Electronic marketplaces: A literature review and a call for supply chain management research
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paper_title: Electronic Marketing in Principle and Practice

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(Cassidy). However, it was not until a teletype auction was developed for butcher hogs in Ontario during the early 1960s (Peer) that electronic marketing gained much interest. After the development of a few successful telephone auctions (teleauctions) for livestock, principally pigs, and an unsuccessful teleauction for eggs in the United States during the 1960s, the concept was advanced when Schrader, Heifner, and Larzelere proposed a computerized egg exchange in 1968. Academic interest increased following the publication of a conceptual assessment of electronic markets as part of the "Marketing Alternatives for Agriculture" series from the National Public Policy Education Committee in 1976 (Henderson, Schrader, and Turner). Attention became more focused in 1978 when the U.S. Department of Agriculture's (USDA) Agricultural Marketing Service announced an initiative to partially finance pilot electronic marketing projects. My purposes here are to (a) define the concept of electronic marketing as it applies to agriculture, (b) describe applications of electronic marketing in agriculture, and (c) review some of the reasons for increased interest. These reasons, in turn, imply some performance expectations. The subsequent papers by Schrader and Sporleder bring empirical evidence to weigh on such expectations. Electronic Marketing as a Concept
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paper_title: Electronic markets and electronic hierarchies

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By reducing the costs of coordination, information technology will lead to an overall shift toward proportionately more use of markets—rather than hierarchies—to coordinate economic activity.
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paper_title: Digital Capital: Harnessing the Power of Business Webs

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From the Publisher: ::: When Transmeta unveiled its remarkable new microprocessors earlier this year, the company's founder, David Ditzel, told the media: "The Internet changes everything. In the future you will no more want to leave your home without your Internet connection than you do without your cell phone today." ::: ::: The Transmeta chips are designed from scratch to facilitate wireless Internet access from Web appliances and ultra-light laptops. Scores of other corporations are scrambling to come up with similar devices. ::: ::: In Japan, the revolutionary "i-mode" mobile phone is soaring in popularity. These svelte phones are constantly connected to the Internet. You don't have to 'logon' to the Web as you do in North America. The display screen is the size of a business card. More than 350 companies have built a vast array of Web sites for the gadget. Users can receive email, chat, buy and sell securities, download video and music, swap photos, read train schedules, look up their horoscopes, check movie listings, and on and on. The Japanese are hooked. ::: ::: This constant connectivity to the Net will profoundly effect how we go about our lives. At the early stages we will download straightforward content like music, newspaper clipping and ebooks. ::: ::: Soon wireless devices that pinpoint your location will be able to answer any questions on services and amenities in the neighbourhood. As you drive through a neighbourhood that you would like to move to, you will be alerted to any houses for sale with the right number of bedrooms and bathrooms. Naturally the device will tell you how to get to each house. ::: ::: These gadgets will be our constant companions and co-pilots as we go about our work and play. Their ability to extract useful information from the blizzard of digital data will be key. We will insist these devices intimately understand our needs and wants. ::: ::: As we explore in Digital Capital: Harnessing the Power of Business Webs, corporations are reinventing their business models around the ubiquitous, deep, rich and increasingly functional Internet. Large and diverse sets of people scattered around the world can now, easily and cheaply, gain near real-time access to the information they need to make safe decisions and coordinate complex activities. ::: ::: Different companies can add knowledge value to a product or service - through innovation, enhancement, cost reduction, or customization - at each step in its lifecycle. Often, specialists do a better value-adding job than vertically integrated firms. In the digital economy, the notion of a separate, electronically negotiated deal at each step of the value cycle becomes a reasonable, often compelling, proposition. ::: ::: Successful corporations are now distinguished by their ability to identify and accumulate digital capital. They use the Net to blend their intellectual acumen with other companies and leverage the combined insight. They use the Web to develop much deeper relationships with their customers. And they jettison the business models of the industrial age to reinvent their corporations for success in the digital economy. ::: ::: To repeat: The Internet changes everything. Digital Capital shows how.
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paper_title: Beyond the exchange--the future of B2B.

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Using the Internet to facilitate business-to-business commerce promises many benefits, such as dramatic cost reductions and greater access to buyers and sellers. Yet little is known about how B2B e-commerce will evolve. The authors argue that changes in the financial services industry over the past two decades provide important clues. Exchanges, they say, are not the primary source of value in information-intensive markets; value tends to accumulate among a diverse group of specialists that focus on such tasks as packaging, standard setting, arbitrage, and information management. Because scale and liquidity are vitally important to efficient trading, today's exchanges will consolidate into a relatively small set of mega-exchanges. Originators will handle the origination and aggregation of complex transactions before sending them on to mega-exchanges for execution. E-speculators, seeking to capitalize on an abundance of market information, will tend to concentrate where relatively standardized products can be transferred easily among a large group of buyers. In many markets, a handful of independent solution providers with well-known brand names and solid reputations will thrive alongside mega-exchanges. Sell-side asset exchanges will create the networks and provide the tools to allow suppliers to trade orders among themselves, sometimes after initial transactions with customers are made on the mega-exchanges. For many companies, traditional skills in such areas as product development, manufacturing, and marketing may become relatively less important, while the ability to understand and capitalize on market dynamics may become considerably more important.
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paper_title: Transaction Cost Analysis of Structural Changes in the Distribution System: Reflections on Institutional Developments in the Federal Republic of Germany

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The distribution system in the Federal Republic of Germany has undergone considerable structural changes during the last fourty years. Therefore trade issues such as drawing the "right" boderline between wholesaling and retailing, opening hours in retailing, the location of cash & carry markets, and the survival of small retail businesses have called forth much debate and litigation. However, in most cases such discussions lack an adequate theoretical framework that could separate out efficiency effects from other criteria. The design of the channels of trade can be interpreted as a problem of economic organization. From an economic perspective, such problems must be analyzed in efficiency terms. The application of transaction cost analysis may be of assistance in analyzing the causes of the structural changes and in understanding the economic consequences involved. Trade may then be explained as an endeavor which seeks to minimize transaction costs. And structural change in the distribution system should then be regarded as response to changes in transaction costs. It is the purpose of this paper to develop a framework for such an analysis and to illustrate its fruitfulness by the example of some particular provisions of the German Unfair Competition Law that attempt to regulate certain trade activities. First, the application of the transaction cost analysis to distribution and trade will be introduced. Then, factors influencing the level of transaction costs in distribution systems are identified. Changes in these factors can be seen as relevant causes of structural change in distribution. Furthermore, factors which restrict an efficiency-oriented adaptation to change must be considered; many of these restrictions can be traced back to transaction costs created by the legal system. The overall transaction cost analysis would, therefore, be incomplete without reviewing the impact of the legal system on the emergence of certain types of transaction costs which tend to preserve existing structures within the distribution system. For West Germany, one major source of such transaction
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paper_title: From Vendors to Partners: Information Technology and Incomplete Contracts in Buyer-Supplier Relationships

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As search costs and other coordination costs decline, theory predicts that firms should optimally increase the number of suppliers with which they do business. Despite recent declines in these costs due to information technology, there is little evidence of an increase in the number of suppliers used. On the contrary, in many industries, firms are working with fewer suppliers. This suggests that other forces must be accounted for in a more complete model of buyer supplier relationships. This article uses the theory of incomplete contracts to illustrate that incentive considerations can motivate a buyer to limit the number of employed suppliers. To induce suppliers to make investments that cannot be specified and enforced in a satisfactory manner via a contractual mechanism, the buyer must commit not to expropriate the ex post surplus from such investments. Under reasonable bargaining mechanisms, such a commitment will be more credible if the buyer can choose from fewer alternative suppliers. Information technology increases the importance of noncontractible investments by suppliers, such as quality, responsiveness, and innovation; it is shown that when such investments are particularly important, firms will employ fewer suppliers, and this will be true even when search and transaction costs are very low.
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paper_title: The impact of information technology on the organization of economic activity: the Move to the middle hypothesis

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Investments to increase the level of explicit coordination with outside agents have generally resulted in increased risk to the firm; firms have traditionally avoided this increased risk by becoming vertically integrated or by underinvesting in coordination. This paper argues that information technology (IT) has the ability to lower coordination cost without increasing the associated transactions risk, leading to more outsourcing and less vertically integrated firms. Lower relationship-specificity of IT investments and a better monitoring capability imply that firms can more safely invest in information technology for interfirm coordination than in traditional investments for explicit coordination such as co-located facilities or specialized human resources; firms are therefore more likely to coordinate with suppliers without requiring ownership to reduce their risk. This enables them to benefit from production economies of large specialized suppliers. Moreover, rapid reduction in the cost of IT and reduction in the transactions risk of explicit coordination makes possible substantially more use of explicit coordination with suppliers. The resulting transaction economies of scale, learning curve effects, and other factors favor a move toward long-term relationships with a smaller set of suppliers. We call this combination--a move to more outsourcing, but from a reduced set of stable partnerships--the "move to the middle" hypothesis.
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paper_title: Electronic markets and electronic hierarchies

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By reducing the costs of coordination, information technology will lead to an overall shift toward proportionately more use of markets—rather than hierarchies—to coordinate economic activity.
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paper_title: The Development of Electronic Markets in Logistics

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Logistics integration through market systems is the coming revolution in supply chain management. A number of systems have been attempted facilitating documentation exchange, matching of supply and demand, and providing other essential links and information. However, such systems have had limited success raising important questions about whether a truly useful global system can be developed. In this article, we conceptualize development of an all‐inclusive system termed the Logistics Brokerage System.
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paper_title: Virtual logistics: transport in the marketspace

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While transport seems to be increasingly constrained in its mission to supply services which are continuous, costless and available in all directions, the telecommunications system seems to have no such constraints and to be developing ever more rapidly in terms of inter‐connectivity, falling costs and multi‐directionality. It would seem to be impossible to contemplate the future demand for transport in isolation from the future demand for telecommunications and the question of the optimal interaction between the two mobility modes. Reviews the benefits of the different forms of telecommunications and virtual logistics. Investigates the implications for freight logistics and the supply side of the transport industry. Suggests a way to re‐engineer the analytical framework.
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paper_title: Supply‐chain management across the Internet

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The concepts of supply‐chain design and management have come to the fore, owing to the ever‐increasing complexity of the systems driving buyer‐supplier relations in both industrial and consumer‐based markets. The unprecedented levels of supply‐chain management complexity are partly attributed to the Internet, through its more recent business acceptance and commercial use. Deals with new competitive challenges being realised from the unprecedented speed of growth of the Internet and building commercially‐viable supply chains to meet the challenges faced by emerging virtual organisations.
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paper_title: Business‐to‐business online auctions: key issues for purchasing process improvement

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Describes the process for conducting downward price business‐to‐business online auctions over the Internet for direct material purchasing and presents common issues, process improvement opportunities, and the interpretation of auction results. Comparisons are made between online auctions and traditional procurement process. Also discussed are stakeholder reactions and the organizational issues generated when online auctions are introduced to traditional purchasing organizations, as well as the benefits to buyers and sellers. The author proposes that online auctions will delay the adoption of modern supply chain management methods and the implementation of lean production that are needed by both buyers and suppliers in order to truly eliminate waste and reduce total costs.
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paper_title: Business Models for Electronic Markets

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Electronic commerce over the Internet may be either complementary to traditional business or represent a whole new line of the new features of the Internet, critical questions to be answered include: ♦ what are the emerging business models; and related to this ♦ which strategic marketing approaches are applied, or emerging. This article addresses the first question above by providing a framework for the classification of Internet electronic commerce business models. This framework has been developed on the basis of current commercial Internet business and experimental work in European R&D programmes.
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paper_title: Business‐to‐business online auctions: key issues for purchasing process improvement

paper_content:

Describes the process for conducting downward price business‐to‐business online auctions over the Internet for direct material purchasing and presents common issues, process improvement opportunities, and the interpretation of auction results. Comparisons are made between online auctions and traditional procurement process. Also discussed are stakeholder reactions and the organizational issues generated when online auctions are introduced to traditional purchasing organizations, as well as the benefits to buyers and sellers. The author proposes that online auctions will delay the adoption of modern supply chain management methods and the implementation of lean production that are needed by both buyers and suppliers in order to truly eliminate waste and reduce total costs.
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Title: Electronic marketplaces: A literature review and a call for supply chain management research

Section 1: Introduction
Description 1: Introduce the transformation to e-economy and the significance of supply chain management in electronic marketplaces.

Section 2: Introducing electronic marketplaces
Description 2: Discuss the concept of electronic marketplaces and the jargon and confusion surrounding them.

Section 3: An electronic marketplace definition
Description 3: Provide a clear and concise definition of an electronic marketplace, differentiating it from other e-commerce terms.

Section 4: Why electronic marketplaces need to (re)act
Description 4: Analyze why many electronic marketplaces struggle and the critical role of effective operation and supply chain management.

Section 5: From a theoretical standpoint
Description 5: Evaluate theoretical perspectives on the compatibility between electronic marketplaces and supply chain management.

Section 6: From a logistical standpoint
Description 6: Explore the logistical perspective on supply chain management's importance to electronic marketplaces.

Section 7: Internet-enabled business relationships within electronic markets
Description 7: Examine different types of relationships within electronic marketplaces and their dependence on supply chain management.

Section 8: Different electronic marketplaces require supply chain management
Description 8: Categorize various types of electronic marketplaces and discuss how each type benefits from supply chain management.

Section 9: Buyer-oriented, seller-oriented and neutral EMs
Description 9: Detail the distinctions and supply chain implications of buyer-oriented, seller-oriented, and neutral electronic marketplaces.

Section 10: Vertical or horizontal EMs
Description 10: Define vertical and horizontal electronic marketplaces and discuss their respective needs for supply chain management.

Section 11: Pricing mechanism
Description 11: Describe the different pricing mechanisms used in electronic marketplaces and their impact on supply chain management.

Section 12: "What & how" businesses purchase
Description 12: Classify electronic marketplaces based on what and how businesses purchase and their implications for supply chain management.

Section 13: Open or closed EMs
Description 13: Differentiate between open and closed electronic marketplaces and their respective supply chain management requirements.

Section 14: EM transaction phases
Description 14: Explain the different phases of transactions in electronic marketplaces and how they relate to supply chain management.

Section 15: Market mechanisms
Description 15: Discuss the aggregation and matching mechanisms in electronic marketplaces and their relevance to supply chain management.

Section 16: Further research issues
Description 16: Identify and propose key research questions for future empirical studies on the intersection of electronic marketplaces and supply chain management.