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Making Sense of Emerging Market Structures in B2B E-Commerce
B. Mahadevan
Classification of B2B Market Structures
For the most part, earlier studies on alternative market structures focused on what the market structures are and the benefits that they offer,to,organizations. Our study, on the other hand, shifts the,discussion to when alternative market structures are appropriate. Hence, our choice of factors to classify,the market structures was mainly based on: linking the operational features and key value propositions of B2B sites with the governing economic principles; relating them to issues of dealing with products and markets in B2B domain and corroborating with evidences , from earlier studies.Based on,these considerations we identified fragmentation, asset specificity complexity of product assessment and complexity of value assessment as the factors for classification.
Dramatically,increased reach provides new alternatives for addressing fragmented supply chains in B2B markets. Reduction in the transaction costs introduces corresponding changes in asset specificity 21 Furthermore, asset specificity can be a useful attribute to differentiate market structures 22 Deep customization capabilities help organizations mitigate problems arising out of complexities in product description and value assessment.
Degree of Fragmentation
The degree of fragmentation in a market is defined by the number of players and the geographical spread. The key motivation behind this definition of degree of fragmentation is the degree of control or influence the buyers or the suppliers can exert on the marketplace. Fragmentation may exist either in the buyer side or in the seller side or both. We identify four sub-classifications of fragmentation of market participants . The degree of fragmentation points to a few behavioral patterns in the market.When there is less fragmentation, there When the degree of fragmentation is high on both the,supplier and the buyer side, the ma
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