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B2B E-Commerce Revisited: Revolution or Evolution? Guest Editors' Preface to the Special Section
| In: Kauffman, Robert J.; Dai, Qizhi; Schmid (Editor), Beat F.; Pavlikova, Lucia: EM - B2B Electronic Commerce Revisited: Revolution or Evolution?. EM - Electronic Markets, Vol. 12, No. 2, 04/02. Lead Author: Qizhi Dai. |
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Keywords:
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Business to Business
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Economic Theory
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Parent document:
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Text type:
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journal paper
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Electronic Markets
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Language:
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English
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Quality:
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double-blind reviewed
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Authors:
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Dai, Qizhi
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Kauffman, Robert J.
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| Abstract: |
The application of Internet technologies for the conduct of inter-firm business transactions has given rise to a boom in business-to-business (B2B) electronic commerce. Electronic procurement and electronic catalog management systems have been widely adopted to move corporate purchasing and selling online. In addition, a variety of electronic markets have been set up to facilitate inter-firm transactions and broaden market access for buyers andsuppliers. Although there are many success stories about application of Internet technologies in this application area that have been reported over the past several years, overall, the progress of B2B e-commerce has been hindered by many unanticipated technical, organizational, economic and legal challenges that diminish value.<br><br>For this special section of Electronic Markets, we invited original papers that contribute to our understanding of the continuing revolution in B2B e-commerce. Our primary editorial mission was to encourage participating authors to reflect upon the various ways that evolution is occurring with respect to the fundamentals of B2B e-commerce in the Digital Economy. Although many observers applauded the bright prospects of B2B electronic markets, the verdict rendered by the marketplace to date has been far less positive. Too many electronic supply procurement markets have not been able to achieve operational critical mass, for example. Meanwhile, the technology solutions vendors for Internet-based supply chain management services have seen their revenue growth and profitability fall sharply, as problems with consolidation of technical standards, unexpectedly high implementation costs, and slower-than-expected adoption in many industries have ensued. Such developments in the marketplace prompt us to revisit the findings of prior academic research in this area, and to search for better ways to understand the evolving aspects of B2B e-commerce.<br><br>This special issue begins with an article by Qizhi Dai and Robert J. Kauffman of the University of Minnesota (USA), entitled"B2B E-Commerce Revisited: Leading Perspectives on the Key Issues and Research Directions." The article sets the tone for the research problems that other authors address in their articles in this issue. We conducted interviews with a number of leading business and academic research leaders with significant first-hand experience and in-depth knowledge of the critical issues in B2B e-commerce. Our own and our interviewees' reading of the recent developments-the revolution of B2B e-commerce-is critical of the many opportunities that firms have missed due to a lack of sufficient understanding among managers and solution vendors of the core drivers of business value in this area. In spite of this, however, our interviewees point to a series of specific perspectives and issues that call for more careful examination when assessing the evolution of B2B e-commerce.<br><br>Our interviews also laid the foundation for the editorial process for this special issue because our interactions with research center directors, leading theorists, chief executive officers and authors of high impact books on e-business and information technology grounded our sense of how to evaluate the work we read in terms of the combination of industry relevance and academic rigor. Through these interviews, and the five articles that follow, we are able to point out the critical importance of helping senior managers to obtain a better understanding of how to think through investments in B2B e-commerce technologies and their consequent impacts and returns. The articles sensitized us to the need of organizations for a better understanding of the implications of sharing sensitive business process-related information and valuable knowledge in supply chain management, with respect to competitive advantage and business value gained or lost. And, they emphasize the extent to which the adoption and diffusion of B2B e-commerce solutions is likely to be hindered by a range of issues that may create"limits to value" for the emerging technologies once they are implemented in interorganizational settings. Finally, we point to the need to more clearly understand the managerial strategies that may be applied to effectively manage strategic partnerships, business risks and performance outcomes related to B2B procurement exchanges.<br><br>The second paper,"The Evolution of B2B Marketplaces" by Kerem Tomak and Mu Xia of the University of Texas, Austin (USA), explores the conditions under which B2B exchanges emerge to replace peer-to-peer networks as a procurement support mechanism in supply chain management. A peer-to-peer network takes on the form of a"wheel" of links, with no central trusted exchange service provider. In contrast, an exchange network takes on the form of a"star," with transacting partners linked through a middleman. The authors go beyond the typical approach we have seen to date in the literature that investigates the conditions under which firms adopt an existing exchange. Instead, they develop a game theoretic analytical model that shows how each kind of B2B procurement networks emerges as an organization comprised of specific kinds of network links. The authors characterize the conditions under which the links stabilize, sothat when no participant has an incentive to deviate from a given link that it has formed, an equilibrium outcome is reached. This kind of analysis is valuable because it permits the study of both the formation and the evolution of electronic markets in B2B e-commerce. This research also has implications for future work that is to examine the conditions under which a variety of other specific market forms for electronic procurement intermediation will emerge.<br><br>The third article is authored by Kevin Zhu of the University of California, Irvine (USA), who examines"The Strategic Implications of Information Transparency in Electronic Marketplaces: Why Data Transparency May Hinder the Adoption of B2B Exchanges". The central focus of this article is on the effects of information transparency on firms' incentives to participate in B2B exchanges. The author analyzes firm incentives to join under different data disclosure rules. Increased information sharing helps firms to collectively improve the efficiency of their procurement activities. But it also exposes individual firms' cost information to the market, creating the possibility for a loss of competitive advantage through the correlation of procurement strategies among firms in the market. The author argues that firms decide to join B2B exchanges based on these positive direct effects and negative cross effects. The results show how information disclosure rules affect firm incentives to join B2B exchanges, and that, as a result, lower-cost suppliers and higher-value buyers tend to be the early adopters.<br><br>The fourth article in this special issue is entitled"Strategic Partnerships of Business-to-Business Marketplaces," by Markus Lenz, Hans_Dieter Zimmermann and Mark Heitmann of the University of St. Gallen (Switzerland). The authors view the ability to develop partnerships as an important competency of B2B market-makers, which increases the attractiveness of the exchange through the"perfection" of the range of services it offers. They tested this view through a survey of European B2B e-commerce firms, and a more focused set of interviews with senior managers. The functionalities that result from strategic partnerships cluster in three areas: information services, transaction services and value-added services; value-added services appear to be the most demanded in the market. The authors also learned that such services provided through an exchange and leveraging the core competencies of its strategic partners, create value in four ways: (1) increasing liquidity and depth of the market through additional participation; (2) providing other core transaction-making capabilities that go beyond the aggregation, matching and facilitation capabilities of the exchange (such as specific kinds of auction market microstructure systems support); (3) providing horizontal goods and services to industry partners (such as transaction completion support through links to shipping and logistics firms); and (4) creating upstream-downstream links between markets (such as links between a commodity exchange for chemicals and rubber on the upstream side and tires and plastics on the downstream side). The authors conclude that strategic partnerships have the potential to create significant competitive advantage for B2B exchanges.<br><br>The next article,"Pathways to Leadership for Business-to-Business Marketplaces," by Thuong T. Le of the University of Toledo (USA), identifies three waves of B2B electronic market developments: the initial DotCom e-market intermediaries and trusted third party exchanges (such as eSteel.com), the traditional firm and industry-sponsored markets (such as Covisint), and finally, private trading networks (which connect buyers with their own select group of suppliers). The author identifies value through collaboration and value through aggregation as the two primary sources of business value for electronic markets. He also argues that these value dimensions map to the pathways for market leadership. In this vein, the author proposes a two-by-two matrix that distinguishes among B2B e-market strategies as long-term failures, transaction facilitators, collaboration facilitators and balanced transaction-and-collaboration facilitators. Only the last of these results in market leadership. The authors further point out that the provision of liquidity and the extent to which process integration can be achieved are essential to market-leading success among B2B e-markets.<br><br>The final article is"Determinants of the Global Diffusion of B2B E-Commerce" by Nir Kshetri and Nikhilesh Dholoka of the University of Rhode Island. This paper provides an overview of the current status of global B2B e-commerce. The authors offer a theory-based comparison of the development of B2B e-commerce in the North America, Europe, Asia-Pacific, and Latin America regions. The authors examine in terms of growth, the leading sectors that are served, the geographic focus, business model types, and the constraints to further development. They also propose a conceptual model that suggests that the global diffusion pattern of B2B e-commerce ought to be a function of two sets of factors: (1) factors that will influence the magnitude of global e-commerce, and (2) factors that influence the geographical distribution of e-commerce. The former category of factors includes the underlying benefits that flow from the new technologies, as well as multinational corporations' B2B activities, the availability of skilled labor to leverage the technology, and competitive pressures for organizational adoption. Geographical factors include regional economics (e.g., logistics and telecommunications infrastructure, firm size and financial capital), political and cultural factors (e.g., tariffs on trade and macroeconomic policy to promote e-commerce), and the sponsorship of international technology promotion and economic development organizations.
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| Citation: |
Dai, Qizhi, Kauffman, Robert J.(2002): B2B E-Commerce Revisited: Revolution or Evolution? Guest Editors' Preface to the Special Section, in:Kauffman, Robert J.; Dai, Qizhi; Schmid (Editor), Beat F.; Pavlikova, Lucia: EM - B2B Electronic Commerce Revisited: Revolution or Evolution?. EM - Electronic Markets, Vol. 12, No. 2, 04/02. Lead Author: Qizhi Dai., http://www.businessmedia.org/modules/pub/view.php/electronicmarkets-8, [07/06/2008]
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