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Figure 2.
E-market benefits
capabilities industry
participants needs fit
conceptual model
717
CSFs for
B2B e-markets
e-markets is contingent on their internal resources, the capabilities that extend from
those resources and the value-added services (i.e. benefits) those capabilities provide
that respond to the needs of industry participants. Moreover, a turbulent and rapidly
changing marketspace requires e-markets to respond dynamically to the rapidly
changing needs of buyers and suppliers by acquiring resources that develop dynamic
capabilities that service those needs. In other words, e-markets must constantly
monitor whether their resources and capabilities (internal environment) are providing
benefits that fit with the changing needs of industry participants (external
environment) in order to maintain being in a state of strategic fit.
The success of an e-market is contingent on how it serves or is perceived to serve
industry participants (Xing et al., 2012) given that the provision of various
organisational and supply chain benefits is a measure of B2B e-commerce success
(Cullen and Taylor, 2009). A number of the CSFs identified in this study can be mapped
to some of the benefits e-markets provide to buyers and suppliers as shown in Table V.
Some studies (e.g. Johnson, 2011a, b, c) have categorised such benefits along five
dimensions developed by Shang and Seddon (2002) that relate to five corresponding
dimensions of supply chain needs as shown in the e-market benefits capabilities
industry participants needs fit conceptual model in Figure 2. The conceptual model
can be used as a means of assessing the performance or success of e-markets.
Assumptions of the conceptual model include:
(1) Two types of e-market CSFs relate to their current operating activities and
their future success:
.
CSFs pertaining directly to e-market resources and capabilities to deliver
benefits that align with the supply chain needs of industry participants; and
.
CSFs pertaining to the external e-market environment, i.e. industry-specific
CSFs.
(2) The closer the fit between the benefits delivered by the e-market capabilities
and the supply chain needs of industry participants the more successful the
performance outcomes will be for both the e-market and its members.
(3) The benefits that e-market members gain from participation and the revenues
e-markets earn from transactions and other participation fees represent some
of the key performance measures for e-markets.
7. Contributions and limitations of the study
Contributions
This study addresses the many calls in the extant literature for more empirical
research on elucidating the factors that are conducive to the success of e-markets
(see Chong et al., 2010; Fairchild and Peterson, 2003; Fong et al., 1997; Hadaya, 2006;
Johnson, 2011a; Joo and Kim, 2004; Li and Li, 2005; Standing et al., 2010). The research
differs from previous studies on CSFs for e-markets because it represents the combined
perspectives of respondents in e-market, buyer, supplier and third-party organisations
in four disparate industry sectors of the economy. The study answers the research
question by highlighting factors that are perceived to be critical to the success of
e-markets and how they are important. The paper makes a theoretical contribution to
the academic literature on e-markets by relating the concept of CSFs with the theory of
strategic fit as, to date, no known study has examined CSFs for e-markets in the
718
MIP
31,6
E-market CSF
Example of
need(s) being
addressed Examples of benefit(s) to e-market members
Critical mass Operational Increased liquidly of transactions within e-market
Increased trading partners and economies of scale and/or
scope
Deep integration Operational
Managerial
ICT
Deep integration of buyers and suppliers
Seamless error-free transactions
Low cost trading platform for one-to-many or many-to-
many communication channel
Reduction of paper and paper-related costs
Enables auto-population of buyers and suppliers finance
systems with transaction data
Realisation that the organisation needs new IT
infrastructure to reap the full benefits of participation
Value
proposition
All Consultancy services to cater to the needs of buyers or
suppliers (e.g. training in best-value/best practice
procurement for buyers)
Exposure to wider industry participants or wider markets
through inter-operability agreements with other e-markets
Punch-out to suppliers so that suppliers can manage the
customer experience
Additional value-added services such as escrow services,
logistics, financing, tracking, mass customisation of some
products in some industry sectors, inventory management,
demand forecasting, order fulfilment, collaboration,
workflow
Can level the playing field for SMEs to compete with their
larger competitors
Leadership
participation
Strategic Economies of scale for participants in vertical e-markets
Economies of scope for participants in multi-vertical
e-markets
Industry
knowledge
All Consultancy services that provide benefits that address the
supply chain needs of participants in the industry sector(s)
the e-market operates
Articulate and provide benefits that meet the needs of
buyers and suppliers
Revenue model Operational
Strategic
Can be a lowcost mechanism for trading goods and services
(especially for SMEs)
Addresses the need for buyer or suppliers to engage in
e-commerce (especially for SMEs) to gain a strategic
advantage or to remain competitive
Branding and
reputation
Strategic Can raise the profile of participants (particular SMEs or low
profile companies and organisations)
Rich content Managerial
Operational
Strategic
Semi-automation of processes to facilitate purchasing
decisions
Differentiation of suppliers product offerings through
punch-out
Industry information, charts and white papers, transaction
histories, rich product descriptions and catalogues, tools for
comparison shopping
Auction tools, RFQ and RFI tools, collaboration
tools
Table V.
Mapping e-market
CSFs to market needs
and benefits
719
CSFs for
B2B e-markets
context of strategic fit. It combines the two disparate theoretical constructs to develop
the e-market benefits capabilities industry participants needs fit conceptual model
which serves as a precursor for theory building in future studies on B2B e-markets.
It also makes a practical contribution because it informs stakeholders involved in
developing e-markets or other online B2B ventures to better comprehend the conditions
and determinants of success.
Limitations
While the concept of strategic fit is a useful tool with which the performance or success
of organisations can be examined (Galbraith and Nathanson, 1979; Venkatraman
and Prescott, 1990), no universal definition of strategic fit is applicable in all contexts
(Venkatraman, 1989). Similarly, lack of consensus within the literature as to what
constitutes a CSF (Veen-Dirks and Wijn, 2002; Vaidya et al., 2006) and no consensus of
approach in determining CSFs among researchers (Bergeron and Begin, 1989) may be
criticisms that could be levelled at studies on CSFs. However, given that different
sectors of the economy have different e-market adoption contexts ( Joo and Kim, 2004;
Li and Li, 2005), there is an intuitive logic of asking key industry insiders to identify
what factors they consider to be critical to the success of e-markets in their
environment. For that reason, the paper did not take into account the views of the 20
non-adopters of e-markets who also participated in the wider scope of the research
project. Nevertheless, the approach used in this study is consistent with approaches to
uncovering CSFs in other studies (see Leidecker and Bruno, 1984; Sehwail and Ingalls,
2005; Vaidya et al., 2006) particularly where few empirical studies exist and in
exploratory research using inductive or semi-inductive approaches. As Gummesson
(2003) notes [y] inductive research lets reality tell its story on its own terms and not
on the terms of received theory and accepted concepts (Gummesson, 2003, p. 448).
Notwithstanding, criticism could also be raised that qualitative studies on CSFs may
not be readily generalisable outside their domain context and so make it difficult to
compare research findings. However, the purpose of the study was to advance current
knowledge and understanding of factors that are considered to be critical to the success
of e-markets rather than to seek generalisations beyond the context of the study.
Nonetheless, the findings and implications of this study are likely to be applicable to
other B2B online service firms operating in industrial markets.
8. Conclusions and future research
Conclusions
This exploratory study substantiates a broad definition of CSFs as issues that are
essential to an organisations current operating activities and its future success as
posited by Boynton and Zmud (1984). The findings of the study represent a snapshot
of e-market CSFs at a specific point in time when the e-markets were at a relatively
early stage of development and, therefore, some CSFs will change with time as
e-markets move along the growth curve for their industry. The research findings are
interesting because they appear to be counter-intuitive. For example, aggregating a
critical mass of active e-market participants is contingent on the collective, synchronous
and synergistic contribution of all the other seven CSFs. These findings are consistent
with other studies on CSFs that highlight what is considered to be critical for success in
their particular context and not necessarily the order or sequence of their importance
given that some CSFs are temporal and contingent on the stage of development or
industry/product life cycle of the research phenomenon being examined.
720
MIP
31,6
Future research
Although the study illuminates and expounds eight factors that are considered to be
conducive to the success of B2B e-markets, there is still a requirement for more
empirical and longitudinal research on factors critical to the successful evolution and
spread of B2B e-markets in a global context. This is especially the case as e-markets
mature, given their increasingly important impact on supply chains, markets and
economies around the world. Therefore, it would be very useful for future research to
examine whether the CSFs for B2B e-markets identified in this research extend to other
e-markets in other industry sectors from both qualitative and quantitative
perspectives. Similarly, it would also be useful for future research to examine the
extent, if any, to which the CSFs for B2B e-markets are transferable to B2C e-markets.
There is a distinct need for further research to explore performance measures for e-
markets and on developing a more comprehensive conceptual model based on the
concept of strategic fit with which the success of e-markets can be examined. Moreover,
examining the factors that facilitate the globalisation of e-markets is a key research
question for future research to consider. Likewise, examining the impact of culture
(e.g. entrepreneurial, organisational and national), the organisational change issues
among adopters and how the services marketing mix affects e-market adoption are
avenues for further research on the organisational adoption dynamics of e-markets.
Note
1. Pseudonym for the original name of the company.
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Further reading
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of enterprise resource planning implementations, Proceedings of the 34th Hawaii
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About the author
Michael Johnson is a Sessional Lecturer in Marketing at Aston Business School. His research
interests include e-business and the digital economy, services marketing and management,
the organisational adoption dynamics of innovative technologies in service environments,
organisational change, business excellence, entrepreneurship and enterprise. His research has
been published in Management Decision, Industrial Management & Data Systems, International
Journal of Services and Operations Management, International Journal of Business Innovation
and Research, International Journal of Services Technology and Management and the Journal of
Enterprise Information Management.
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