Emerging Market Mechanisms in Business-to- Business E Commerce: A framework*

Several researchers have predicted a significant growth trajectory for Businessto-Business (B2B) applications of E Commerce. Over the last five years, a variety of market mechanisms have emerged to address various issues pertaining to B2B E Commerce. However, there is a general lack of understanding among the researchers and practitioners on two key issues: What are the key characteristics of these market mechanisms? What factors drive the choice of one market mechanism over the other? Our current research addresses these questions through a study of 13 different market mechanisms in operation today. The study shows that B2B market mechanisms have the potential to enable organizations overcome the limitations of traditional markets such as poor market liquidity, high transaction costs and low operational velocity. The study reveals that while several market mechanisms promote competitive market behaviour among the participants, some others facilitate newer collaborative mechanisms. Four factors significantly drive the choice of an appropriate market mechanism for an organization. These include asset specificity, degree of fragmentation, complexity of product description and complexity of value assessment. We have developed a framework using these factors that unambiguously positions these market mechanisms. The framework will help organizations devise appropriate strategies to exploit B2B market mechanisms.