Website Quality and Profitability Evaluation in Ecommerce Firms Using Two-stage DEA Model

Abstract

This paper decomposes ecommerce business process into website quality and profitability and measures the efficiency in each sub-stage and the whole process. By comparing with efficiency scores in CCR, BCC and Kao and Hwang (KH) (2008) model, this paper finds that CCR and BCC model overvalues efficiency scores in contrast to KH model, which also implicitly reveals the poor coordination among business processes. From a single sub-process, it is more critical to improve website quality than profitability based on either sub-stage efficiency scores or return to scale analysis, while the profitability plays a more important role in the whole stage. This paper thus gives managerial insight on resizing its scale and optimizing resource allocation.