International Journal of Information Management 29 (2009) 488496

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International Journal of Information Management

journal homepage: www.elsevier.com/locate/ijinfomgt

A study on customer, supplier, and competitor knowledge using the knowledge chain model
Shu-Mei Tseng
Department of Information Management, I-Shou University, No. 1, Sec. 1, Syuecheng Rd., Dashu Township, Kaohsiung County 840, Taiwan, ROC

a r t i c l e
Article history:

i n f o

a b s t r a c t
In the new economy, rms are willing to pay abundant premiums for the signicant entrepreneurial capacities of management and staff in order to develop, build, protect, transfer and integrate knowledge. Although companies and scholars have indeed recognized the value of knowledge management, they have not generally included customer, supplier, and competitor knowledge, preferring to emphasize the process of knowledge acquisition and sharing that takes place within organizations. Thus, this study proposes a conceptual framework, and uses interpretative case studies, to explore how an enterprise obtains the three types of external knowledge. Moreover, through the following ve primary activities acquisition, selection, generation, internalization, and externalization this study will illustrate how enterprises apply the internal knowledge chain to transform their customer, supplier, and competitor knowledge to enhance enterprise competitiveness. 2009 Elsevier Ltd. All rights reserved.

Keywords: Knowledge chain Customer knowledge Supplier knowledge Competitor knowledge

1. Introduction With the rapid changes and pressure of global competition, the business environment has become much more complicated. Thus, to survive, enterprises must maintain and utilize internal and external knowledge. Colin and Magda (2002) believed that building enterprise value originated from intangible assets, such as knowledge, while Quinn (1993) thought that three-quarters of the value added in many corporations came from specic knowledge property rights. Drucker (1985) suggested that knowledge would replace machinery, equipment, capital, raw material and labor to become the most important factor for the productive element in industry. Nonaka, Toyama, and Konno (2000) assumed that the competitive advantages of successful Japanese enterprises were mostly derived from knowledge creation and constant innovation. Thus, for enterprises knowledge is not only a core competence to cultivate, but also a key element for survival in the marketplace. Consequently, effective knowledge management (KM) has become a crucial issue for businesses (Renzl, 2008), the basic foundation for creating and sustaining their core competence capabilities. Organizations are now facing both global and local competitions, and thus the top managers should review the internal and external environments in order to understand an enterprises strengths, weaknesses, opportunities, and threats in formulating their KM strategy (Ndlela & du Toit, 2001). In other words,

entrepreneurial leaders must be able to make good decisions based on limited information in order to develop dynamic core capabilities to better recognize and exploit every business opportunity (Wakeeld, 2005). Nevertheless, we do not yet fully understand how managers absorb information and transform it into their own knowledge during their interactions with the external environment. Thus, this study proposes a conceptual framework to investigate how enterprises apply internal knowledge chain activities to gain external knowledge, as well as how they lter, condense, transform their knowledge to enhance sustainable competitive advantages (Chen & Hsiang, 2007). Moreover, through utilizing a knowledge chain model, the impact of customer, supplier, and competitor knowledge on the rms knowledge are analyzed and demonstrated by means of case studies. The remainder of the paper is organized as follows: Section 2 presents the literature review, while Section 3 establishes and proposes the conceptual framework. Section 4 outlines the research methodology, and Sections 5 and 6 illustrate a detailed discussion of the case studies ndings about customer, supplier, and competitor knowledge, and knowledge chain activities. Finally, Section 7 summarizes and concludes the research ndings. 2. Literature review 2.1. Customer knowledge Rowley (2002) assumed that customer knowledge is an essential intangible asset for any enterprise, because it enables them to regroup and create value. Garca-murillo and Annabi (2002)

Tel.: +886 7 6577711x6574; fax: +886 7 6577056. E-mail address: y97576@isu.edu.tw. 0268-4012/$ see front matter 2009 Elsevier Ltd. All rights reserved. doi:10.1016/j.ijinfomgt.2009.05.001

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pointed out that workers should seize every opportunity for interaction with customers so that they can enrich their customer knowledge database. Sheth, Sisodia, and Sharma (2000) indicated that in the 21st century marketing, which used to focus on mass marketing and market segmentation, would transform to a emphasize customer-centered approach. Consequently, an enterprise can gain a thorough understanding of their customers and be more able to fulll their demands. It is thus important a business to build up an extensive knowledge database, as well as to develop the necessary mechanisms for acquisition, control, and publication of the information it contains (Teece, 2000). Alba and Hutchinson (1987) considered that customer knowledge could be divided into two parts: (1) familiarity, meaning the amount of experience accumulated by the customers about the products; and (2) expertise, showing the capability of the customer to perform tasks by operating the product. When the customers are more familiar with the service, they will have more condence or ability to examine the service quality, and then start having expectations about future service quality. Dave (2000) also pointed out that customer knowledge could be divided into familiarity and experience, which both play important roles in determining customers expectations towards service quality, and Charlene (2000) also supported the idea that familiarity affects customer expectations. Hence, if customers possess knowledge related to the product and service, it will guide or even change their ways of thinking, communicating and behaving. They will also store this knowledge as the standards for evaluating future quality. Thus, in order to strengthen customer relationships, an enterprise should enhance the quality of customer information so that it can gain a much more reliable picture of customer behavior. Furthermore, Wayland and Cole (1997) saw customer knowledge management as a series of effective operations for gaining, developing and sustaining benecial combinations of customer knowledge and experience. However, only conducting data accumulation and quantitative analyses will not lead to sufcient understanding, because gathering information is merely the initial step of constructing customer knowledge. In other words, customer knowledge management refers to how an enterprise deals with different explicit and implicit matters in customer information, and then extracts and transforms this into strategies which can support its operations and marketing, as well as develop enterprise knowledge value. Therefore, increased customer interaction is helpful to better absorb customer knowledge. It can also be inferred that both customer and enterprise knowledge have been through the same processes of transforming data into information, and then transforming this into valuable knowledge. Every time we mention KM, the focus is put on internal issues, such as knowledge assembly and sharing, but customer knowledge is focused externally, on the market and customers. Therefore, when an enterprise is collecting customers personal information, trading data, preferences, and so on, this information should be systematically organized into communicative customer knowledge (Campbell, 2003). However, it should be noted that even though the importance of customer knowledge in process of product innovation has long been recognized, its potential has not been widely researched. 2.2. Supplier knowledge Gemunden, Ritter, and Heydebreck (1996) indicated that innovative success was obviously connected to a technological network, as well as relationships with the customers, suppliers and others. Grover and Davenport (2001) also assumed that the most signicant knowledge is the tacit knowledge which lies in the conversations and interactions with managers, customers, and suppliers. Nonaka et al. (2000) presented a knowledge creation model

based on dynamic interaction among customers, suppliers and the company, and assumed that the company can integrate products, markets, and mental models to create knowledge. They also emphasized exploiting the direct conversations that an enterprise has with its customers and suppliers in order to discover new knowledge from them. Therefore, there should be a reliable channel for all parties in a business can exchange their thoughts and communicate with each other so that an enterprise can more effectively gain the tacit knowledge thus exchanged. Yeniyurt, Cavusgil, and Hult (2005) noted that supplier knowledge is used to assist the decision-making process by linking customer demands with supplier capabilities, so that inventory costs can be minimized. Chen and Su (2006) discovered naturally interrelated, complementary or dependent constituents in company knowledge, including product, customer, supplier, industry, operations and competitor knowledge, of which product and customer knowledge are the most crucial and intricate elements. To provide attractive products that fulll or exceed customer expectations, companies should know the appropriate customer segment that they are targeting. Moreover, customers are naturally curious about products provided by other companies, so they will evaluate the relative merits of the products they want to purchase by considering others that are available. Consequently, a company should apply the right operation tactics, supplier chain management and competition strategies in order to offer the right product to customers (Zablah, Bellenger, & Johnston, 2004). This suggests that customer knowledge management must be conducted along with other components of company knowledge in order to exploit the synergies inherent in any organizational collaboration. Supplier participation in the initial stages of developing a new product has a signicant inuence on the successful outcome of the project. In the initial stage of product development, if it is possible to apply the relevant marketing strategies to ensure the opinions of the customers and suppliers are considered by the enterprise, then it is also possible to be involved in the design process in order to enhance the product development and reduce the time required for research (Choy, Tan, & Chan, 2007). The suppliers knowledge of design and manufacturing should thus be utilized by any rm that seeks to ensure the competitive advantage of a new product. Therefore, similar to that derived from customers, supplier knowledge should be included in the market knowledge. This knowledge is expected to have a positive impact on rm performance by constituting a competitive advantage in the marketplace (Barney, 1991). 2.3. Competitor knowledge For a global industry, the competitive position of a country relies on the relative strengths and weakness of other countries (Porter, 1980; Zou & Cavusgil, 2002). Furthermore, organizations that wish to set out a global strategy are faced with both foreign and local competition. However, companies often benet from competitors as sources for benchmarking and transfers of best practices (Drew, 1997). Hence, competitor knowledge is composed of the key capabilities of rival rms. Moreover, the amount, timeliness and accuracy of competitor intelligence determine the ability of one company to respond to competitive moves on a global scale. Similar to customer knowledge competence, competitor knowledge competence means the ability to acquire, interpret and integrate information about the global competitive environment. Competitor knowledge is therefore one of the market knowledge competencies required in order to achieve success in the marketplace, on that that is expected to have a signicant positive impact on company performance (Kohli & Jaworski, 1990). Therefore, managers should have thorough understanding about their competitors, as well as staying vigilant to identify both threats and opportunities in the marketplace.

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The current competitive environment is characterized more sources of information, rapidly changing technologies, new management practices, more competitors, and shorter product life cyclesall of which highlight the importance of organizational knowledge. Firms with adequate capabilities, processes and knowledge will be able to differentiate the value that they are able to provide customers from that provided by their competitors. Thus, rms should successfully develop their capabilities for acquiring external tacit knowledge or transferring their current tacit knowledge across internal units to achieve a sustainable competitive advantage. Li and Calantone (1998) also pointed out that utilizing competitor knowledge has the following three stages: acquisition, interpretation and integration, and such knowledge is not generated automatically, but depends on the related KM abilities of the organization.

3. Conceptual framework This research is based on Porters analysis of ve forces that impact a rm: the competitive rivalry within the same industry, threat of new entrants, threat of substitute products, and the bargaining power of customers and suppliers. It then conducts analyses on external knowledge through expanding the discussion to include the ve related forces (Tseng, 2008), namely: the competitive rivalry within the same eld of knowledge, threat of new knowledge, threat of substitute knowledge, and the knowledge of consumers and suppliers. In order to reduce the complexity of the analysis, competitive rivalry of knowledge, threat of new knowledge entrants and substitute knowledge are all classied as competitor knowledge. Therefore, three main aspects of knowledge sources are formed, as follows: customer, supplier and competitor knowledge. Lastly, by application of the knowledge chain model (Holsapple & Singh, 2001), this study illustrates how the valuable knowledge the enterprise obtains through the following ve primary activities, acquisition, selection, generation, internalization, and externalization, can transform customer, supplier, and competitor knowledge to enhance enterprise competitiveness. The conceptual framework of this study is illustrated in Fig. 1. 4. Methodology The objective of this study is to explore the relationships among customer, supplier, and competitor knowledge, and the knowledge chain. Since there are few existing studies that show how an enterprise can transform such knowledge to enhance its competitiveness by analyzing the knowledge chain, this is an explorative work, and as such it is hard to use quantitative research methods. In other words, before undertaking the study we have no idea whether there are any relationships among customer, supplier, and competitor knowledge, and the knowledge chain. If certain connections do exist, this work will explore them. Furthermore, a case study is particularly appropriate when examining how and why questions that deal with complex links that need to be traced over time and in context (Cooper & Schindler, 2006). Therefore, these characteristics suggest that a case study approach is an appropriate methodology for this work (Yin, 1994). 4.1. Data collection and analysis This research obtained information through a large-scale review of books, journals, conference proceedings, and other reports. This step provided the foundation for developing a comprehensive conceptual framework and theory to ll the current gap in the literature. In the next step, in-depth interviews with senior executives from two companies were carried out, each lasting for about an hour and a half. The interviews conducted in this study were of a face-to-face, semi-structured nature, which is one of the most common methodologies in qualitative research (Bryman & Burgess, 1999). This type of interview involves asking a number of predetermined questions derived from the literature, although the respondents were able to determine the direction and content of the interview within a broader framework provided by the interviewer (Delahaye & Smith, 1998). After the interview with each company had been completed, the results were assembled, transcribed and e-mailed to the respondents for their review and approval in order to mitigate any misunderstandings. This process claried the specic wording of some measures, as well as adding some others not found in the literature. This process is expected to provide this study with a richer and more holistic appreciation of the problems regarding knowledge chain activities than could be gained by other approaches.

2.4. Knowledge chain Potential resources of competitive advantage are everywhere in the rm (Porter, 1985). To highlight the idea that competitive advantage grows fundamentally out of the value a rm is able to create for its customers, Porter invented the value chain model, composed of nine value-adding activities. These value-adding activities form a bridge between competitive strategy formulation and implementation. Moreover, the value chain of an enterprise is usually connected with the value chains of the suppliers, channels, and clients, which then become a value chain of the industry. Any enterprise can apply this value chain model to analyze how to reduce costs or develop strategic actions. At the same time, a rm can conduct analyses of the value chain linkages among its suppliers, manufacturers and clients in order to nd ways to enhance competitiveness. Over the last decade, many researchers and practitioners have recognized the importance of KM as a key factor in competitive advantage. Shin, Holden, and Schmidt (2001), for example, integrated various different terms used in the KM literature and aggregated these earlier works into a simple KM value chain. Their KM value chain is divided into four activities: knowledge creation, storage, distribution, and application. In the same year, Holsapple and Singh (2001) worked out another knowledge chain model, comparable with Porters earlier value chain and grounded in a descriptive KM framework developed via a Delphi-study involving international KM experts. The knowledge chain model identies and characterizes the KM activities an organization should focus on to achieve improved competitiveness. Holsapple and Singh divided KM activities into a total of ve primary and four supporting ones. The ve primary KM activities are knowledge acquisition, selection, generation, internalization and externalization, and the four supporting activities are knowledge leadership, coordination, control and measurement. By using the knowledge chain model, analyses of the activities and resources needed to conduct KM operations will be made more feasible and thus better able to enhance competitive advantage. In conclusion, enterprises should possess systemized a database of customer, supplier and competitor knowledge, analysis of which can be sent to managers to plan and decide new competitive strategies. However, evidential studies on how an enterprise can actually transform such customer, supplier and competitor knowledge to enhance its competitiveness are still rare, and little related work has been done on the knowledge chain model (Su, Chen, & Sha, 2006). Thus, this study applies the model and considers customer, supplier and competitor knowledge in order to investigate how enterprises transform external knowledge into valuable internal knowledge.

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Fig. 1. The conceptual framework.

The datas validity was ensured through the use of multiple sources of evidence, including the interviewees reviews of the case interpretations and a chain of evidence provided by the case data (Cohen & Manion, 1989). In qualitative casework, these procedures are collectively called triangulation, which is often used in order to conrm validity. This process also involves the comparison of data relating to the same phenomenon derived from different phases of the eldwork, from different sources, and/or at different points in the temporal cycle (Khera, Stroobant, Primhak, Gupta, & Davies, 2001). 4.2. Participants This study used a case-based perspective to match patterns in the data with theoretical explanations, and the case studies were two knowledge-based companies. The rst company deals in equipment modules and components mainly used in the semiconductor and TFT-LCD industries, and the second company focuses on designing, manufacturing and marketing innovative products, such as smart phones and PDA phone devices. These two companies are dedicated to implementing KM, and have thus adopted KM and other quality enhancing measures. As such, they are appropriate subjects for examining the research question about the relationships among customer, supplier, and competitor knowledge, and the knowledge chain. 5. Case ndings According to the results summarized from a series of interviews with senior managers and the documentary evidence, there are specic relationships and impacts of customer, supplier, and competitor knowledge on the rms knowledge chain. These primary ndings are described as follows. 5.1. Customer knowledge The respondents noted that the products and services provided by their enterprises had become much more complicated. For example, computer products are extremely varied and new

models are continuously being released; moreover, there are also numerous competitors in this market, which makes it difcult for effective marketing tools and strategies to be applied. Although information technology could help rms to record every transaction, marketing event, customer interaction, and other data, when the amount of data is too overwhelming and there is no systematic method for retrieving information from the customer knowledge database, the work of collecting such data may be wasted. In other words, it is impossible to generate customer knowledge automatically by just gathering data, and the process instead depends on internal customer KM abilities. During the interactions between the organization and its customers, staff should integrate, transform and share customer knowledge so that it can create corporate performance that fullls customer requirements. Furthermore, respondents also noted that after using the product or experiencing the service, knowledge related this consumption and would be derived from customers. Hence, through organized interactions with its customers, an enterprise can obtain knowledge related to new demands for products or services which can be useful references for improvements to current business plans. For example, when Boeing Company was developing the new Boeing 777 airliner, it had close interactions with its customers, which made it much more compatible with market needs. Another example is Microsoft Corporations product trials before release, such as developing tests, establishing product specications, and so on, which also require interactions to obtain and analyze customer knowledge to increase the chances of eventual success in the marketplace. Hence, enterprises should see their customers as partners who can assist them in developing new and better products or services, as well as enhancing their general competitiveness. 5.2. Supplier knowledge Respondents reported that supplier knowledge is derived from the knowledge of both upstream and downstream manufacturers. The upstream manufacturers knowledge includes so-called intelligent knowledge, such as information about scale and quantity, time-to delivery ability, product quality, public relations, and so on, all of which can help an enterprise to evaluate an upstream

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manufacturer. In addition downstream manufacturers have information about the business scale and quantity, distribution and salesmanship, public relations, and so on, all of which can help an enterprise to evaluate a downstream manufacturer. Respondents also said that knowledge creation did not merely occur inside the enterprise, but also could be generated through relations with others, such as at Toyota Motor Corp., whose competitive advantages are mostly derived from good collaborations with its suppliers. Therefore, an enterprise should maintain cooperation with several companies or loose relations with most of its associated companies, while also creating knowledge internally in order to maintain and improve quality, effectiveness and cost. Furthermore, respondents also noted that eld observations, discussion forums, lectures and formal instruction would enable an enterprise to share and exchange external knowledge with suppliers. For example: suppliers understand how customers use their products, and therefore internal knowledge is built which can be used to improve the production process. Moreover, respondents also elaborated that for a developing enterprise with little experience, it would be difcult to manage product design, manufacturing, evaluation, and commercialization alone. Hence, if suppliers can participate in the product development process, it will reduce unnecessary mistakes. In other words, the enterprise should try to obtain supplier knowledge and then analyze and evaluate it in order to help design new products or services.

5.4. Knowledge chain activities 5.4.1. Acquisition Respondents said that enterprises should possess external knowledge that has been collated into organizational knowledge. In other words, the organization should maintain close interactions with the external environment in order to create chances and channels to approach external knowledge resources, so that knowledge can be created and circulated among the group. Furthermore, respondents explained that the ways of gaining customer knowledge included the internal transaction process system, market research, opinions and complaints received by customer services, tracking website browsing behavior, and information shared during the interactions between sellers and customers. Respondents noted that supplier knowledge can be gained in the following ways: asking for upstream and downstream suppliers suggestions on products or services, and presentations on new techniques or conferences held by equipment manufacturers. Finally, competitor knowledge can be retrieved by nding related literature, websites, and knowledge databases; dispatching staff to participate in activities conducted by industrial labor unions; conducting market research; employing knowledgeable workers; and buying patents in order to gain valuable external knowledge. At the same time, the respondents also stated that in general enterprises would use knowledge databases and documents to store market information, as well as using intranets, bulletins, conferences, spoken communication, telephone or e-mail to transfer the information gathered. 5.4.2. Selection Respondents said that enterprises should be able to obtain customer, supplier and competitor knowledge and then ascertain whether it is valuable and relevant to their circumstances. Moreover, the information gathered should be collated systematically, so that it would be useful for staff when they wanted to create new knowledge. Respondents also mentioned that enterprises should extract customer, supplier and competitor knowledge from different resources and then store and transform it into valuable knowledge for their staff. Therefore, a database system could assist in the implementation of a KM plan, because it can integrate and store knowledge, and then provide it to others, giving the knowledge receivers good opportunities to absorb the information in order to improve the efciency of organizational knowledge sharing. 5.4.3. Generation As noted above, the respondents pointed out that enterprises should collate and transform the customer, supplier and competitor knowledge to obtain useful internal knowledge that can then be analyzed to create new knowledge. Furthermore, respondents thought that enterprises should focus on KM value and establish an appropriate environment to implement KM activities in order to encourage staff to be bold and build trust among themselves, make a cooperative work environment. In addition, rms should also simultaneously build actual mechanisms of practice which allow staff, customers, collaborative corporations and groups to share their expertise and knowledge so that users can better accomplish their missions, such as problem solving, decision-making, information sharing, generating innovations and learning new techniques. In addition, respondents claimed that information technology could support organizational knowledge transformation, by systematically saving all the information regarding every transaction and investigation in a database, as well as retrieving valuable marketing information to improve and manage customer relations. Moreover, respondents also elaborated that enterprises should establish knowledge communication channels, give incentives to their staff to encourage knowledge creation, mak-

5.3. Competitor knowledge Respondents stated that a companys knowledge derives from two main sources, the external and internal environments. External knowledge also inuences internal knowledge through a wide range of information from suppliers, competitors actions, benchmarking and other sources. Moreover, aspects on competitor knowledge have been dened as intelligent knowledge, such as competitors scale and quantity, threat level, manufacturing facilities and methods, research and development abilities, marketing strategies, and so on, information on which is benecial for evaluating competitors. Respondents further stated that competitors played a signicant role in an enterprises strategic planning, and thus a business should continuously gather information about its rivals to obtain useful knowledge. In other words, an enterprise should consider competitors actions in order to ensure that its strategies can exploit their weaknesses and avoid overlapping competitive advantages. Moreover, if an enterprise is able to understand the current and potential strengths, weaknesses, abilities, and strategies of its competitors, then it will be better equipped to develop the right counterstrategies. For example, HP (HewlettPackard) company collected information on its major competitors regarding their stock and distribution from various retail locations. This allowed managers to gain an understanding of how the enterprise, in different locations and times, could counter its competitors in the marketplace. The managers then suggested that their own product should be distributed in suitable quantities to the most appropriate retail locations on the right schedule, and developed plans to do so. Respondents also stated that the key factor to beat the competition was differentiation. The basic differentiation strategy is usually applied to issues of quality, cost, customer service and mass advertising. However, by observing professional practices, it is easy to imitate competitors, and thus many enterprises have realized that tangible assets are no longer that effective as a basis for differentiation, instead it is tacit assets, i.e. knowledge, which best delivers it. Therefore, in order to possess superior competitive advantage, an enterprise should be able to search for information about current and potential competitors from their existing knowledge database.

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Fig. 2. A framework for enterprises knowledge.

ing it possible to evaluate knowledge resources and knowledge creators.

6. Discussion Based on the results of interviews mentioned above, this research derived a framework to illustrate the knowledge chain processes, as shown in Fig. 2. It shows that the enterprises knowledge is supported by an infrastructure which includes customer, supplier, and competitor knowledge. Enterprises then apply knowledge chain activities acquisition, selection, generation, internalization, and externalization to gain customer, supplier, and competitor knowledge to enhance competitiveness. The following sections will summarize the ndings and discuss the studys implications.

5.4.4. Internalization Respondents assumed that enterprises should acquire, select and generate customer, supplier and competitor knowledge, and then transform this into knowledge resources for their internal divisions. Respondents also noted that knowledge sharing was a way to conduct knowledge conversion, with knowledge receivers interpreting new knowledge based on previous knowledge, while knowledge demanders should be able to imitate, follow and understand this information. During the knowledge sharing process, there are differences that arise due to various contexts, such as those dened by time, space, social distance, personal viewpoints, culture and language, which might cause knowledge distortion. Therefore, an enterprise should establish a knowledge community to learn, adapt and improve abilities so that the staff can learn from each other, as well as include learning knowledge and techniques as regular parts of employees jobs.

6.1. Customer knowledge Generally, information is gathered from the demands of customers, products provided by the competitors, or techniques related to the product (Troy, Szymanski, & Varadarajan, 2001). Hence, rms that can integrate customer knowledge and insight across core business processes will be the most successful (Srivastava, Shervani, & Fahey, 1999). According to the results summarized from the interviews, the primary approaches for extracting customer knowledge can be described as follows: 1. Companies should have customer KM ability. Good customer KM is good for knowledge storage, sharing, application and creation (Lin, Su, & Chien, 2006). It creates new knowledge sharing platforms and processes between companies and their customers. Furthermore, there are opportunities for employees to seek partnering relationships with their customers as equal co-creators of organizational value (Gibbert, Leibold, & Probst, 2002). 2. Through interactions with the customers, an enterprise can obtain knowledge related to new demands about products or services which can be helpful references for improvement; moreover, this process is benecial to customer satisfaction, customer loyalty and customer and employee productivity (Mithas, Krishnan, & Fornell, 2005).

5.4.5. Externalization Respondents pointed out that knowledge owners should be willing to give seminars, produce articles, or use other ways to communicate what they know. Meanwhile, enterprises should implement a scheme to encourage knowledge owners to engage in such communication. Respondents thought that the internal knowledge creation process was initiated by sharing tacit knowledge and thus, an organizations internal divisions should provide an interactive atmosphere for the staff to share communicate within, such as establishing knowledge communities whose members can be hold different job titles and be from different divisions. Through sharing feelings, emotions and mental models in this fashion, company-wide trust can be built. Organizational knowledge creation is thus a continual self-improvement process, and new perspectives will continue develop and circulate after their generation, internalization, and externalization.

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6.2. Supplier knowledge It has been argued that competitive advantage can be enjoyed if companies know how to expand, disseminate and exploit organizational knowledge internally; share, transfer, and receive knowledge from their business partners; and source knowledge from distant positions (Szulanski, 1996). Thus, supplier knowledge is very important for doing business. According to the results summarized from the interviews, the primary approaches for obtaining supplier knowledge can be described as follows: 1. Supplier knowledge is derived from upstream and downstream manufacturers. As the Internet becomes the main platform for business activities, maintaining competitive advantage through building strong relations with employees, customers and upstream/downstream suppliers and partners is the key factor to successfully facing the challenges of corporate management (Oppong, Yen, & Merhout, 2005). 2. An enterprise should maintain cooperation with several companies or loose relations with most of its associated companies, while it must also create knowledge with them in order to work hard at maintaining and improving quality, effectiveness and cost (Adenfelt & Lagerstrm, 2006). 3. Supplier participation in the product development process will reduce unnecessary mistakes. Supplier KM provides standards for the creation, sharing, harvesting and leveraging of knowledge within the partnering companies. It also makes supplier access and retrieval of knowledge more efcient, thus increasing supplier satisfaction rates (Choy et al., 2007). 6.3. Competitor knowledge Drucker (2001) assumed that market knowledge played a key role in product development and technical integration among the customers, competitors and the enterprise itself. Thus, observing the external environment is necessary to enhance competitiveness (Paiva, Roth, & Fensterseifer, 2008). According to the results from the interviews, the primary approaches to obtain competitor knowledge can be described as follows: 1. Competitor knowledge is derived from the external environment and dened as intelligent knowledge. Similar to customer knowledge, competitor knowledge is acquired, interpreted, and integrated information regarding the competitive environment (Collins & Hitt, 2006). 2. Being able to understand the competitive environment is the fundamental premise for external knowledge (Skinner, 1969). If the enterprise is able to understand the current and potential strengths and weaknesses, abilities, and strategies of its competitors, then it will be better able to develop the right counterstrategies (Hill, 1989). 6.4. Knowledge chain activities Enterprises should emphasize the information processing abilities of customer and competitor markets, particularly their information gathering, circulation, and responsive abilities (Wang, 2003). Therefore, rms should create chances and channels to approach external knowledge resources. According to the results summarized from the interviews, the primary activities for the knowledge chain can be described as follows: Knowledge acquisition Knowledge acquisition refers to knowledge identication in the external environment of an organization, which is then transformed into a representation available for internalization and/or

applied for knowledge generation or externalization. An enterprise should thus maintain close interactions with the external environment and utilize channels to gather information in order to make market knowledge usable in the cross-divisional integration process and gain the desired results (Hult & Ferrell, 1997). Furthermore, in order to assist creating collective and shared knowledge within groups and the organization, tacit and explicit knowledge should be acquired by individuals (Ruiz-Mercader, Merono-Cerdan, & Sabater-Sanchez, 2006). Knowledge selection Selection is the identication of the knowledge needed within an organizations existing knowledge resources and then providing it in an appropriate representation to a user that requires it. Therefore, enterprises should be capable of performing verication, evaluation and presentation of valuable knowledge from different resources and then storing and transforming it into valuable knowledge for their staff. At the same time, department and knowledge types are closely related to each other (Hansen, Nohria, & Tierney, 1999). For example, customer knowledge is much more likely being handled by the sales department. Similarly, R&D activities require a high level of tacit knowledge, while explicit knowledge is related to repetitive manufacturing functions (Bohn, 1994). Hence, after the knowledge is gathered, it should be classied and collated systematically to enhance its value. Knowledge generation Generation is producing knowledge through discovery or derivation from existing knowledge. Therefore, an enterprise should initiate a culture that fosters trust through the establishment of an incentive system for sharing knowledge among employees (Barrett, Cappleman, Shoib, & Walsham, 2004; Goh, 2002). Simultaneously, the company should incorporate knowledge from customers, suppliers and competitors for product and service innovation, idea generation and improving products and services. Furthermore, an enterprise should build a mechanism which allows staff, customers, collaborative corporations and groups to share their expertise and knowledge. Using internal knowledge to generate new knowledge can transform tacit knowledge into new perspectives and explicit knowledge (Chesbrough, 2003). Knowledge internalization Internationalization is altering an organizations knowledge resources based on acquired, selected, or generated knowledge. Therefore, an enterprise should enhance its ability to manage knowledge in order to assist staff to integrate and share knowledge among themselves (Ford & Chan, 2003). Moreover, employees will usually interpret new knowledge based on previous knowledge. Thus, an enterprise can assist in expanding staff skills by creating a learning environment, through the provision of knowledge on specic areas of expertise of strategic interest to the business. In other words, a rm should create a self-learning environment where staff have access to knowledge that enables them to acquire certain skills and competencies (du Plessis & Boon, 2004). Such a learning environment leads to institutionalization of the knowledge created, harvested and shared. Knowledge externalization Knowledge externalization is the usage of existing knowledge to produce organizational outputs for release into the environment. Hence, an enterprise should design a scheme to encourage knowledge owners to express their knowledge in certain ways. Moreover, an organizations internal divisions should also provide an interactive atmosphere for the staff to share their knowledge (Lin, Yen, & Tarn, 2007). Advances in technology and interfaces increasingly enable the acquisition of deeper knowledge, and thus information technology could store the right information in a knowledge database, and thus support organiza-

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tional knowledge transformation (Gottschalk, 2006; Kankanhalli, Tan, & Wei, 2005; Kwahk, Kim, & Chan, 2007). More knowledge is created through using such databases, which can then help to achieve a virtuous circle of creation and leverage. 7. Conclusions Although higher returns to scale and greater growth potential are generated by products with a high knowledge component, near identical products and processes quickly arrive on the market, eroding competitive advantage. Therefore, a rm should be quicker and more innovative than its competitors (Frederick & McIlroy, 1999). However, the knowledge creation required for this does not merely occur inside an enterprise, but can also be generated through relations with other rms (Albino, Garavelli, & Schiuma, 1999; Davenport & Prusak, 1998). Thus, this study investigates how enterprises apply internal knowledge chain activities to gain customer, supplier, and competitor knowledge, as well as transforming this to enhance enterprise competitiveness. After conducting a review of literature and expert interviews, a clear picture emerged, an illustration of which is provided in Fig. 2. This image indicates that an enterprises knowledge is supported by an infrastructure which includes customer, supplier, and competitor knowledge (Hsu, Chen, & Hsueh, 2006). Enterprises can then apply the primary activities of the knowledge chain to acquire, select, generate, internalize, and externalize this knowledge to enhance competitiveness. Therefore, the process presented here can serve as a powerful framework for how an enterprise obtains customer, supplier, and competitor knowledge. In addition, the knowledge chain presented in conjunction with this framework can help a company to absorb such knowledge. Acknowledgement Supported by National Science Council (Taiwan) under grant 962416-H-214-004-MY2. References
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