Demand Chain Strategy and Chinese Firm Performance: Role of IT Analytic Capability and Product Life Cycle

Demand Chain Strategy and Chinese Firm Performance: Role of IT Analytic Capability and Product Life Cycle

Bingfeng Bai, Junjun Gao, Weili Yin
DOI: 10.4018/IJISSCM.2021100105
OnDemand:
(Individual Articles)
Available
$37.50
No Current Special Offers
TOTAL SAVINGS: $37.50

Abstract

The purpose of this research is to enhance the extant understanding of the information technology (IT)-strategy relationship. The study aims to test the robustness of the relationships among the concepts of IT analytic capability, demand chain strategy, and firm performance besides investigating the interaction effects of product life cycle (PLC) management on the IT-strategy relationship. Based on the resource-based view (RBV) of the firm and the research paradigm of “capability-strategy-performance,” 300 Chinese fashion firms were surveyed to collect data by Demand Chain Research Institute of Shanghai University. In order to test the hypothetical relationship in the conceptual model, valid questionnaires from 185 firms were collected in this study, and the effective rate reached 61.7%. Findings suggest that IT analytic capability associates positively with demand chain strategy, and PLC plays a moderation role between IT analytic capability and demand chain strategy. The findings further support the link between demand chain strategy and better firm performance. This study contributes to existing information systems and operation management literature by the above effects in the retail context. Overall, these results reflect recent business and transformation changes from supply chain strategy to demand chain strategy for the Chinese fashion industry.
Article Preview
Top

1. Introduction

Traditional supply chain management research focuses on operational aspects by stressing the efficient flow of products and services from key suppliers (Lee, Padmanabhan & Whang, 1997; Cachon & Lariviere, 2005; Yan & Ghose, 2008; Teller, Kotzab & Grant, 2012), but recently more emphasis has been placed on supply chain strategy for better firm performance (Kristal, Huang & Roth, 2010; Roh, Hong, & Min, 2014; Sweeney, Grant, & Mangan, 2018). That is, supply chain strategy enables firms to facilitate the flow of information and materials in supply chain at the operational level (Lambert, Cooper, & Pagh, 1998; Frohlich & Westbrook, 2001; Li, Mao, & Xia, 2008; Madhani & Pankaj, 2017). Specifically, coordinated planning and programs of supply chain strategy provide access to information to control value-added activities, eventually contributing to enhance performance (Germain & Iyer, 2006; Rodrigues, Stank & Lynch, 2004; Qi, Boyer & Zhao, 2009; Qrunfleh & Tarafdar, 2014; Tarafdar & Qrunfleh, 2017). For example, Defee and Stank (2005) proposed the SSP model framework, including supply chain strategy, structure and performance, which shows that supply chain strategy influence the development of firm structure and performance. Applying the SSP framework, scholars propose that firms can generate competitive advantages at the cluster of supply chain members rather than individual level, and this method has become the theoretical research mainstream of supply chain strategy (Patel, Azadegan, & Ellram, 2013; Overstreet et al., 2014; Dai, Cantor, & Montabon, 2017). Indeed, previous studies have established a positive relationship among information technology (IT), supply chain strategy, and firm performance (Vickery, Jayaram, Droge & Calantone, 2003; Treville, Shapiro, & Hameri, 2004; Kristal, Huang & Roth, 2010; Qrunfleh & Tarafdar, 2014).

However, global firms have undergone tremendous commercial changes and revolution in recent twenty years, which force firms to develop a large number of new products in response to personalized consumer needs (Anshari et al., 2019). Especially, with the rapid development of e-commerce and omni-channel retail in the marketing environment (Bijmolt et al., 2021), the types of market products offered are increasing, and the life-cycle of single product is getting shorter. So that the supply chain mode dominated by operation is greatly challenged. How should firms respond to the above challenges? Successful business practices in the fashion industry provide some research inspiration, for instance, the cases of international fashion firms such as ZARA and H&M, are skilled in product management by applying the demand chain model (Giancarlo, 2013). Since consumer demand is variable in the competitive environment, the demand-led supply chain is needed nowadays (Huo, Wang, & Zhao, 2017). Demand chain is dedicated to integrate marketing and supply chain processes, which has attracted widespread attention in academia and practice (Bustinza, Parry & Vendrell, 2013). Further, demand chain is a dynamic network that can enhance the profitable relationship with customers, which coordinates supply chain and analyzes the perceived value that customers get from products or services (Ye & and Lau, 2018).

Complete Article List

Search this Journal:
Reset
Volume 17: 1 Issue (2024)
Volume 16: 1 Issue (2023)
Volume 15: 7 Issues (2022): 6 Released, 1 Forthcoming
Volume 14: 4 Issues (2021)
Volume 13: 4 Issues (2020)
Volume 12: 4 Issues (2019)
Volume 11: 4 Issues (2018)
Volume 10: 4 Issues (2017)
Volume 9: 4 Issues (2016)
Volume 8: 4 Issues (2015)
Volume 7: 4 Issues (2014)
Volume 6: 4 Issues (2013)
Volume 5: 4 Issues (2012)
Volume 4: 4 Issues (2011)
Volume 3: 4 Issues (2010)
Volume 2: 4 Issues (2009)
Volume 1: 4 Issues (2008)
View Complete Journal Contents Listing