The Role of Regional Off-line Business Fundamentals in the Success of On-line Business

지역적 off-line 산업기반과 on-line 벤처기업 성공의 연관성

The advantages of implementing a virtual channel can be derived from the notion of the 'death of distance' that would result from electronic commerce. According to this view, the internet was going to make distance irrelevant, in that firms would no longer need to establish a physical presence in a geographical location in order to do business there. However, on-line firms selling physical products could take advantages of presence in the related off-line(brick and mortar) industrial area. This paper developed a conceptual framework that highlights the various types of synergies by location on-line businesses in the related off-line industrial area. Using data from 96 on-line ventures selling physical products, factor analysis was used to figuring out six synergies including improved customer trust, value-added service, cost savings, personnel and organizational efficiency, sharing products and customer information, relationship with suppliers, and relationship with local government. The six empirically derived critical synergy factors were then used to examine how they improve performance of the on-line ventures measured by Balanced Scorecard(BSC). According to lthe results, we concluded that the on-line firms selling physical products can take advantages of presence in the related off-line industrial area.