Business-to-business electronic marketplaces: membership and use drivers

by Koch, Hope Arlene

Business-to-business (B2B) electronic marketplaces (e-marketplaces) are one of the most heralded developments in recent years. These marketplaces bring together businesses buying and selling goods and services in an online buying community. E-marketplaces promise to increase the efficiency and effectiveness of procurement activities by replacing traditional manual processes with automated electronic procedures and by expanding the number of available trading partners. Despite the technology availability and the high potential benefits, very few e-marketplaces have succeeded. This three-year study identifies and investigates two major B2B e-marketplace stumbling blocks: attracting a sufficient number of members, and then influencing these members to use the e-marketplace.

This investigation uses a variety of qualitative techniques to solicit information from nearly fifty executives representing four B2B e-marketplaces with contrasting membership and use levels. Within each e-marketplace, the study solicited information from high and low use organizations, buying and selling organizations, and a nonparticipant organization. The interview data was analyzed using line-by-line analysis from grounded theory. The analysis involved assimilating the unique stories of each manager into drivers that affect e-marketplace membership or use. These drivers were then compared to membership levels and/or use levels.

The analysis resulted in three research models. Each research model is a data-driven representation of factors driving B2B e-marketplace membership, B2B e-marketplace use, and a particular organization's B2B e-marketplace use. Each model contains several unique drivers and offers a comprehensive picture of what is happening in e-marketplaces.

These findings enhance management's understanding of e-marketplaces, their role in business, their challenges, and ways of overcoming these challenges in order to reap the benefits of e-marketplace participation. This study brings one of the first grounded theory investigations of B2B e-marketplace membership and use to the limited academic research in this area. This research offers insights to a number of theories, including transaction cost economics, institutional theory, resource dependency theory, and public goods theory.