The online retailing decision: Development and testing of the SIRFS model
A firm determines strategy based on a combination of organizational characteristics, perceived needs and opportunities, and environmental factors. This study identified and examined the factors and conditions that influence Internet strategy decisions, specifically the decision of consumer goods manufacturers and retailers, to sell or not sell their products online to consumers. The author integrated a broad literature review and a grounded theory-building process to develop a model of the important factors that influenced the Internet retailing decisions among large, nationally recognized manufacturers and retailers of durable consumer goods in seven different industries. The predictive powers of the SIRFS (Strategic Internet Retail Factor Synthesis) model was then refined and tested through path analysis using data captured from interviews with 64 senior managers responsible for Internet strategy decisions in the firms sampled. As predicted, a very strong relationship was found among the outcome variables in the model. Specifically, there were strong correlations between the length of time a firm operated a web site relative to the amount of time they operated an online store, the type of goods (mainstream versus accessories) they sold online and the percentage of products they made available online. The variables found to influence a firm's Internet retailing decision included strategic importance, the involvement of a champion, strategic consensus among all members of the organization, channel member relationships, direct marketing experience, product suitability, the metrics used to measure web site success, consumer interest and competitive influence. In addition to its scholarly contributions, the SIRFS model provides insight for strategic planners who must allocate resources, define strategy and measure outcomes. It helps manufacturers and retailers determine if, when, and how extensive their involvement in Internet retailing should be.
