E-business strategy development: an FMCG
sector case study
M. Webster, R. Beach and I. Fouweather
University of Bradford School of Management, Bradford, UK
Purpose – This paper sets out to discuss the development of an e-business strategy by a UK soft drinks company. It is based within the Fast Moving Consumer Goods (FMCG) sector (also known as Consumer Packaged Goods), which is characterised by powerful retailers, tier-1 suppliers of industrial end-products and ingredient/raw material producers further upstream. The paper aims to examine the tensions created at tier-1 level relating to the adoption of e-business solutions for B2B activities.
Design/methodology/approach – The paper draws on the literature to describe the technological options for achieving e-commerce, focusing particularly on Electronic Data Interchange (EDI) and internet-mediated e-commerce. It then explores the current uptake of e-commerce, and the drivers and barriers that relate to its adoption. The theoretical issues identified are explored empirically using data gathered from a case study of Princes Soft Drinks. A detailed survey of organisations within its supply base was conducted in order to inform the development of its future e-business strategy. Findings – The results of the survey indicate a lack of enthusiasm among Princes’ supply chain members for the adoption of e-commerce generally and for internet-mediated e-commerce solutions in particular.
Research limitations/implications – The empirical survey is limited to the UK soft drinks sector and allows for the development of descriptive findings. These findings, discussed within the theoretical context of the paper, have potentially wider implications for the FMCG sector as a whole. Practical implications – The work has significant implications for the development of Princes’ e-business strategy, and – by extrapolation – for other companies operating in similar commercial environments.
Originality/value – The paper reports original empirical research in the commercially important FMCG sector. Its value stems in part from the examination of the supply chain tensions created at tier-1– between powerful e-committed retailers and e-reluctant industrial suppliers. Keywords Electronic commerce, Internet, Fast moving consumer goods Paper type Case study
Electronic commerce (e-commerce) refers to the conducting
of business transactions over electronic/computer networks,
including the internet, (Barnes and Hunt, 2001) and
therefore encompasses processes related to the buying,
selling and trading of products, services and information,
(Gunasekaran et al., 2002). There has been considerable
publicity given to the use of e-commerce in business-toconsumer (B2C) markets, where transactions involving such
activities as ordering goods, personal banking and share
trading are becoming increasingly commonplace. However,
the use of e-commerce for business-to-business (B2B)
transactions has been widely identified as an area with
significant potential for cost saving and future revenue
generation (Barnes and Hunt, 2001). For businesses, B2B
can mean electronic interaction with members of the supply
base, i.e. for inbound procurement, and with customers for
transactions relating to their procurement activity.
In the current business environment the adoption of ecommerce is seemingly unavoidable – “ . . . e-commerce is no
longer an alternative, but an imperative. [However] many
companies are struggling with the most basic problem: what is the best approach for establishing and doing business in the digital economy?” (Lee, 2001, p. 349). This suggests that, in moving into an e-commerce business environment – over
which there is little choice – there is a need to develop an ebusiness strategy that will inform and direct future operations.
Lee goes on to argue that in addressing this problem, there is no simple prescription or established business model for...