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Keywords Electronic commerce, Supply chain management, case studies
Abstract Although many electronic markets have opened up, adoption of electronic marketplaces worldwide has been lower than expected. It is still unclear what the exact effects of electronic markets are, how they emerge, and what markets will eventually turn out to be the most successful in the industry. Several consultancy firms, e.g. Forrester, Merrill Lynch, and Morgan Stanley, have made statements on success factors of electronic markets, such as acquiring domain expertise, and a critical mass of users. However, none of those has been empirically studied. Because of the high failure rate of electronic markets, this research tries to identify specific factors that might be crucial for electronic market success. Through a literature review of previous research, an exploratory research model is developed to specify the success factors. Case study examples are used to assess the validity of the research model and illustrate the economic effects that could be experienced by both the electronic market itself, and by buyers and sellers, focusing on the conditions under which electronic markets are likely to fail or are likely to be a success.
1. Introduction
With the development of the Internet and the more tightly controlled extranets that have been built between business partners, we have seen the emergence of integrated supply chains. Integrated supply chains can be achieved by the tight integration of business processes in the supply chain and are the result of strategic alliances between business partners for achieving competitive advantage. To date, the small amount of integration that has taken place is achieved through tightly coupling technologies at great expense, which has driven the need for more loosely coupled market activities.
Electronic markets, as defined by Bakos (1997), allow the participating buyers and sellers to exchange information about prices and product offerings via an interorganizational information system. Because electronic markets might be able to reduce cost and other inefficiencies, these markets can appear at various points of the supply chain.
Creation of electronic markets is driven by a number of factors - from stakeholder motives, to market forces and regulatory pressures, to collaboration in building a market of critical mass for transaction cost reduction. The success or failure of an electronic market can depend on...