Communication.
(Received November 2007, revised March 2007,
accepted May 2008)