Abstract
Different types of Electronic Marketplace (EM) strategies have been articulated in the literature. EM strategies vary from public exchanges to private extranets. This chapter reviews existing literature and provides a parsimonious framework for classifying EMs. The proposed framework utilizes two dimensions: relationship and product’s level of value addition. Based on the framework, the research theoretically derives five dominant EM strategies. The authors also highlight the applicability of their framework by providing illustrative examples of current industry practices in the realm of B2B EM.
TopBackground
A number of B2B classifications have been introduced in the literature, but there is little consensus among researchers (please refer to Table 1), allowing room for additional classifications. Pavlou & El Sawy (2002) classify marketplaces based on number of buyers and sellers. They place within their classification, exchanges (many to many), monopolies (few to many), dyads (few to few) and monopsonies (many to few). A similar approach is followed by Barnes-Vieyra & Claycomb (2001) who classify marketplaces by number of participants. In their classification they considered one seller to many buyers, many sellers to one buyer, and many sellers to many buyers. Additionally, they also consider the presence of intermediary such as aggregator or broker in situations where there are many buyers. Wise & Morrison (2000) do no classify marketplaces, but provide the following categorization of EM strategies: “Mega-exchange,” “Specialist Originator,” “E-speculator”, “Sell-side asset exchange,” and “Solution provider.” This appears in various forms in the literature as “market mechanisms.” Kaplan & Sawhney (2000) classify E-market places based on what businesses buy and how they buy. These are now classified as “product” and “buyer behavior” dimensions respectively (see table 1). Clarke & Flaherty (2003) utilize a three dimensional scheme to classify portals: horizontal-vertical (“industry focus”), public-private (“ownership”) and informational-transactional (“functionality”). They recommend portal development strategies and link design steps with e-commerce objectives.
Key Terms in this Chapter
MRO: Maintenance, Repair and Operational inputs – used to characterize the “product” dimension.
Electronic Market Place: Place where industrial buyers and sellers conduct transaction by electronic means. There is no restriction here on buyer-seller cardinality i.e. there can be one buyer and multiple sellers, one seller and multiple buyers etc.
Operational inputs: Refers to raw materials.
Exchange: Exchange is a specialized version of an Electronic Market Place where the number of buyers and sellers is large.
EM Strategy: Refers to the specific approach taken by an e-commerce business in terms of products, markets, infrastructure etc.
Market Mechanism: Is the method used to determine pricing. It could be auction, reverse auction, fixed pricing, etc.
Inter-organizational System: Information systems that involves multiple organizations such as buyer-supplier purchasing system.