Electronic marketplaces and price transparency: strategy, information technology, and success

Citation

(2007), "Electronic marketplaces and price transparency: strategy, information technology, and success", Strategic Direction, Vol. 23 No. 2. https://doi.org/10.1108/sd.2007.05623bad.011

Electronic marketplaces and price transparency: strategy, information technology, and success

Electronic marketplaces and price transparency: strategy, information technology, and success

Soh C., Markus M.L., Goh K.H. MIS Quarterly, September 2006, Vol. 30 No. 3

Purpose – to examine the relationships between such major factors influencing electronic marketplace (EMP) business strategy as price transparency and performance through the analysis of EMPs competing in the sale of a broad range of standard electronics components. Design/methodology/approach – a review of the literature of price transparency issues in the context of EMPs is presented to provide the basis for the proposition that strategic management theory can help to explain price transparency in IMPs and EMP performance. Reports the results of study to validate the proposed theory, based on a close examination of 19 EMPs involved in the sale of an extensive range of electronics components using three constructs: EMP performance; EMP capability to increase price transparency; and EMP strategy; using data drawn from the electronic commerce (e-commerce) and business strategy literature. Findings – the results indicated that all those EMPs adopting a low cost strategy had high price transparency and performed poorly, while all EMPs that performed well pursued strategies of differentiation. Stresses that not all successful EMPs avoided price transparency and some succeeded in spite of adopting high price transparency. Research limitations/implications – future research could usefully assess the differences in EMP strategies across different types of industry. Originality/value – illustrates the power of strategic management theory to explain some of the apparent paradoxes in price transparency and EMP business performance.