[8] 2002 e-business-strategies-for-virtual-organizations

e-business models for virtual organizations
the defining characteristic of an electronic market is the
availability of pervasive information and communication technology
(ICT) infrastructures available to a critical mass of
customers. An organization is both constrained and supported
by the ICT adopted within the business ICT environment. Figure
3.1 shows this set of relationships.
Despite the growth of online activity, many firms fear a
deterioration of profit margins coupled with lack of control as
a consequence of market transparency and new forms of
intermediation. Nevertheless, as markets are challenged by
new entrants using direct channels to undercut prices and
increase market share, traditional businesses need new forms
to adapt to new marketspaces and channels. The first step is to
develop a strategy for creating a widespread presence in the
marketplace.
3.3 Strategies for widespread presence
3.3.1 Are you going to develop an online
market?
The more ordinary and unexciting the commodity, it seems, the
better the potential for an online market. With more than 20
industry exchanges now publicly traded at a combined value of
more than US$100 billion, high-tech analysts are falling over one
another to learn about seafood-spoilage rates, gas-valve supply
chains and similar specialized matters. Everyone is on the
lookout for the next VerticalNet or Chemdex.
Chemdex claims to be the only comprehensive B2B e-commerce
solution for the life sciences industry with rapid acceptance
among pharmaceutical and biotechnology companies. In March
2000 over 90 major enterprises had signed up with Chemdex for
life science product procurement. This list includes customers
such as Genentech, Rhône-Poulenc Rorer, and SmithKline
Beecham. But finding e-business opportunities is easy compared
with your task of judging their prospects. In their brief history,
Internet exchanges have gone through three phases, and the
accepted successful business model has not been found.
� The first phase introduced firms, such as General Electric
and Wal-Mart, moving much, if not most, of their buying
and selling online to cut costs and speed supplies. At that
time (barely five years ago) this looked revolutionary. Today,
their original aims of taking transactions online and cutting
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