The history of electronic markets dates back to the 1980s and early 1990s, when the first (pre-Internet) electronic marketplaces (EMs) were built. The adoption of the Internet by business companies and trade organizations has made Internet-based EMs an important phenomenon though. An analysis of the creations and announcements of EMs during their “boom time” shows that after 1997 and up to July 2002, more than 1000 marketplaces had emerged worldwide. This dramatic increase in the number (and popularity) of Ems prompted reports of a crisis among eBusiness companies and EMs alike that forced firms to cut personnel or even shut down.
With a multiple case study approach, this study investigates 10 German EMs from several industries over a long period. The objective of this thesis is to determine the (independent) factors that might influence the three dimensions of the success of electronic markets. That is, this thesis tries to determine if it is possible to identify the factors that influence the success of electronic markets. More specifically,
• Can we identify factors influencing the entry order (first mover, late follower) of a marketplace?
• Can we identify factors influencing the adoption/penetration of a marketplace?
• Can we identify factors influencing the competitive advantage of a marketplace?
These three dimensions of the “success” construct are based on previous research by Reich and Benbasat (1990). Furthermore, two other research questions are posed:
• Can other dimensions of electronic market success be determined?
• What are the interrelations among the three success dimensions for EMs? Is success on one dimension related to success on another dimension?
This thesis shows that adoption rates are influenced primarily by the service offering of the EM, its pricing model, and the existence of facilitating and inhibiting industry factors. Furthermore, competitive advantages depend on the adoption rate and availability of financial resources. A complex interrelation among adoption rate, competitive advantage, and financial resources also emerges from the findings.