The emerging role of electronic marketplaces on the Internet

“…June 2004 281 Preface The new economy presents extraordinary opportunities for growth and profit for firms related to the electronic management of business-to-business relationships through renovated IT-based business models, or so-called electronic marketplaces (or exchanges) (Bakos, 1998).”

“Our findings are consistent with a stream of literature suggesting that electronic markets create business opportunities for new intermediaries (Chircu and Kauffman 2000,Methlie and Pedersen 2002, Bakos 1991, Bakos 1998, Sen and King 2003).”

“The implication of these changes for price competition has been widely discussed in both the academic literature (e.g., Malone et al. 1987; Bakos 1991, 1997, 1998; Alba et al. 1997; Bailey 1998; Smith et al. 2000) and the business press (e.g., Fortune 1996, The Economist 1997).”

“…consensus that the development in information technology has significantly affected various aspects of marketing concerning both buyers and sellers (Bakos 1998; Grover and Ramanlal 1999; Kuruzovich, Viswanathan, and Agarwal 2010; Salo and Wendelin 2013; Overby and Mitra 2014), there is a dearth of…”

“Even so, Internet-based e-commerce is still in its formative stages [2, 4], particularly in light of the dot-com shakeup, and it continues to be difficult to estimate the effect of Internet use on consumer behavior.”

“This is particularly surprising given the potential for mass customization strategies of electronic marketplaces where digital products can be tailored to individual customers’ needs at virtually no incremental cost [2,3].”

“The digital channel allows intermediaries to match buyers and sellers more efficiently and carry out the transactions at lower costs due to higher levels of digitization and the automation of their business processes [6].”

“Other disciplines, including management science (Murthi & Sarkar, 2003) and IS (Bakos, 1998), also recognize this push for personalization.”

“consistently reported as cost reduction, market reach, and knowledge transfer (Bakos, 1998; Kaplan and Sawhney, 2000; Amit and Zott, 2001; Barratt and Rosdahl 2002) there is little consensus over the supply chain factors that constrain e-hub adoption (Skjøtt-Larsen et al.”

“Clearly, this increase in consumer participation in the price-setting process is a bellwether of the future of Internet-based transaction-making [3].”

“Literature Review Bakos (1998) classifies the functions of marketplaces in to three categories: (1) matching, (2) aggregation functions, and (3) providing an institutional infrastructure such as legal and regulatory framework. Mahadevan (2003) provides a classification scheme for B2B marketplaces identifying 12 B2B ma…”

“Bakos lists the provision of an institutional infrastructure, such as a commercial code, contract law, monitoring and enforcement, to be a central function of electronic markets [3].”

“Bakos (1998) and Kurnia (2006), sees e-Commerce as responses to the changing environment due to changing tastes and new types of customers who are now demanding quality and the new sets of value propositions of what these customers want, when they want it and how they want it as well as the cost…”

“They have been studied widely by researchers such as Choudhury and Hartzel (1998), Bailey and Bakos (1997), Bakos (1998), and Archer and Gebauer (2002) and are sometimes called transactional functions (Thoung 2002).”

“Such personalization is known to be especially effective for information goods where the content can be aggregated or disaggregated to meet the need of an individual user (Bakos, 1998).”

“E-marketplaces have three main functions: aggregating and matching buyers and sellers, facilitating such transactions as e-catalogues and auctions, and maintaining institutional infrastructures, such as legal and regulatory frameworks (Bakos 1998).”

“Prices are also an essential matter of discussion in tourism, and ICT helps the tourists to fi nd the competitive and best price for travelling (Bakos, 1998).”

“Three critical roles of the e-marketplace are: Discovery of buyers and suppliers that meet each others’ requirements; Facilitation of transactions to enable information flows leading to the flow of goods and services between buyers and suppliers; and Support of decision processes leading to the development of collabor…”

“Among the various factors studied, we selected several that others have repeatedly claimed are vital factors in the electronic market (Jarvenpaa & Todd, 1996; Bakos 1998; Bhatnagar, Misra, & Rao, 2000; Degeratu, Rangaswamy, & Wu, 2000; Devaraj, Fan, & Kohli, 2002; Torkzadeh & Dhillon, 2002).”

“Suppliers: maximize revenue/price (Bakos 1998; Gaski 1984).”

“According to Bakos (1998), the market has three primary functions and eight subfunctions [23] (Table 1).”

“Bichler, Kaukal, and Segev (1999) use a similar utility function approach and discuss a web-based prototype of their multi-dimensional auction system. See also Bichler (2000). Bichler and Werthner (2000) extend their algorithm to the multipleunit, multi-attribute case and they provide a classification framework for va…”

“Moreover, disintermediation might not be the only possible outcome, since new roles for intermediaries, such as aggregation, trust provision, facilitation and matching emerge (Bakos 1991, 1998; Sarkar et al. 1995).”

“Just as in Internet adoption, the economics of doing business online requires a critical mass of customers to be attracted to e-commerce sites [4], [42].”

“1998) have pushed the development of the e-marketplace, where sellers and buyers can match their supply and demand for business transactions (Bakos 1998).”

“Instead, electronic marketplaces will more than compensate for the disintermediation phenomenon by promoting the growth of new types of electronic intermediaries (Bakos 1998) and new versions of traditional middlemen.”

“E-mail E-mail: eloukis@aegean.gr literature has for a long time strongly emphasized the big potential of B2B e-marketplaces, which constitute one of the most advanced forms of E-business, and the important benefits they can offer to both buyers and sellers: lower transaction costs, reduced inventory, higher efficiencies…”

“Eventually, the decentralized structure will turn back into a centralized structure in which one or more brokers can satisfy the need for information required for coordination (Bakos, 1998; Kornelius & Ekering, 1994; Malone & Rockart, 1991; Moore, 1996).”

“…setting (Reimer 1996) Structure/Architecture – Dyadic, one-to-one, one-to-many in nature (Swatman and Swatman 1992) Structure/Architecture – Multiparty (Bakos 1998) Electronically supports the processing phase (Reimer 1996) Electronically supports the initiation, negotiation and processing phases…”

“The Internet allows firms to dramatically reduce their costs of distribution for digital products (4) and can help toward managing the informational side of the distribution of physical goods, e.g. stock availability checking and delivery tracking (13).”

“The digital economy led to the progressive dismantling of barriers between industries, creating new competitive arenas where previously separated industries converged, progressively, mainly due to technological advances (Hamel and Prahalad, 1994; Hitt et al., 1999; Bakos, 1998; Overby and Min, 2001).”

“Many e-markets also provide value added services such as industry news and intelligence, supplier evaluation, feedback mechanisms, and consultations (Bakos 1998, Choudhury and Hartzel 1998, Christiaanse 2005, Grewal et al. 2010, Holzmuller and Schluchter 2002, Pavlou 2002).”

“…& Fiore, 1968), global city (Brzezinski, 1970), telepolis (Echeverría, 1994), technopolis (Postman, 1993), cybersociety -cyberspace (Joyanes, 1997), digital society (digital existence) (Negroponte, 1995), global empire marketplace (Bakos, 1998, Segev et al., 1999), virtual world (Echeverría, 2000).”

“…content analysis I. INTRODUCTION Business-to-business electronic marketplaces (B2B e-marketplaces), which serve as online intermediaries to match buyers and sellers and facilitate the transactions between them [Bakos, 1998], are a major beneficiary of new net-enabled trading possibilities.”

“Information systems can serve as intermediaries between the buyers and the sellers in a market, creating an “electronic marketplace” that makes it less expensive for buyers to acquire information about sellers’ product offerings and prices [6, 7, 8, 41].”

“TCE-based studies have found that information technology (IT) reduces negotiation time, (Malone et al. 1987) search costs (Bakos 1998), coordination complexity (Hart 1991 ) and formalism (Clemons 1993 ).”

“Such questions concern, for instance, the creation of electronic markets and sales (Bakos 1998; Brynjolfsson and Smith 2000; Kephart et al. 2000; Lucking-Riley 2000), the development of web-enabled softwares oriented toward e-business (Fraternali 1999; Cohen et al. 2001; Fourer and Goux 2001) and…”

“And, the costs of engaging the new ICT and the investments in skill training will, in turn, lead to increasing importance of organizations as mediators for agents (the inverse of both Bakos’ (1998) and Baen and Guttery’s (1997) predictions).”

“The abundance of data available in the marketplace is intended to provide more information about trading parties, markets, procurement and competition in the e-business environment (Bakos 1998; Rollins, Bellenger, and Johnston 2012; Singh, Salam, and Iyer 2005). In such a transparent environment, it becomes easier for…”

“Benjamin and Wigand (1995), Sarkar, Butler and Steinfield (1995), Bakos (1998), Wigand (1997) and Gellman (1996) have all hypothesized that the advent of networked ICT such as the Internet might enable electronic markets, perhaps resulting in decreased coordination costs and changes in the value…”

“Ultimately, greater price competition between companies can be expected, leading to a situation of perfect competition [1], [6].”

“Among these functionalities is the facility for matching buyers and sellers, the facilitation of transactions itself and the provision of an institutional infrastructure (Bakos 1998).”

“…and communication technology create more transparent markets, thus simply enabling otherwise fundamentally unchanged economic exchange processes and encouraging rational investor choice (see Bakos, 1997, 1998; Shapiro & Varian, 1999; Varian, 2000; for a different view, see Barber & Odean, 2001).”

“Bakos (1998) listed the three categories of functions for a B2B EMp, which are matching buyers and sellers, facilitation of transaction, and institutional infrastructure.”

“A S THE PHRASE DIGITAL ECONOMY SUGGESTS [77], the Internet era has opened up immense electronic commerce opportunities for many companies [5].”

“Internet-based marketplaces can deliver increased personalization and customization of products, and competitive pricing strategies [2].”

“In developing systems to support buyer's agents, sellers have an opportunity to ensure that the information infrastructure allows for both price and product differentiation (Bakos, 1998).”

“Bakos (1997, 1998) researched Internet search costs from a theoretical perspective.”

“…electronic marketplace that can reduce inefficiencies by lowering buyers’ cost to acquire information about sellers’ prices and product offerings (Bakos, 1997), facilitate transactions by matching buyers and sellers, increase differentiation, and lower the cost of product information (Bakos, 1998).”

“Hence, in an environment like the Internet, supplier-led markets are easily circumvented by third-party market makers or buyer-led consortia (Bakos, 1997, 1998).”

“…online intermediaries are able to quickly and economically connect buyers and sellers to one another, provide vast search capabilities to either party, and offer sophisticated decision support capabilities based on extensive historical data about different entities in the market (Bakos, 1998).”

“The Internet is often used for transaction based money critical applications such as online banking, stock trading, reservation processing and shopping, where the temporary interruption of service could have unacceptable consequences on the e-business [1-3].”

“…atomic e-business models, 1 while others focused upon generic business-to-business or business-to-customer models (Timmers, 1999) or e-markets (Bakos, 1998). e-Business model ontologies were also developed to help firms to understand, measure and evaluate different aspects of e-business…”

“Similarly, EC literature has classi ¤ ed products as digitiz-able, low-priced and easily described products (Strader and Shaw, 1997), information goods (Bakos, 1998), and based on information intensity (Palmer and Grif ¤ th, 1998).”

“Internet-based electronic marketplaces in general employ information technology to match buyers and sellers with effectiveness and lower transaction costs, leading overall to more efficient markets [1].”

“Lowest unique bid auctions are a new generation of online markets [13–18].”

“These issues include the difficulty of coding the underlying business rules into the EIT alternative; the fit of the EIT alternative with respect to the current hardware, software, and the sophistication levels of would-be users; and the fit of the EIT alternative with the external business environment (an example of…”

“Bakos proposed perhaps the first theoretical discussion on the role of electronic marketplaces.(2) By assuming the point of view of the digital intermediary, he described the function of digital exchanges in terms of matching buyers and sellers, facilitating transactions, and providing a legal infrastructure for onlin…”

“As search costs decrease, consumers will be better able to find the best offerings, and sellers will be forced to seek either greater differentiation or lower prices (Bakos, 1997, 1998).”

“and trading platforms [5] [15] [24] [4]”