B2B E-Marketing Strategies of Multinational Corporations: Empirical Evidence from the United States and Australia

Tanuja Singh, Northern Illinois University Geoffrey Gordon, Northern Illinois University Sharon Purchase, University of Western Australia

Introduction
The Internet continues to be viewed as one of the revolutionizing tools that has radically changed the dynamics of commerce around the world. Despite the fact that early estimates of the potential of this tool have been subject to frequent and dramatic revisions, the Internet has nevertheless created a paradigm shift in the business world. In this brave, new world of business, a firms corporate website acts as the gateway for visitors and potential customers to find critical information about the company as a whole, as well as its product/service offerings (Leek, Turnbull and Naude 2003). Ecommerce is becoming more and more a major element of competitive advantage for those firms savvy enough to harness its potential (Radovilsky and Hegde 2004). While the business-to-consumer (B2C) models of the Internet and e-commerce continue to garner the most press, Internet revenues in the business-to-business (B2B) sector are not only significantly higher, they have also largely remained shielded from fluctuations of theB2C sector. Estimates suggest that B2B electronic commerce amounts to about six times the size of the B2Csector (Eng 2004). B2B trade around the world was expected to total around $2.7 trillion by the end of 2004 (eMarketer 2003). Furthermore, studies indicate that the U.S. continues to account for more than half of the worldwide B2B revenues (eMarketer 2003). [All data are in U.S. dollars unless stated otherwise.] Eight to ten years ago, B2B firms large and small, may have asked themselves the question of whether or not to move their business to the Internet. Today, companies no longer ask themselves that question for the answer is simple; they can no longer exist without somehow being on the Internet (Lichtenthal and Eliaz 2003). While researchers have addressed the B2B uses of the Internet within a domestic (often U.S.) context, academic inquiry for global B2B operations, particularly as it relates to marketing strategies of multinational corporations (MNCs), still remains a fertile area for research. Few studies, if any, have empirically examined the nature and scope of the Internet for B2B marketing within a global context. For example, while it is well documented that developed countries lead the world in Internet applications and e-commerce, little is known about whether and how MNCs from these countries integrate the Internet into their overall global strategies. Furthermore, the factors that influence the decision of MNCs to make the Internet an inherent part of their global marketing strategy have not been examined. This study attempts to fill this knowledge gap by investigating the role of the Internet in the globalB2B marketing strategies of MNCs from two developed countries where the growth of the Internet has followed a similar patternthe United States and Australia. These two countries have numerous similarities in terms of technology adoption; technology trends in the two countries also suggest a similar evolutionary pattern for both B2B and B2C markets. Currently, Australia, with 68.4 percent of the population using the Internet, is among the leaders in Internet penetration; this number is quite comparable to the U.S. where at last count 68.6 percent of the population was on the Internet (Internet World Stats 2005). This paper has three main objectives. First, it examines how MNCs from the two countries, Australia and the United States, currently use and plan to use the Internet and related technologies in their global B2B marketing strategies. Second, the study examines the underlying dimensions and nature of Internet use in the MNCs global B2B operations. Finally, it evaluates facilitators and barriers to the implementation of Internet-based marketing strategies in a globalB2B setting.

Background and Hypotheses

It is evident that several characteristics of the Internet make it an especially valuable tool for theB2B sector. From simplifying data collection and delivery to enhancing product management/innovation activities and improving collaboration among strategic partners, the Internet offers numerous opportunities for enhanced value delivery. Furthermore, the benefits of using the Internet in the B2B sector are long-term and more likely to be shielded from the fluctuations that characterize the B2C sector. The migration to e-commerce is not only a

growing trend but also an irreversible one as more and more business organizations are determining that in order to be effective competitors in todays marketplace, they need a solid e-business foundation (Leu, Addo and Chen 2003). Supposedly, the primary difference between domestic e-business and international ecommerce is one of complexity (Xu, Wilkinson and Brouthers 2002) but the fundamental driving forces are very similar. Therefore, it appears reasonable to propose that MNCs should benefit from incorporating the Internet into their global marketing strategies as well. In particular, the Internet in global B2B operations should facilitate tasks such as communicating with suppliers, customers, and partners who often tend to be located globally these days. Further, it should help reduce product development costs and enhance productivity by facilitating more efficient collection, sharing, and dissemination of information, among other things.

B2B E-Commerce in the U.S. and Australia

B2B transactions continue to grow in the U.S. According to IDC, B2B e-commerce spending should continue at a 50 percent growth rate through 2007 (Schifrin 2004). While estimates vary considerably, the volume of B2B e-commerce far exceeds that of B2C e-commerce (Dinlersoz and Hernandez-Murillo 2005). The U.S. is expected to remain the largest global market for B2Bcommerce and the absolute size of the B2B market is far smaller in Australia relative to the U.S. However, B2B transactions and investment into related technologies are rising in Australia and its trends mirror that of the U.S. For example, forecasts of B2B revenues in Australia for the year 2002 ranged from $6-$20 billion Australian dollars and some believe that by the end of 2005, this sector would have generated $133-$235 billion Australian dollars. In the time period 2001-2003, the amount of selling by Australian firms via the Internet more than doubled and the number of companies that garnered 5 percent or more of their business income from the Internet grew from 37 percent to 42 percent of Australian firms (Australian Bureau of Statistics 2005). Further, spending on Internet technologies and other web initiatives by businesses continues to increase in both countries. In Australia, 66 percent of the nations top 1,000 companies are in the planning or execution stages of B2B projects (Bryan 2005). The on-line procurement market continues to grow in Australia at a compound annual rate of about 25 percent (IDC Research 2001). Research findings suggest that within the Australian commercial sector, businesses, irrespective of their size, are adopting Internet technology; more than half of the small businesses in Australia now use the Internet. Over the past several years, the Australian Government has introduced a B2B incentive scheme designed to attract small- and medium-sized business enterprises to electronic commerce (Byrne 2002). During 2002-2003, the Australian Bureau of Statistics reported that the value of e-commerce was approximately $24.3 billion Australian dollars, representing a doubling of income over a one year period. This amount constituted 1 percent of total income for all businesses and approximately 5 percent of total income for businesses which received orders via the Internet (Australian Bureau of Statistics 2005). Australias leading advertisers were reported to be allocating 9 percent of their advertising budget to the Internet in 2005 (Kelly 2005). The Australian government is among the leaders in terms of e-Government development and Internet usage among the general population continues to grow as well (IDC Research 2002). In essence, the e-business outlook for Australia looks promising and the evolution and growth of the Internet in Australia have been very similar to their growth in other developed economies including the U.S. Therefore, it appears plausible to hypothesize that despite the difference in the absolute size of e-commerce in the U.S. versus Australia, U.S. and Australian MNCs would not differ much in terms of their overall usage of the Internet for their global B2B marketing operations. Accordingly, it is proposed that:

H1: There are no differences between U.S. and Australian MNCs in terms of their Internet usage for global B2B marketing operations.

Internet and Global B2B Marketing

While the role of the Internet in global B2B marketing has not been specifically addressed in previous empirical studies, it is logical to assume that many of these uses should parallel the domestic uses of the Internet. Further, it should make sense that the greater the pervasiveness ofB2B e-commerce within an organizations current domestic operating systems, the greater the pervasiveness of B2B e-commerce should be on a global level (Claycomb, Iyer and Germain 2005). In general, researchers have drawn on several frameworks to evaluate how the Internet is transforming or would transform the B2B marketplace. For example, several researchers (Berthon et al. 2003; Kaefer 2004; Grey, Olavson and Shi 2005) use a transaction cost perspective to suggest that not only does the Internet reduce transaction costs but that it also reduces barriers to entry and intermediation between buyers and sellers. They point out that transaction cost savings alone (from B2B exchanges) could be a substantial portion of total cost and order fulfillment.

The Internet reduces the costs of search, information, and bargaining for buyers while at the same time creating substantial efficiencies in the buyer-seller dyad by reducing communication, decision, policing and implementation costs. These researchers further suggest that the resulting efficiencies are more than merely cost savings for participants in the exchange. They believe that the quality of intra-firm as well as inter-firm transactions is enhanced as cost-cutting is coupled with value-added outcomes for participants in the exchange. In essence, the Internet improves informational access and furnishes a platform of instant and constant connectivity while simultaneously allowing firms to reduce costs (Sharma 2002). It appears plausible that the same drivers would apply in a global B2B setting as well. Along the same lines, a report by the Organization for Economic Cooperation and Development (OECD) (cited in Dunt and Harper 2002) identified three variables that are driving B2B e-commerce growth. First, transaction cost reductions and improvement in product quality and service drive e-commerce growth. For example, ecommerce applications can run virtually around the clock with transactions originating from anywhere around the globe (Murthy 2004). Second, companies often embrace e-commerce as a reaction to competitors that have already embraced it. Finally, businesses are demanding e-commerce readiness from their suppliers. Clearly, these drivers are equally applicable in a global B2B e-commerce setting. As competition becomes increasingly global, transaction cost concerns, competitors investments into Internet technologies and demands of business partners would necessitate investments into Internet technologies to facilitate everything from data collection to competitive intelligence. In general, the larger the size of the company, the more likely it is that transaction cost improvements, competitors offerings and reactions, as well as suppliers demands drive the implementation of Internet technologies to a larger extent. Furthermore, while smaller companies will implement the Internet into their global B2B operations primarily to overcome size barriers, larger companies are more likely to use it strategically and incorporate it into a variety of their operations. Therefore, it can be reasoned that there will be some differences between larger versus smaller companies in terms of how they use the Internet for global B2B transactions. Others (e.g., Quelch and Klein 1996; Sotgiu and Ancarani 2004) suggest that the Internet affects markets by enhancing multi-channel pricing opportunities, changing the role of intermediaries, assisting market participants, and facilitating capital flows. At the same time, it benefits the organization internally by facilitating communication among operational units and providing better and more accurate flow of information. Finally, external benefits of the Internet would be seen in the areas of global product reach, niche marketing, and bypassing import restrictions, among other things. The implications of the above are that the growth of e-commerce will further increase organizations capabilities to shop globally for the lowest cost raw materials and supplies and enhance global partnerships with customers and suppliers by increasing value creation and delivery while simultaneously enhancing the ability of the firms to market products in the most effective manner to a global audience. In niche markets, e-commerce also makes it possible for small companies to compete against giants worldwide with relatively little investment (Cetron and Davies 2005). Wilson and Abel (2002) and Radovilsky and Hegde (2004) propose that the benefits of the Internet can be conceptualized along several dimensions: business enhancement and revenue enhancement with the two not mutually exclusive. Business enhancement applications include such things as improved communication with customers, suppliers and other stakeholders; information collection and dissemination; better reliability and control of customer orders; and building brand presence. Revenue enhancement applications focus upon the ecommerce aspect where revenue-generating e-transactions are emphasized. Wilson and Abel (2002) propose that the use of the Internet within a company would follow an evolutionary pathstarting with the information stage where information dissemination, delivery, and analysis are emphasized and finally reaching the ecommerce stage. The information and e-commerce stages should co-exist although the nature of products/services offered will determine the relative importance of each stage in a company. Ultimately, the true advantage of e-commerce lies not within the technology but in the application of the technology to the organizations strategic business initiatives (Hansen 2003). Some researchers have argued that there has been an unwarranted focus on cost reduction uses of the Internet as opposed to value creation uses. For example, Wise and Morrison (2000) question the contemporary wisdom of viewing the Internet primarily as an exchange model in theB2B sector and suggest that the real value of the Internet is not in the exchange aspect but in information and strategic partnerships management with an emphasis on providing solutions. They propose that in order to realize the real potential of the Internet, companies must incorporate its value dimension into their long term strategies. Murphy et al. (2003) found that companies that generate 5 percent or more of their revenues from the Internet consistently assign higher importance to the informational aspects than do others. Ozer (2004) has proposed that the use of the Internet in New Product Development is positively related to the determinants of new product success. Arguably, companies with higher revenues not only have more avenues to capitalize on the many

facets of the Internet but also have the ability and the requisite resources to do so. It is quite possible that in larger companies with higher revenues, the role of the Internet is more pervasive, deliberate, and hence more strategic for their B2B operations. Better resources and long-term planning capabilities should enable them to incorporate the Internet into a wider variety of their operations thereby facilitating business enhancement as well as revenue enhancement. However, in addition to company size, whether or not the company derives a significant percentage of its revenues from its global operations should also influence the role of the Internet on the companys operations. Companies that derive a significant percentage of their revenues from global operations are likely to use the Internet for a variety of activities relative to companies for whom their global revenues are a smaller percentage of their overall revenues. Accordingly, it is hypothesized that:

H2: While both smaller as well as larger companies will use the Internet for global B2B marketing, Internet applications for global B2B commerce will be more pervasive among larger companies with higher revenues relative to smaller and medium-sized companies. H3: Internet applications for global B2B commerce will be more pervasive among companies that derive a significant percentage of their revenues from their global B2B operations.

Constraints of Internet Use in Global B2B Marketing

There are many constraints which could potentially limit the use of the Internet by organizations in conducting their B2B marketing efforts. In a global setting, these constraints may be even more pronounced, posing a challenge to global e-commerce operations in the B2B sector. First, it is virtually impossible for one company within an industry to be an island within itself in establishing e-commerce operations. To a large degree, industry-wide information and business process standards must be established in order for companies to succeed in developing a global e-commerce presence (Temkin 2001). In order for these standards to evolve, MNCs must overcome fears related to the sharing of information and what can be considered sensitive data. Second, privacy concerns and security issues also remain constraints which could impede use of the Internet. According to Chakraborty, Lala and Warren (2004), Internet users have concerns over how websites acquire, use, and share identifiable information. Likewise, several researchers (i.e., Temkin 2001; Chakraborty, Lala and Warren 2004) point to the lack of security associated with the transmission of data and the storage of transactional information by a website as reasons why organizations could choose not to pursue Internet applications for B2Bcommerce, particularly in a global setting where standards of data protections may be quite different from their home countries. Third, even though MNCs can succeed in setting up and operating global e-commerce operations, they still may not be utilized due to basic business issues. In an examination of why so many forest industry dot.coms failed, Shook, Vlosky and Kallioranta (2004) found that while many companies rushed to set up Internet-based operations, customers did not use the services and product provided because: 1) they lacked human interaction; and 2) in many instances, the Internet operations did not allow customers to perform their business better, faster, and cheaper. In essence, too many companies focused on the technology versus the business process and the customer. Reinforcing the above, Zank and Vokurka (2003) conducted an empirical study of industrial distributors and manufacturers to determine what the major barriers to e-business were. Financial cost, lack of standards, technical immaturity, and unprepared trading partners were identified as the most likely barriers. Other reasons the authors identified as to why barriers exist in establishing e-commerce operations within firms include resistance from IT, resistance from manufacturers, resistance from distributors, and resistance from customers. In general, small firms, as compared to large firms, are more likely to face resource constraints (Dilts and Prough 1989). In addition to financial constraints, small companies are also more likely to lack managerial and technical expertise and prone to pursue less aggressive strategic options (Larson, Carr and Dhariwal 2005). As a result, smaller companies may be reluctant to pursue e-commerce initiatives particularly for their global operations. Conversely, it can be argued that larger companies are more likely to find ways to circumvent the various constraints in the expectation that these constraints are likely to diminish or even disappear over time. Additionally, it is possible that larger companies that have significant investments into their global operations may view these barriers as something they must overcome, and are unlikely to be deterred by them. Finally, from a resource perspective, larger companies should be able to overcome these constraints more effectively.

H4: Perception of barriers to implementation of Internet technologies for B2B marketing will differ as a function of the size and revenue of the firms. In summary, benefits of the Internet as far as its B2B uses are concerned include competitive intelligence, strategic partnership management, connectivity, community, transaction, and cost reduction. The barriers to

Internet implementation revolve around technology constraints, security issues and differences in business practices. However, whether the Internet is used primarily for short-term cost cutting strategies or as a tool to develop strategic partnerships in the B2Bmarketplace to offer superior value to the customer, the manner in which the Internet is likely to be used for global B2B transactions should be relatively similar to how it is used in domestic operations. Be it domestic or global businesses, the Internet has the potential to modify the competitive environment and all participants in the business market are likely to be affected by e-commerce, regardless of whether they are proactive about adoption or not (Pires and Aisbett 2003). Further, many uses of the Internet for the B2B sector might indeed be similar to its uses for the B2C sector. However, structural (e.g., regulatory and technological environment) and functional (e.g., technology availability and technological competence) factors in the global environment may influence the degree to which Internet technologies are used in global operations.

Methodology and Findings

A paper and pencil survey was developed after a review of the existing literature in the area. A pilot test with ten local firms suggested minor modifications in the wording of some statements to clarify terms used in the survey. The revised survey was further tested for face and content validity by two independent researchers. Overall, the survey contained twenty-eight statements anchored from strongly disagree to strongly agree, and an additional twenty questions about the firms global operations, geographic coverage, revenues, profits, etc. For the U.S. sample, a commercial mailing list was used to survey 1,030 international MNC executives who are directly responsible for global marketing operations. Respondents include international vice presidents, directors, export and import managers, and in a few instances, company owners. One hundred forty-one completed surveys were returned; two responses were discarded due to incomplete information for key variables. The final sample size of 139 constitutes a response rate of 13.4 percent for the U.S. Four hundred ninety-one surveys were sent to company executives in Australia using a commercial database that indicated the global B2B involvement of these firms. Fifty-eight usable responses were obtained from this sample resulting in a response rate of 11.8 percent. Descriptive analyses were conducted to assess sample characteristics and analyze other information regarding the MNCs global operations. Almost all firms had global revenues and all reported using the Internet to conduct at least some part of their global operations. To assess dimensionality of Internet use, data from the U.S. and Australia were combined and subjected to a factor analysis. Additionally, univariate tests and Analysis-ofVariance (ANOVA) tests were conducted for hypothesis testing.

Descriptive Results
All firms in the sample report had global operations, although the breadth of operations differed significantly across the two samples. In general, U.S. firms global operations are concentrated in Europe and Latin America, followed by Asia Pacific, Far East and South and East Asia. For Australian firms, Asia Pacific, South East Asia, and Far East are more prominent in terms of their global operations. Descriptive analyses suggest that in both samples, manufacturing firms dominate. For the U.S. sample, approximately 90 percent of the companies report having less than 50,000 employees; the remaining 10 percent have more than 50,000 employees with about 3 percent reporting more than 100,000 employees. Australian companies are much smaller with approximately 85 percent having less than 5,000 employees and 15 percent report employing between 5,000 to 50,000 people. It is worth noting that relative to the Australian sample, more firms in the U.S. sample derive a significant percentage of their revenues from global operations. For example, 44 percent of the firms in the U.S. sample derive more than 25 percent of their revenues from global sources whereas for the Australian firms this number is 21 percent. The same is true of profits with 36 percent of the U.S. firms reporting that profits from global operations comprise more than 25 percent of total profits; only 23 percent of Australian MNCs have comparable figures. Sixty percent of the U.S. companies report that all products available for sale in the U.S. are also available for sale in global markets; this number for the Australian sample is 55 percent. Thirty-eight percent of companies in the U.S. sample sell directly to their global customers, 15 percent use intermediaries, and 47 percent use a combination. These numbers are 35 percent, 12 percent, and 19 percent respectively for Australia. Interestingly, a majority of the respondents (82 percent in the U.S. and 90 percent in Australia) indicate that traditional channels would continue to remain important in global B2B operations despite increasing reliance of the MNCs on the Internet.

Commonly Reported Uses of the Internet in Global B2B Marketing

Table 1 describes the most commonly reported use of the Internet by Australian and U.S. MNCs. In the U.S., the Internet is used as a device to interact with global partners. It is also used as a tool to display merchandise, to collect information from global partners, as a marketing tool to project a uniform image of the company, and as a tool to inform partners about new product offerings. U.S. companies also report using the Internet as a product development tool in the global B2B context. Australian companies report using it to provide support and service for global partners. It is pertinent to mention that other uses of the Internet such as providing pricing details and order customization, processing, and fulfillment are also reported in the two samples although they do not constitute the most common uses. Eighteen percent of U.S. companies and about 26 percent of Australian companies note that the Internet is used to develop customized applications targeted especially at their global partners. These results suggest that while many of the uses of the Internet appear to be strictly uni-directional such as providing information and displaying merchandise (sometimes labeled brochureware), other uses such as information collection and creating strategic partnerships are characterized by interactivity and competitive intelligence. For example, approximately 42 percent of the U.S. respondents and 25 percent of the Australian respondents report that the Internet is used by their companies as an information collection and handling device for their global operations. Respondents in both samples also report transaction-centered uses such as order placement and processing even though these uses are less common than information-centered uses. Only 20 percent of the respondents in the U.S. sample and 10 percent of the respondents in Australia report that it is possible to customize and place an order using the company website. In comparing the responses of U.S. and Australian companies regarding the current and future roles of the Internet, results suggest that their strategies and views seem almost identical. Results indicate that not only are current uses of the Internet as reported by the two groups quite similar, their future expectations are almost identical as well. To illustrate, current uses of the Internet in global B2B operations of MNCs based in the two countries are more focused on business enhancement. For example, respondents in both the U.S. and Australian samples agree (mean values 3.71 and 3.58 on a 5-point Likert-type scale anchored from strongly disagree to strongly agree) that the Internet is used in their firms as a tool to enhance communication with global customers and suppliers (p =.439; F =.602). Further, respondents in both samples view the future uses of the Internet for global B2B operations to be more encompassing and sophisticated. Mean values for the statement Internet technologies have an important strategic role in our global business operations are 3.43 and 3.73 respectively for the U.S. and Australian samples (p = .065; F = 3.443). Similarly, respondents in both samples agree that Internet technologies will play a more important role in their future global B2B operations (mean values 3.75 and 3.88; p = .416; F = .665). In analyzing the results, it becomes evident that at the present stage, the most common uses of the Internet in global B2B operations are geared toward business enhancement and not specifically toward revenue enhancement, although they might contribute to cost savings (e.g., its product development use) and consequently, enhance the revenue stream for the company. Surprisingly, no systematic and statistically significant differences exist in how MNCs view the role of the Internet in their global business operations. Firms report very similar uses of the Internet for global operations irrespective of their size, profits, longevity, etc. Therefore, it is perhaps not surprising that the most commonly reported uses of the Internet in global B2B operations in the U.S. and Australia are quite similaronly their order of importance differs. It is plausible that the Internet has become such a ubiquitous phenomenon and its use has become so commonplace for routine operations, that it is hard to use it as a differentiating tool. It is also possible that the currently reported uses of the Internet add more value to an MNCs global operations and using the Internet for these activities results in the highest levels of efficiency. Finally, it is quite likely that the reported uses of the Internet in a global B2B setting are relatively easy to implement and unlikely to be thwarted by country-specific factors such as the regulatory climate or data security issues.

Underlying Dimensions of Internet Use in Global B2B Operations

A principal components analysis with a varimax rotation was conducted to assess whether there are common underlying dimensions of Internet use for B2B operations in the two countries. This analysis resulted in a 6factor solution explaining about 62 percent of the variance. A variance extraction of 60 percent or more is

considered satisfactory in the social sciences, particularly in exploratory research (Hair et al. 1998). Most factor loadings were above .50, indicating a clean factor structure and minimal problems with cross-loading. The six dimensions address either the facilitating aspects of the Internet or barriers (inhibitors) to the implementation of Internet. The study found that the facilitating aspects of the internet could be classified into the following five categories: future orientation, operational efficiency enhancement, marketing efficiency enhancement, partner relationship enhancement, and competitive intelligence . The barriers to the implementation of the Internet in global B2Boperations are partner-specific barriers. The next section discusses these dimensions, which are labeled facilitators and inhibitors. Theoretical justification for the extracted dimensions is also discussed. Table 2 contains information on factor loadings along with the Cronbachs alpha for each factor (scale). As previously noted, while research has not specifically addressed the uses of the Internet in international marketing operations of MNCs, the dimensions extracted through principal component analysis are quite similar to what one would expect to be the fundamental uses of the Internet in facilitating exchange in any setting. In that sense, these dimensions appear to be theoretically sound and validate the assertion that the uses of the Internet in global marketing parallel its uses in domestic markets although the potential may not have been fully utilized yet. Facilitators. The future orientation dimension of Internet usage encompasses those elements that indicate that the Internet is viewed not merely as a part of a companys current strategy but also as an important element of its future strategy. This dimension incorporates such things as the future (planned) use of the Internet for global B2B operations, planned investments into Internet technologies, expected level of usage of the Internet in companys future operations, and the Internets use to increase marketing efficiency. This dimension clearly suggests a deliberate role for the Internet in a companys overall global strategy. The fact that companies are investing in Internet technologies around the world suggests that it is being viewed as a long-term investment and not merely as a tool to generate short term cost savings. Indeed the Internet can be viewed as one of the few business tools that small firms can use as effectively as large firms to compete against rivals (Ramsey et al. 2004). Another well documented use of the Internet is its ability to enhance operational efficiency. Researchers have addressed the use of the Internet for enhancing operational efficiency within the context of its ability to make it easier to implement specific activities (Yip and Dempster 2005). To illustrate, the increased connectivity between partners, facilitated by the Internet, has accelerated the trend to increased outsourcing and collaboration throughout organizations supply chains to the point where these relationships can now be considered supply networks versus supply chains (Barnes, Mieczkowska, and Hinton 2003). Consistent with this view, the operational efficiency enhancement dimension in this study refers to those uses of the Internet which provide added value to a companys customers and partners by adding services such as on-line order placement, customized operations, etc. The specific activities that fall under this umbrella include using the Internet for placing orders, for payment and other transactions, for developing customized offerings for partners, for providing pricing information, and for informing global suppliers about company requirements. These uses enable a company to realize substantial costs savings by using the Internet for routine activities such as order placement, while at the same time creating high exit barriers for partners through customized offerings that would be hard to duplicate by competitors. Researchers have addressed how the Internet can be used as a marketing and public relations tool to reinforce company image worldwide and as a means to introduce prospective customers to specific company employees (Ellinger et al. 2003). Further, the company can use technological capabilities of the Internet to facilitate activities such as product development by involving relevant people from its worldwide facilities. In sum, this dimension emphasizes attracting and retaining customers by staying in constant touch with them (Mustaffa and Beaumont 2004). Not surprisingly, this study found the marketing and image dimension of Internet use in a global B2Bcontext to be consistent with what other studies have reported. This dimension of Internet use consists of items that tap into specific marketing functions such as the Internets use for communicating a firms product offerings, for informing partners about new product development, for projecting a uniform global image, and for merchandise display. By serving as a brochureware, the Internet can replace or supplement traditional means of information dissemination to various constituents. For example, information regarding product selection and service availability can easily be provided on-line to customers around the world. The fourth dimension, partner relationship enhancement, contains items that address the use of the Internet in developing long-term relationships with clients and suppliers. The items suggest that partner relationships can be viewed as a stepwise development process (Aldin, Brehmer, and Johansson 2004) and a two-way street. In fact, this dimension focuses upon service and support as well as sharing strategic intelligence with partners. An example of this activity can be found in Siemens operations; the company utilizes the Internet to simultaneously reduce its after-sales support (of customers machines) costs while guaranteeing the shortest response times in

the case of problems, a win-win situation for both partners (Wucherer 2006). In keeping with this conceptualization, this study found that items in this dimension address the use of the Internet to provide service and support, to resolve concerns and complaints, and to provide/share information with global partners. Perhaps the most profound impact of the Internet on competitive intelligence has been that because huge amounts of data are now widely accessible, customers are now more informed about their options and thus can negotiate with vendors on a more level playing field (Angel 2004). Therefore, it is not surprising that the final facilitator dimension labeled competitive intelligence is in keeping with what is often viewed as the most obvious potential for the Internetthat of collecting, disseminating, analyzing and using information gathered from various constituencies. It is labeled competitive intelligence because it involves information gathering, analysis and dissemination. It views information as a tool to provide superior value to global partners by offering services tailored to specific client needs while at the same time using it to keep track of competitors activities. The specific items that tap into this dimension view the Internet as an information collection medium, as a means to conduct strategic global research on clients and competitors, and as a tool to use this information to develop long term relationships with global partners. Inhibitors. Items that load on the factor labeled inhibitors suggest that the inhibitors to the implementation of the Internet in B2B global marketing are primarily partner-specific inhibitors. Previous research suggests that market-specific barriers such as security and privacy concerns are a concern for all organizations (Gao 2005) and these barriers did load on the same factor. However, the factor scores were lower than the norm, and thus they were not retained in the final analysis. On the other hand, partner-specific inhibitors are such things as lack of access to the Internet for global partners, the comfort level of global partners in using the Internet, and/or lack of confidence in the technology (Ratnasingam 2005). These factors may hinder the use of the Internet in a global B2B context because even though the MNC has the required competency to implement Internet-based services, the international partner may have limited or no access to the Internet, might not be comfortable using it, or skeptical of the technologys ability to deliver promised results. Further, research also suggests that there are considerable legal differences among the various markets in the world in terms of privacy issues. Companies located in those countries where the government keeps a close watch on businesses might be reluctant to use the Internet due to its perceived transparency. Similarly, privacy concerns about confidential data may also inhibit the use of the Internet for certain operations. A lesson to be learned is that designers should not attempt to use a one size fits all approach when developing web sites (Chakraborty, Prashant, and Warren 2005). Regardless, mean values for the inhibitors suggest that, in general, MNCs irrespective of their size and fields of operations, do not view these issues as significant in terms of their decisions to implement Internet technologies. It could be that MNCs are investing in Internet technologies in spite of these constraints or that the nature of Internet usage is such that these constraints do not pose a problem for the MNCs.

Hypothesis Testing
Hypotheses were tested using univariate tests and one-way Analysis-of-Variance (ANOVA). Bonferroni posthoc tests were used to conduct pair-wise comparisons. Instead of comparing individual scale items, factors obtained from the factor analysis were used for comparison purposes since they encompass the overall dimensions of Internet usage for MNCs global B2Boperations. H1: suggests that there are no differences between U.S. and Australian firms in terms of how they use the Internet for their global B2B operations. One-way ANOVA results indicate that except for the dimension labeled operational efficiency enhancement, there are indeed no significant differences between U.S. and Australian firms in how they use the Internet and what barriers they perceive in its use for global B2B operations. For the operational efficiency dimension, the difference is significant with U.S. firms more likely to use the Internet for such things as order fulfillment, providing pricing information, and offering customized applications relative to Australian firms (F(1,180)=4.136 p<.043). Thus, H1 is largely supported. Table 3 contains results of oneway ANOVA for H1. H2 suggests that company size and revenue have a significant effect on the use of Internet technologies for global B2B marketing decisions. In general, it is hypothesized that companies with higher revenues will encompass more formal Internet applications as compared to smaller companies. One-way ANOVA results suggest that there are indeed some differences between larger and smaller companies in terms of their Internet usage for global B2B operations. As shown in Table 4, the effects of revenue are significant [F(3,179)=4.413, p<.005; and F(3,173)=5.750, p<.001; and F(3,175) = 2.753, p<.044; and F(3,177)=3.116, p<.028) respectively] for four dimensions of Internet use for global B2B marketingoperational efficiency, marketing efficiency, relationship enhancement, and competitive intelligence.

Bonferroni post-hoc tests suggest that in general, larger companies are more likely to use the Internet to enhance operational efficiency, marketing efficiency, and use it as a competitive intelligence mechanism as compared to smaller and medium sized companies. The difference for relationship enhancement and competitive intelligence while significant is interestingly reversedsmall- and medium-sized companies are more prone to use it than larger companies. This finding seems consistent with what researchers have suggestedthat the Internet enables small companies to compete against giants worldwide with relatively little investment (Cetron and Davies 2005). Therefore, H2 is supported. No differences were found among MNCs as a function of the percentage of revenue they derive from their global sources. As shown in Table 5, the percentage of revenue that anMNC derives from its global operations has no effect on how the MNC will use the Internet for its global B2B marketing operations. Therefore, H3 is not supported. H4 proposes that the perception of barriers to implementation of Internet technologies for B2Bmarketing will differ as a function of size and revenues for the firms. Results suggest that there are no differences among MNCs in this area either [(F3, 166) = 1.486, p<.220)]. Overall, barriers to the implementation of the Internet are not viewed as significant by MNCs as evidenced by the mean value for the composite variable labeled inhibitors (2.7882). Therefore, H4 is not supported. Table 6 contains detailed results for H4.

Discussion and Implications

Based upon results of this study, it appears that the predominant model in the U.S. and Australia is the information-to-transaction path in terms of Internet use for global B2B marketing operations. Additionally, while the information-to-transaction model dominates in both countries, the U.S. MNCs appear to use the Internet much more heavily for collecting information from their global partners whereas Australian MNCs use it more heavily for providing service and support to their global partners. The most common uses for the Internet are characterized by an information-orientation and not specifically a transaction-orientation. Transaction-oriented uses of the Internet are certainly present in the two samples but to a far lesser extent than information-oriented uses. However, if the growth of this medium continues as most predictions suggest, it will not be long before it acquires the same status in global B2B operations as it has in domestic operations of numerous firms. Additionally, the uses of the Internet and views regarding the role of the Internet in global B2Bmarketing are remarkably similar in the two countries. It is evident that MNCs in the U.S. and Australia use the Internet for business enhancement, and to a lesser extent for revenue enhancement purposes, and are not particularly concerned about inhibitors such as the regulatory climate of a country. Further, contrary to what Wise and Morrison (2000) suggest, MNCs do not view Internets role in B2B marketing simply as a short-term cost reduction device. In particular, this study provides strong empirical support for the strategic role of the Internet. As discussed earlier, future orientation appears prominently in the results clearly establishing that companies in the two countries do indeed view the Internets role from a strategic long-term perspective. More importantly, future orientation does not differ as a function of company size or revenue, further attesting to the emerging view that companies, irrespective of their size, are embracing the Internet, at least in developed economies. Results of this study confirm that both U.S. and Australian MNCs are using the Internet to replace and/or supplement traditional marketing and business functions such as information delivery. They are also using it to develop innovative functions such as providing customized applications and product development using global partners. However, at the present time, the primary uses of the Internet seem to be at an evolutionary stage in global B2B settings. While the Internet has become a ubiquitous medium that both large and small companies have adopted for their global operations, it probably remains underutilized and has significantly more potential than what is being currently used. As discussed earlier, companies seem to be using the Internet in their global B2B operations more for business enhancement as compared to revenue enhancement, albeit both uses are gradually becoming complementary. It is important to note however, that even simple uses of the Internet such as information collection and dissemination encompass more than static informationthey point to the competitive intelligence approach to information, where information is used to deliver value and monitor competitive stance. Relationship enhancement uses such as designing systems and protocols to address client and vendor concerns point to the interactive role that the Internet is beginning to assume in global B2Boperations. It is not surprising that the predominant uses of the Internet involve the facilitation of information exchange between global partners. The ability of the Internet to enable synchronous as well as asynchronous communication makes it an ideal tool to disseminate and collect information and enhance operational efficiency. Further, the inherent interactivity of the Internet makes it a more effective device for business enhancement activities such as dissemination of tailored information on the company and its products to specific audiences.

The evolutionary nature of the Internet is also evidenced in this research. It has been suggested that companies typically follow a hierarchical path as they go through implementing electronic business strategy models. Some suggest that these strategies may be a function of such factors as the size and longevity of the firm (Quelch and Klein 1996; Sharma 2002). However, results of this study suggest that MNC revenue is the only factor that affects Internet use for global B2Bmarketing. Companies with higher revenues are using the Internet more strategicallythey appear to incorporate it into more functions ranging from competitive intelligence to improving marketing efficiency. At the same time, Internet usage for global B2B operations does not appear to be a function of how globally focused a company is. As noted earlier, percentage of revenues or profits that were derived from global operations did not affect to any significant degree how a company will use the Internet. It could be that the Internet has become such an integral part of todays competitive environment that whether or not a company is globally focused is immaterial. An important contribution of this research is in providing empirical evidence regarding the role of the Internet in global B2B marketing efforts of MNCs from two industrialized economies, which typically lead the way to more advanced innovations. These results also help to verify the claims of universalization of this medium by indicating that more than anything else, the Internet appears to be an integral part of MNCs global marketing strategies. The fact that large and small companies view the role of this medium as crucial to their growth and profitability attests to its long-term strategic significance in global marketing efforts. Additionally, results of this study demonstrate the various ways in which the Internet is being used in global marketing operations, and the limitations that companies must be aware of when deciding to implement it for their global operations. It also provides a framework for evaluating the value-added nature of the Internet at various stages of competitive strategy development for global applications. Future research should address these questions within the context of different countries and industries. In particular, it would be informative to assess whether MNCs from developing and newly emerging markets view the role of the Internet differently for their global B2B operations, and if so, what factors contribute to these differences. Similarly, it would be useful to assess other potentially more advanced uses of the Internet within global settings including those in developing and newly emerging markets.

Note
1. In this paper the term MNC is used to describe firms that have global operations irrespective of their size and revenues.

References
Aldin, N., P. Brehmer, and A. Johansson. 2004. Business development with electronic commerce: Refinement and repositioning. Business Process Management Journal 10(1):44-62. Angel, R. 2004. Sustaining profitable customer relationships requires real leadership. Ivey Business Journal Online 69(2). Australian Bureau of Statistics. 2005. Year Book Australia. AusStats. http://www.abs.gov.au, March. Barnes, D., S. Mieczkowska, and M. Hinton. 2003. Integrating operations and information strategy in ebusiness. European Management Journal 21(5):626-634. Berthon, P., M. Ewing, L. Pitt, and P. Naude. 2003. Understanding B2B and the web: The acceleration of coordination and motivation. Industrial Marketing Management 32:553-561. Bryan, M. 2005. Internet getting down to some serious business. The Australian Financial Review(April 21). Byrne, M. 2002. Beefing up B2B is government priority. The Australian Financial Review(September 17). Cetron, M. and O. Davies. 2005. Trends now shaping the future: economic, societal, and environmental trends. The Futurist 39(2):27-42.

Chakraborty, G., S. Prashant, and D. Warren. 2005. Understanding corporate B2B web sites effectiveness from North American and European perspective. Industrial Marketing Management34(5):420-429. Chakraborty, G., V. Lala, and D. L. Warren. 2004. What do customers consider important in B2Bwebsites? Journal of Advertising Research 43(1):50-61. Claycomb, C., K. Iyer, and R. Germain. 2005. Predicting the level of B2B e-commerce in industrial organizations. Industrial Marketing Management 34(3):221-234. Dilts, J.C. and G.E. Prough. 1989. Strategic options for environmental management: A comparative study of small vs. large enterprises. Journal of Small Business Management27(3):31-38. Dinlersoz, E.M. and R. Hernandez-Murillo. 2005. The diffusion of electronic business in the United States. Federal Reserve Bank of St. Louis Review 87(January):11-34. Dunt, E. S. and I.R. Harper. 2002. E-commerce and the Australian economy. The Economic Record 78(242): 327-342. Ellinger, A., D. Lynch, J. Andzullis, and R. Smith. 2003. B-to-B e-commerce: A content analytical assessment of motor carrier websites. Journal of Business Logistics 24(1):199-220. Emarketer. 2003. Worldwide B2B revenues to pass one trillion. Report reviewed by NUA Internet Surveys, http://www.nua.ie/survey, April 1. Eng, T. 2004. The role of e-marketplaces in supply chain management. Industrial Marketing Management 33:97-105. Gao, J. 2005. E-commerce issues in Australian manufacturing: A newspaper medium perspective. Journal of Electronic Commerce in Organizations 3(4):20-41. Grey, W., T. Olavson, and D. Shi. 2005. The role of e-marketplaces in relationship-based supply chains: A survey. IBM Systems Journal 44(March):109-123. Hair, J., R.E. Anderson, R.L. Tatham, and W.C. Black. 1998. Multivariate Data Analysis. Upper Saddle River: Prentice Hall. Hansen, F. 2003. Global e-commerce growth. Business Credit 105(9):58-60. IDC Research. 2001. Internet and e-business have impacted Australian businesses. October 24. http://www.idec.com.au/ebusiness trends/ebt20011024.htm. IDC Research. 2002. Internet penetration and usage within the Australian market continues to mature. February. http://www.idec.com.au/ebusiness trends/ebt20022202.htm. Internet World Stats. 2005. Internet usage and population in Oceania. http://www.internetworldstats.com/stats6.htm. Internet World Stats. 2005. Internet usage statistics The big picture. http://www.internetworldstats.com/stats.htm. Kaefer, F. 2004. Business technology complementarities: Impacts of the presence and strategic timing of ERP on B2B e-commerce technology efficiencies (management of corporates). Omega32(October):395-405. Kelly, M. 2005. A wide net catches more customers. Travel Week, May 11. Larson, P.D., P. Carr, and K.S. Dhariwal. 2005. SCM involving small versus large suppliers: Relational exchange and electronic communication media. Journal of Supply Chain Management41(1).

Leek, S., P.W. Turnbull, and P. Naud. 2003. How is information technology affecting business relationships? Results from a UK survey. Industrial Marketing Management 32:119-126. Leu, Y., Theophilus B. A. Addo, and M. Chen. 2003. B2B e-commerce in the United States, Europe, and Japan: A comparative study. Journal of Academy of Business and Economics 3(March). Lichtenthal, J.D. and S. Eliaz. 2003. Internet integration in business marketing tactics. Industrial Marketing Management 32:3-13. Murphy, P.R., R.F. Poist, P.M. Lynagh, and W.F. Grazer. 2003. An analysis of select web site practices among supply chain participants. Industrial Marketing Management 32:243-250. Murthy, U.S. 2004. An analysis of the effects of continuous monitoring controls on e-commerce system performance. Journal of Information Systems 18(September):29-47. Mustaffa, S. and N. Beaumont. 2004. The effect of electronic commerce on small Australian enterprises. Technovation 24(2):85-94. Ozer, M. 2004. The role of the Inter net in new product performance: A conceptual investigation. Industrial Marketing Management 33:355-369. Pires, G. and J. Aisbett. 2003. The relationship between technology adoption and strategy in business-tobusiness markets: The case of e-commerce. Industrial Marketing Management32:291-300. Quelch, J.A. and L.R. Klein. 1996. The Internet and international marketing. Sloan Management Review Spring:60-75. Radovilsky, Z. and V.G. Hegde. 2004. Factors influencing e-commerce implementation: Analysis of survey results. Journal of Academy of Business and Economics 4(March). Ramsey, E., P. Ibbotson, J. Bell, and B. Gray. 2004. A projectives perspective of international eservices. Qualitative Market Research 7(1):34-47. Ratnasingam, P. 2005. E-commerce relationships: The impact of trust on relationship continuity. International Journal of Commerce and Management (March 22). Schifrin, M. 2004. B2Bs back. Best of the Web, www.forbes.com, October. Sharma, A. 2002. Trends in Internet-based business-to-business marketing. Industrial Marketing Management 31:77-84. Shook, S.R., R.P. Vlosky, and S.M. Kallioranta. 2004. Why did forest industry dot.coms fail? Forest Products Journal 54(10):35-40. Sotgiu, F. and F. Ancarani. 2004. Exploiting the opportunities of Internet and multi-channel pricing: An exploratory research. Journal of Product & Brand Management 13:125-136. Temkin, B. 2001. B2B success going beyond e-marketplaces. Supply Chain Management Review (Global Supplement) (July-August):18-22. Wilson S. and I. Abel. 2002. So you want to get involved in e-commerce. Industrial Marketing Management 31:85-94. Wise, R. and D. Morrison. 2000. Beyond the exchange: The future of B2B. Harvard Business Review (November-December):86-96.

Wucherer, K. 2006. Business partnering A driving force for innovation. Industrial Marketing Management 35(1):91-102. Xu, K., T. Wilkinson, and L.E. Brouthers. 2002. The dark side of international e-commerce: Logistics. Marketing Management Journal 12(2):123-134. Yip, G. and A Dempster 2005. Using the Internet to enhance global strategy. European Management Journal 23(1):1-13. Zank, G. and R.J. Vokurka. 2003. The Internet: Motivations, deterrents, and impact on supply chain relationships. S.A.M. Advanced Management Journal 68(2):33-40