Abstract:

More than 1000 B2B e-marketplaces, consisting of third-party exchanges, industrysponsored marketplaces and private trading networks, have been formed in three successive waves. Their value propositions centre around two key dimensions: demand and/or supply aggregation to overcome market fragmentation (through search cost efficiency, price transparency and product-cost savings, market liquidity, network externalities and customer lock-in), and inter-firm collaboration for greater supply chain performance (through streamlined workflows and process-cost savings, customer lock-on, and business process integration). These two value dimensions produce a four-quadrant matrix that conceptually maps out three pathways to market leadership: liquidity early, process integration first, or liquidity and process integration simultaneously. Each of these pathways logically appeals to one of the three e-marketplace models, but is not without serious execution hurdles. The quest for leadership among e-marketplaces along these pathways, particularly their value propositions and execution hurdles, provides valuable insights into the demise of many early market entrants and the challenges facing the rest.

Keywords: B2B E-COMMERCE; ELECTRONIC MARKETPLACES; TRADING EXCHANGES; VALUE PROPOSITIONS

Language: English

Document Type: Research article