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This paper aims to theoretically investigate an online company’s optimal decision on its offline expansion strategy. In the past five years, many large online retailers and internet-based companies such as Amazon, Google, Alibaba, Tencent and JD.com have expanded their offline market but it was observed that they adopted different expansion strategies. Specifically, some of them expand the offline market by acquiring offline retailers, while some do so by purchasing a portion of offline retailer’s stake. This difference leads to a quite different structure in post-expansion market, having an impact on profit, consumer surplus and social welfare. The goal of this paper is to model such expansion strategies in a general way and complete studies on profits and welfare.

By constructing a Salop model with two offline retailers and one online company, this paper analyzes the case where the online company can expand its offline market by either acquiring or jointing (e.g. stakeholding) with one offline retailer. The former strategy (named Strategy A) allows the online company to fully control and capture residual claims of the offline retailer. With the adoption of the latter strategy (named Strategy C), on the other hand, the online company can obtain a fixed proportion of its offline partner’s quasi rent. In the price competition, the online company chooses its optimal offline expansion strategy by predicting its profit in the post-expansion market.

This paper found that the equilibrium crucially depends on the synergy effect due to online–offline integration, and such synergy also influences both consumer and social welfare. This study shows the various conditions on the synergy that affect an online company moves toward offline markets. Accordingly, this finding can assist online companies with or without retailing business to choose an optimal strategy when expanding offline markets. Moreover, by doing some necessary welfare analysis, this study shows that the online company’s offline expansion is not always benefiting consumers nor be socially desirable, which may shed some lights on the possible competition policy in the case where online companies practice in offline expansion.

Different from conventional wisdom in online-offline integration, the theory indicates that the offline expectation of online company may not always benefit consumers nor be socially desirable. Moreover, the findings also shed some lights on the possible competition policy in the case where online companies practice in offline expansion.

The purpose of this study is to develop new frameworks for operations strategy and service system design in electronic commerce (EC) to provide strategic insights to academics and practitioners.

Product/service process matrices for intangible and tangible products in EC operations are presented based on the classification of products and delivery channel options and three cases are investigated to illustrate the newly developed matrices.

The fit between two dimensions (characteristics of product/service, service delivery processes) in the matrices contributes to firm's competitiveness through market expansion and improvement of customer services. Through the case studies, it was confirmed that the conceptual framework developed in this study illustrates actual EC operations well.

Further case or empirical research on more diverse products or services will be required to increase robustness of the matrices and to additionally confirm the results of this study including the effects of the “fit”.

The new frameworks have the potential to be useful as a planning tool in developing an operations strategy and service system design, as well as a diagnostic tool for examining the causes of poor service quality and low customer satisfaction resulting from a mismatch between two dimensions.

The development of new frameworks is an important first step in the gradual process of theory building and theory testing, as well as providing strategic insights for practitioners.

This paper seeks to examine expansions of online brands into the offline market via brand extensions and via brand alliances. Specifically, it aims to compare the formation of reciprocal spillover effects for both strategies.

Empirical survey data are analyzed through a series of standard and hierarchical multiple regressions. Different combinations of online brands, product categories and offline brands are studied.

The main results indicate that: the attitude towards the new product is determined by fit and by the functional offline brand image for alliances, while it is determined by fit and by the emotional and commitment dimensions of online brand image for extensions. Moreover, the online brand image is more vulnerable in brand alliances than in extensions.

This work shows the applicability of commonly used theories in brand extensions and alliances to the online‐offline market expansion. Moreover, these theories allow differences across marketing strategies and across distinct brand image dimensions to be explained.

The results obtained may guide the management of these market expansion strategies. Particularly, the present findings are useful to predict the contribution of each brand image dimension on the attitude towards the new product and upon the feedback effects swaying the online brand image.

This study addresses “a hot topic” in branding by comparing two expansion strategies: brand extensions and brand alliances. This comparison is made within the under‐researched area of online branding, and in a novel scenario that is the online‐offline expansion.

From the perspective of the institution and internationalization speed, the article discusses the internal mechanism of cross-border e-commerce selection mode, as well as the moderating role of social networks as the intangible resource, and expand the theoretical system of corporate internationalization.

Based on the empirical data of 456 multinational e-commerce companies in five first-tier cities in China from 2016 to 2019, our research explores the selection mode of cross-border e-commerce.

The results show that (1) the institutional distance of the host country leads to the exit from cross-border e-commerce platforms in the international expansion of enterprises. (2) The difference in internationalization speed online and offline has become a mediated mechanism for the exit of cross-border e-commerce platforms due to the institutional distance of the host country. (3) The diversity and scale of offline social networks can weaken the impact of differences in internationalization speed on the exit from cross-border e-commerce platforms. (4) The resistance of companies expanding to countries with a weak institutional environment is greater than that experienced when expanding to countries with a strong one.

This study shows, for the first time, how to select expansion mode for cross-border e-commerce. And the paper also centers on the research of the impact of “social network”, a kind of intangible resource, on cross-border e-commerce platform adoption.

The purpose of this paper is to investigate the effect of online service failure on online customer satisfaction and offline customer loyalty, and the moderating role of brand strength is also examined. While extant research on brick and click service mode recognizes the positive spillover effect from offline stores to online stores, this study analyzes the negative spillover effect from online stores to offline stores.

This paper tests the hypotheses by two studies. Study 1 is based on a 2 (failure severity: mild vs severe) × 2 (brand strength: strong vs weak) between-subjects experimental design using scenarios in a brick and click retailer context, while study 2 is based on data collected from a scenario-based questionnaire survey and analyzed through the structural equation modeling.

The results indicate that participants exposed to severe online service failure show lower online satisfaction as compared to their counterparts exposed to mild online service failure, but they show the similar level of offline loyalty in both degrees of online service failure. Nevertheless, these results are not moderated by brand strength significantly.

An experimental design and a scenario-based questionnaire survey are used to test the framework. However, the generalizability of the research findings is still limited to a specific study setting. Future research in a different setting is needed to further validate the presented findings.

The findings suggest that physical service providers should adopt aggressive online expansion strategy to seize the market and pay more attention to online service quality rather than online marketing only.

This is one of few studies to explore the risk of brick and click service mode, and provide a clear understanding of the likely occurrence of online service failure and its impact on online customer satisfaction and offline customer loyalty. It extends prior research by exploring non-existence of negative perceptual effect from online service failure to offline customer loyalty in the short run and weakening brand effect, which contributes to cross-channel spillover effect in the integrated multi-channel context and brand building in the internet era.

This empirical study aims to examine luxury fashion retailers' localised multiple channel distribution strategies in China.

Through case studies of 15 participating retailers, qualitative data were collected from 33 semi-structured interviews.

Strong impacts of internationalisation strategies, distribution strategies and channel length towards multiple channel retailing are revealed. Multi-channel retailing is widely employed by firms who have entered China and further developed their businesses through local partnerships and adopted a selective distribution strategy via relatively longer channels. Omni-channel retailing is only suitable for the few retailers using an exclusive distribution strategy through direct marketing and wholly owned customer relationship management. As a dynamic transformation from multi- to omni-channel retailing, cross-channel retailing is adopted by those who are withdrawing from local partnerships and shifting to wholly owned expansions and operations in host markets.

The results are potentially challenged by relatively small sample size.

Practitioners are suggested to adapt multiple channel retailing to their international expansion strategies, distribution strategies and channel length in the host markets.

This paper contributes to the literature in both multiple channel retailing and international retailing by offering insights into the motives, development patterns and suitability of multiple channel retailing in the international retail marketing context.

This paper aims to first, identify the external and internal factors that a company needs to analyze when formulating its digital platform strategy. Based on the framework of PESTNPG (political economic social and culture technological population and globalization) and internal analysis a company should analyze both internal and external factors to formulate its digital platform strategy. For companies from emerging markets the institutional-based market created by national or local governments is important for digital platform strategy. Second dynamic capability theory and its linkages to digital platform strategy. The dynamic capabilities view is considered as a primary theoretical lens in the strategy literature to analyze a company’s strategies to achieve sustainable competitive advantages. To carry out a successful digital platform strategy companies need to build strong dynamic capabilities to capture or create opportunities and reconfigure their resources simultaneously. Third the advantages and disadvantages of different digital platform strategies (i.e. an independent digital platform and online–offline integration platform) and the possible consequences and risks of different strategies. It is important to evaluate different types of digital platform strategies that require different capabilities in terms of business structure product structure revenue structure organizational structure and technology architecture. A company needs to link these capabilities to a digital platform strategy to enable the integration (or separation) of online business with offline business. It also increases the accuracy and efficiency of online business. Fourth key points of digital platform strategy implementation. Companies need to identify key profit models for their digital platform to promote business growth and financial returns. It is equally important to increase customer value by leveraging its digital exhibition platform and to learn to use digital technology to foster organizational dematerialization.

Zhejiang Meorient Commerce & Exhibition Inc. (hereinafter referred to as “Meorient”) was a leading company in the exhibition industry in China. The unexpected outbreak of COVID-19 plunged Meorient into a state of emergency that forced it to fight for survival. Further, China had launched a national strategy of Digital China, which created new market opportunities for Meorient. As a result, Meorient gradually developed and launched its digital exhibition services in 2015. Meorient suffered significant losses in 2020 due to COVID-19 and had to formulate a new strategy based on a digital exhibition platform in 2021. Chairman Pan Jianjun had two options. One was a purely digital platform strategy without the original offline exhibition business. The other one was an online and offline integration strategy. Which option was the best way forward for Meorient? Pan had to make a choice. Some of the top management team members believed Meorient should completely transform into a digital platform company and provide comprehensive online digital exhibition services. Over the previous 20 years, Meorient had accumulated a large amount of data from domestic and foreign exhibitors and professional buyers and had gradually developed a digital exhibition platform. It was one of the companies that pioneered digital transformation within China’s exhibition industry. More conservative thinking held that Meorient's strategy should focus more narrowly on the integration of online and offline exhibition businesses. Toward the post-pandemic era, China’s national strategy of “Digital China” accelerated the development of digital infrastructures. During such critical transitional period, Meorient had to choose wisely if it was to sustain its profits or even survive.

The case is aimed at students in undergraduate, MBA, short course executive, EMBA or other executive education programs, especially where digital transformation is featured subject matter.

Teaching notes are available for educators only.

CSS 11: Strategy

Internet + and Electronic Business in China is a comprehensive resource that provides insight and analysis into E-commerce in China and how it has revolutionized and continues to revolutionize business and society. Split into four distinct sections, the book first lays out the theoretical foundations and fundamental concepts of E-Business before moving on to look at internet+ innovation models and their applications in different industries such as agriculture, finance and commerce. The book then provides a comprehensive analysis of E-business platforms and their applications in China before finishing with four comprehensive case studies of major E-business projects, providing readers with successful examples of implementing E-Business entrepreneurship projects.

Internet + and Electronic Business in China is a comprehensive resource that provides insights and analysis into how E-commerce has revolutionized and continues to revolutionize business and society in China.

This case study is designed to enable students to formulate the strategic planning process in relation to an organization’s resources; assess the critical tasks required for the company’s business planning for growth and market expansion; and examine the importance of the value delivery process for the company, its customer and its employees. At the end of the case discussion, students will learn how to plan their business in an emerging market by using their existing resources, where the business stands at present and where it may go in the coming future.

The case study discusses how Byju’s, an Indian multinational educational technology company, revolutionized student learning programs through its innovative strategic implementation. It explores the company’s growth and expansion strategy by considering a strength, weakness, opportunity and threats analysis. It elaborates on how Byju’s acquired various companies in India and other countries to become an international technology-based educational brand with 150 million users in 2022. The case study also highlights the marketing and promotional strategy used by the company on online and offline platforms. The case study elaborates on the value delivery process and its importance for customer and employee satisfaction. Despite its success in the Indian market, Byju’s faced tough challenges in the US and European markets, such as lower-than-expected growth rates and lower subscription numbers, even though it followed the same strategy as in the Indian market. The acquisition and celebrity strategy works in emerging economies such as India but not in developed countries. The company’s return on investment was down owing to the high costs it had incurred over the years on market acquisitions and marketing promotions. The growing competition was also expected to bring more challenges for Byju’s. New players such as Tata Studi and YouTube planned to enter the market. Byju Raveendran and his management group had to decide whether to maintain or change the current market offering to reflect market developments to satisfy their customers and employees. They also had to determine whether the main components of the marketing strategy, such as the company’s ongoing value delivery process and ongoing strategy toward the target audience, partners and rivals, are advantageous to the firm or not. The team was in dilemma whether the marketing planning process was going in the right direction and how to make all elements of its businesses more efficient in dealing with the issues. Raveendran kept asking questions about to what extent it is still possible to alter the marketing plan.

The case study is appropriate for discussion in courses such as marketing management, service marketing and strategic marketing management, whether they are part of an undergraduate program (Bachelor of Business Administration [BBA]), a postgraduate program in business management (Master of Business Administration [MBA]) or an executive-level program (executive MBA). The breadth of business topics addressed and the intricacy of the scenario make this case study best suited to be used after the semester as either a culminating project or as a seminar discussion for undergraduates (BBA). The case study can also be discussed in the marketing management course (graduation level) under the marketing and service strategy chapters.

CSS8: Marketing

Teaching notes are available for educators only.

The aim of this paper is to identify ways and motives of application of e-commerce in the foreign expansion of small and medium enterprises (SMEs) fashion brands.

A multiple case study was used as the research method. Data were obtained from primarily in-depth interviews with managers of four Polish SMEs –fashion brands owners, whose products are sold in the foreign markets using e-commerce, and secondary sources.

Through this study the authors identified both strategic-proactive and market-reactive motives of e-commerce applications in SMEs’ fashion brands in the internet-enabled foreign expansion and three different models of usage of e-commerce in the foreign expansion of SMEs.

The research was based on the multiple case study of only Polish SMEs in the fashion industry. The conclusions of this study can be applied by fashion companies in their internet-based foreign expansion.

This study contributes to the existing body of literature on the internationalization process of SMEs, and particularly on the application of cross-border e-commerce in the foreign internet-enabled expansion of fashion SMEs by identifying three various models of applying e-commerce, in the internet-enabled foreign expansion and their both proactive and reactive motives.