Consumer perceived risk, risk reduction strategies and transaction intentions in online marketplaces

Even though online commerce has garnered vast academic interest during the recent years, theoretical grounds for consumer behavior online still remains ambiguous. Despite the globally rapid growth of online commerce, only a fraction of Internet browsers end up purchasing goods online. This is argued to be caused by the intangible and distant nature of the Internet, causing overwhelming perceived risks for consumers and negatively affecting transaction intentions. To combat perceived risks, consumers may actively or passively seek to relieve those risks to tolerable level. These risk reduction strategies refer to both institutional mechanisms as well as consumer risk reduction strategies. The objective of this thesis is to provide further understanding upon the relationships between consumer perceived risk, risk reduction strategies and transaction intentions in online marketplaces. To serve the objectives of the present thesis, a quantitative approach was chosen as the method for conducting empirical research. The data was collected with an online survey through discussion board, using a random sample approach. The proposed research model was examined with a set of hierarchical regression analyses. Results revealed several direct relationships as well as moderating interaction effects. The key finding of this thesis is that institutional risk reduction mechanisms significantly contribute to consumer perceived risks. These mechanisms have the potential to reduce perceived risks, and therefore may stimulate transaction intentions. Additionally, it was observed that risk reduction strategies moderate the relationship between intermediary provided risk relievers, consumer perceived risks and transaction intentions. Retailer related risk reduction strategies were also shown to enforce the effectiveness of payment methods; however feedback and monitoring mechanism was shown to have a diminishing effect of perceived risk only when consumers did not rely on product related risk reduction strategies. The present thesis also illustrates the importance of effective information search, as those consumers are more willing to transact as the perceived risks become less significant. For managerial purposes, the importance of well-functioning institutional mechanisms cannot be emphasized enough.

BUSINESS NETWORKS IN E-COMMERCE INTERNATIONALIZATION –Two Finnish Companies Targeting Russia

With the proliferation of Internet, online shopping has become an increasingly essential part of global economy and thus, increasingly important field of research. While the internationalization process of a company has for long been in the focus of academic research, internationalization of e-commerce is a much newer field of study. The earlier empirical research has amply pointed out the difficulties of traditional internationalization models to explain the internationalization process of e-commerce companies. Conversely, business networks have been argued to play a major role in the e-commerce internationalization. The purpose of this study is to study how business networks influence the internationalization process of e-commerce companies. Conducted as a case study, this research studies the internationalization process of two Finnish e-commerce companies, Hong Kong and Hifi Studio, into possibly one of the most booming online markets - Russia. The empirical findings of the study concur with the earlier literature. The observed internationalization process differs from the assumptions of traditional international business models, and business networks are found influential for the process. However, the behavior of the two studied organizations is observed more independent than the network view to internationalization presumes. The trigger to internationalize rises from within the organizations and market potential is the primary explanation for selection of target markets. No network relationships were found to have an effect on foreign market selection, nor selection of mode of operations. This study indicates that exploring foreign markets is actually about investing in specific relationships within a business network, rather than overcoming economic, institutional, and cultural barriers. Companies utilize a wide array of relationships in their internationalization process and may effectively overcome disadvantages of operating in a foreign market by adopting partnerships with correct partners. However, building and maintaining operational business relationships is a demanding process, and organizations should prefer quality over quantity in their partner selection. Moreover, relationships where the focal party possess significant influence and leverage over other actor should be favored. Lastly, relationships need to be continuously evaluated and assessed in comparison with strategic business goals. Ultimately, e-commerce can be considered a new, low-risk, cost-effective, and relationship-oriented internationalization method, suitable especially in volatile market conditions as Russia today. This revolutionary new mode of international business activity calls for more profound focus of business managers and academia alike, as its weight on global trade continues to grow.

Key factors affecting purchase intention in Russian online context

Russian e-commerce has drawn a lot of attention in academic publications as well as in public media lately. The market is growing with a speed of rocket offering companies enormous business opportunities. However, combination of Russian culture, consumer online purchasing and decision-making process forms a subject yet completely unknown. From international online business perspective it is vital for companies to know how a culture affects consumer’s purchase decision and what are the key elements that need to be modified in order to successfully expand online operations to Russian market. Here, the main purpose is to define the key factors affecting Russian consumer’s online purchase intention. In order to answer the main research question, firstly the role of culture in purchase intention context is researched. Secondly, focus is drawn to the factors that affect online purchase intention. Lastly, it is researched how Russian culture is affecting e-commerce attributes modification. The objective is not only to expand the theoretical understanding of the subject but also to provide companies with a clear vision on how the online operations should be conducted in Russian online market. Ranganathan’s and Jha’s conceptual framework was chosen as a ground theory in this study. Here, three main categories Computer Self-Efficacy and Past Online Experience, Website Quality and Costumer Concerns form basis for the study. Various articles and academic literature supplemented this theoretical approach. Qualitative research method was adapted and the study was conducted through five expert interviews. As a conclusion it can be stated that culture forms a ground for entire purchase decision-making process in online context. Results from the interviews were grouped according to main three theoretic categories and placed with Ranganathan’s and Jha’s original framework. This formed a new theoretical framework that defines diverse factors affecting specifically Russian consumer’s online purchase intention. This study suggests that following factors need to be taking into serious consideration in Russian online context: photography style, detailed product and company information, colors, language, product variety, reviews, recommendations, strong social media presence, fast check out and minimalistic order information, counterfeit fear, cash on delivery payment, training and guidance, extensive customer service, consumers’ insecurity, inexperience, high interest for technology and their individualistic personality.

Mobile E-commerce business model – A value web based approach to business models in mobile gaming industry

Tämän tutkimuksen tavoitteena oli tutkia langattomien internet palveluiden arvoverkkoa ja liiketoimintamalleja. Tutkimus oli luonteeltaan kvalitatiivinen ja siinä käytettiin strategiana konstruktiivista case-tutkimusta. Esimerkkipalveluna oli Treasure Hunters matkapuhelinpeli. Tutkimus muodostui teoreettisesta ja empiirisestä osasta. Teoriaosassa liitettiin innovaatio, liiketoimintamallit ja arvoverkko käsitteellisesti toisiinsa, sekä luotiin perusta liiketoimintamallien kehittämiselle. Empiirisessä osassa keskityttiin ensin liiketoimintamallien luomiseen kehitettyjen innovaatioiden pohjalta. Lopuksi pyrittiin määrittämään arvoverkko palvelun toteuttamiseksi. Tutkimusmenetelminä käytettiin innovaatiosessiota, haastatteluja ja lomakekyselyä. Tulosten pohjalta muodostettiin useita liiketoimintakonsepteja sekä kuvaus arvoverkon perusmallista langattomille peleille. Loppupäätelmänä todettiin että langattomat palvelut vaativat toteutuakseen useista toimijoista koostuvan arvoverkon.

Validation of plant dynamic model by online and laboratory measurements – a tool to predict online COD loads out of production of mechanical printing papers

COD discharges out of processes have increased in line with elevating brightness demands for mechanical pulp and papers. The share of lignin-like substances in COD discharges is on average 75%. In this thesis, a plant dynamic model was created and validated as a means to predict COD loading and discharges out of a mill. The assays were carried out in one paper mill integrate producing mechanical printing papers. The objective in the modeling of plant dynamics was to predict day averages of COD load and discharges out of mills. This means that online data, like 1) the level of large storage towers of pulp and white water 2) pulp dosages, 3) production rates and 4) internal white water flows and discharges were used to create transients into the balances of solids and white water, referred to as “plant dynamics”. A conversion coefficient was verified between TOC and COD. The conversion coefficient was used for predicting the flows from TOC to COD to the waste water treatment plant. The COD load was modeled with similar uncertainty as in reference TOC sampling. The water balance of waste water treatment was validated by the reference concentration of COD. The difference of COD predictions against references was within the same deviation of TOC-predictions. The modeled yield losses and retention values of TOC in pulping and bleaching processes and the modeled fixing of colloidal TOC to solids between the pulping plant and the aeration basin in the waste water treatment plant were similar to references presented in literature. The valid water balances of the waste water treatment plant and the reduction model of lignin-like substances produced a valid prediction of COD discharges out of the mill. A 30% increase in the release of lignin-like substances in the form of production problems was observed in pulping and bleaching processes. The same increase was observed in COD discharges out of waste water treatment. In the prediction of annual COD discharge, it was noticed that the reduction of lignin has a wide deviation from year to year and from one mill to another. This made it difficult to compare the parameters of COD discharges validated in plant dynamic simulation with another mill producing mechanical printing papers. However, a trend of moving from unbleached towards high-brightness TMP in COD discharges was valid.