B2B E-Marketplaces - Interconnection Effects, Strategic Positioning, and Performance

Christina SOH, Lynne MARKUS

Abstract


Electronic markets theory leads to the prediction that the interconnection effects of information technology will lower coordination costs in market transactions, prompting a move from hierarchical to market arrangements. This prediction was apparently validated by the proliferation of B2B e-marketplaces in the mid-1990s. But the subsequent abrupt consolidation of public, independent e-marketplaces raises questions about what it takes for e-marketplaces to succeed. Experience with actual e-marketplaces suggests that electronic interconnection effects alone may not explain e-marketplace success. The strategic management literature provides a complementary view, emphasizing the fit between an e-marketplace's value proposition, its product-market focus, and its value activities. The purpose of this paper, therefore, is to explore the degree to which the strategic positioning perspective contributes to the explanation of e-marketplace success. We analyzed a pair of e-marketplaces sharing the same competitive space, one successful and the other less so. We found that the number and types of interconnection benefits alone did not make a good explanation of e-marketplace success. However, the additional concepts provided by strategic positioning theory - particularly the holistic fit between benefits types offered (value proposition), product-market focus, and value activities - do appear to explain well the observed differences in e-marketplace performance. Future research should extend our exploratory investigation of e-marketplace success.

Keywords


Electronic marketplaces;Business-to-business e-commerce;Strategic positioning;Brokerage effects;Integration effects;Value proposition;Strategic fit;Strategic alignment gestalts

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DOI: http://dx.doi.org/10.9876/sim.v7i1.114

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