Demand Chain Strategy and Chinese Firm Performance

Abstract

The purpose of this research is to enhance the extant understanding of the information technology (IT)-strategy relationship. The study aims to test the robustness of the relationships among the concepts of IT analytic capability, demand chain strategy, and firm performance besides investigating the interaction effects of product life cycle (PLC) management on the IT-strategy relationship. Based on the resource-based view (RBV) of the firm and the research paradigm of “capability-strategy-performance,” 300 Chinese fashion firms were surveyed to collect data by Demand Chain Research Institute of Shanghai University. In order to test the hypothetical relationship in the conceptual model, valid questionnaires from 185 firms were collected in this study, and the effective rate reached 61.7%. Findings suggest that IT analytic capability associates positively with demand chain strategy, and PLC plays a moderation role between IT analytic capability and demand chain strategy. The findings further support the link between demand chain strategy and better firm performance. This study contributes to existing information systems and operation management literature by the above effects in the retail context. Overall, these results reflect recent business and transformation changes from supply chain strategy to demand chain strategy for the Chinese fashion industry.