Competition on the Web Market Both Against Other Web Based Market Companies and Against Their Real Market Analogues

Competition on the Web Market Both Against Other Web Based Market Companies and Against Their Real Market Analogues

Iulian Caraganciu (Univesity Lucian Blaga, Sibiu, Romania)
Copyright: © 2014 |Pages: 8
DOI: 10.4018/ijide.2014040105
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Abstract

The goal of this paper is to make known the business models by the type of seller and customer of the web market in order to better understand the field where web companies create competitive collusion. Further in this paper is going to be described the way competition between web companies and their real market analogues, as well as competition between web companies themselves, takes place. The types of business model that can be found on the web market are various. This shows us just how versatile the web market is. This paper aims to present a theoretical model on how competition between two web companies takes place, as it is not entirely a price based competition.
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Introduction

The web market is a growing market, and though it is not yet fully developed, we can already see that it has distinct features. According to Kuo-chung Chang, Jackson and Grover (2003), these distinct features make it necessary to introduce the term of web market, as being something different than the real market.

The web market can be described as the market that cannot exist without the web and the digital media. Companies from this market use digital means for different purposes, but there is one thing in common which can be classified as a market characteristic, all of them have a presence on the web. Their presence on the web is achieved via websites, e-shops and social networks.

The companies on the web market can be of different types, e-commerce being just one of the types, although it is the most frequently referred to. The amount of reference to the e-commerce web market segment can be explained by the fact that it is somehow easier to analyze than the rest of the segments, due to its resemblances to the real market stores.

One of the sectors from the web market, if categorized by business model, which is treated frequently by researchers, is the B2B segment. We are to mention it because due to the lack of intermediaries companies from the real market could benefit greatly from this sector. Which is shown in the turnover of such web companies. Companies from the real market could reduce their costs due to the lack of intermediaries in their supply chain, if they use web B2B companies, thus it could help companies become more efficient. (Karthik N.S. Iyer, Richard Germain, Cindy Claycomb 2007)

Being a growing market it is only a matter of time until the web market starts posing a competition threat to the real market. The competition with the real market is based on price and trust towards the web, or the lack of thereof. However the competition between web market companies isn’t a price based one.

The goal of this paper is to familiarize the reader with the application of the concept of competition to the web market vs the real market, as well as to describe competition between web companies. The premise is that competition between web companies is not a price based one, therefore the majority of the research on the matter, if done by classic methods (SSNIP test, OLS), isn’t completely accurate.

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