Impact of Financial and Nonfinancial Constructs on Customer Lifetime Value (CLV): U.S. Retailer’s Perspective

Purpose: This customer lifetime value (CLV) study developed and refined an instrument to measure CLV from a retailer’s perspective using both financial and nonfinancial constructs. Design/methodology/approach: The authors created scale items to measure the financial (monetary value and marketing costs) and nonfinancial constructs (trust, loyalty, purchase frequency, recency, and churn rate). They assessed composite reliability as well as discriminant and convergent validity. Findings: A varimax rotation indicated strong items for trust and recency under the nonfinancial factors as well as monetary value and marketing costs under the financial factors. Additionally, the measurement model indicated a strong model fit. Practical implications: The findings reinforce the notion of using financial factors to determine CLV. However, nonfinancial factors are also relevant for explaining CLV. These findings fundamentally shift the argument about the determinants of CLV as well as open the door for further research about the financial factors of CLV. Originality: This is the first study to create scale items for measuring the financial and nonfinancial constructs of CLV. The research provides useful theoretical and managerial insights regarding the consideration of nonfinancial factors for refocusing marketing and retailing efforts toward consumers. The study findings reinforce the notion that all customers are not equally valuable

Operational Optimality and Firm Performance

It is common view that optimality refers to a state where no further improvement is possible. This idea of optimality is commonly referred to as Pareto optimality in microeconomics. We define operational optimality as the state of operations wherein any change in the operational performance parameters reduces operational performance. Firms that have optimal operations should exhibit better performance than sub-optimal firms. Using panel data for manufacturing firms, the relationship between operational optimality and firms’ performance is explored. The dissertation consists of two interconnected essays that explore different aspects of this relationship. The first study described in chapter two explores whether operational optimality has a positive relationship with manufacturing firms’ financial and market performance. Operational optimality is measured as the individual elasticity of six factors of production/ operational parameters (Capital Expenditure, Research & Development (R&D), Labor, Inventory Intensity, Capacity Utilization, and Production Variability) with respect to operating performance. Using these six, a combined measure of operational elasticity was also generated. The relationship between each of the seven elasticities and firm financial performance (measured as Return On Sales (ROS) and Return On Assets (ROA)) and market performance (measured as revenue growth) was analyzed. The results suggest that operational optimality does not result in better financial and market performance in manufacturing firms. In the second study described in chapter three, this counter-intuitive result is further explored. Using a split sample consisting of market dominant and bankrupt firms, the probability of market dominance as a function of operational optimality is further studied. For this study, the operational parameters were limited to inventory intensity, capacity utilization, and production variability. The study found that successful manufacturing firms tend to operate in regions of operational sub-optimality with regards to inventory levels and production variability over time. Additionally, the region of sub-optimality that they operate in is related to the level of environmental uncertainty and changes over time

Role of Communication and Collaboration in the Relationship between Integration and Logistics and Firm Performance

Goals and Objectives The objectives of the research are to: -Carry out a review of literature to understand the current state of research on the concept of integration in a firm and compile a list of frameworks that have been proposed to explain its effects on logistics and firm performance -Propose a framework on integration in logistics management that links it to logistics and firm performance based on the review of literature -Test the proposed framework based on secondary data using factor analysis Theoretical Framework -The study tries to link integration with logistics performance and firm performance. The role of communication as a moderating variable will also be studied. - It is envisioned that Transaction Cost Economics will be able to explain the possibility of collaboration and communication affecting integration. Methodology/Data A literature review will be used to review current frameworks that link integration with logistics performance and firm performance. The proposed framework will be tested using factor analysis. The test will be carried out on secondary data. Educational/Field Significance Integration is a concept that has been studied in logistics from multiple perspectives. The compilation of frameworks that address integration and its relation to firm performance will be a contribution to the field. Proposed Significance/Outcomes The role of communication within the constructs of integration and logistics and firm performance will be studied along with the role of supplier and customer collaboratio

An Integrated Index for Triple Bottom Line Performance of the Big Three Firms in Logistics and Shipping Services Industry

This research investigates a crucial aspect of managing sustainability in organizations, i.e., sustainability performance measurement, with a focus on developing a methodology for jointly measuring and comparing the sustainability performance of companies in a particular industry. We utilize two complementary methodologies – linear aggregation and data envelopment analysis, to create a unique index consisting of sustainability indicators. The method is demonstrated using three major firms in the logistics and shipping services industry. The mathematical models formulated in this research are flexible to include or exclude any number of sustainability indicators and provide an easy-to-comprehend tool for the managers to evaluate their sustainability efforts over a period of time. This research contributes to practice by aligning social and environmental indicators on the same scale and comparing the performance of companies using the ratios of these indicators

The Impact of Servitization on Firm Performance: A Service Dominant (S-D) Orientation Perspective

Servitization (i.e., integrating service design, strategy, delivery, and processes) as a manufacturing firm strategy has produced ambiguous findings in its relationship with firm performance. Thus, we propose a service dominant (S-D) orientation approach to help firms develop capabilities needed to cover various methods of customer value co-creation to improve performance

Study of Effects of IT Capability on Logistics Performance: A Mediation Approach

We sought to investigate if an indirect relationship exists between Information Technology capability (IT) and Logistics Performance (LP) through Customer Collaboration (CC) and Process Integration (PI). Using 221 observations, our structural equation model results confirmed the mediating effects of CC and PI on the relationship between IT and LP

The Moderating Effect of Firm Size on the Relationship Between Customer Collaboration, IT Capability, and Logistics Performance

This study explores the relationship among customer collaboration, information technology capabilities, and logistics performance in sustaining a firm’s competitive advantage. We further seek to understand whether the size of the focal firm moderates the relationship between 1) customer collaboration and logistics performance, and 2) IT capability and logistics performance