Academic journal article International Journal of Entrepreneurship

E-Market and Entrepreneurship

Academic journal article International Journal of Entrepreneurship

E-Market and Entrepreneurship

Article excerpt

INTRODUCTION

Research has shown that the e-market, a virtual space where sellers and buyers can communicate, initiate and complete business transactions, can help businesses increase their efficiency and effectiveness and enhance the company's performance (Malone et al., 1987; Bakos, 1998; Brunn et al., 2002). The increasing growth of the e-market in last several years has attracted much attention from academicians and practitioners, but the number of studies on the association of e-markets and entrepreneurship is very limited. Many studies have analyzed numerous benefits and likely challenges of the e-market. However, these studies have mainly focused on discussing the case of existing companies with a number of years in business. Very little attention has been paid to how newly established businesses can benefit from using the e-market and what sort of risks they may face in the process of operating an e-market based transaction.

The fact of matter is that the e-market can enable companies to enhance their performance in different ways depending on several factors such as the company size, the company's e-readiness, the industry sectors, and the years in business. As for the last factor, newly established businesses have some distinctive characteristics over old businesses. Empirical evidences indicated that in order to succeed in using the e-market, companies are required to integrate their internal process to the e-market platform (Brunn et al., 2002; Bloch and Catfolis, 2001). Upon this requirement, older businesses have to cope with difficulties in changing or adjusting their existing and stable business process; many of them still use out-of-date information systems that need substantial upgrade to be compatible with the e-market platform. As for new businesses, their process is more versatile, more adaptable, and the burden will be much less. In addition, being equipped with the up-to-date Internet-based technology their internal systems can be conveniently compatible with the most of current e-market platforms at a lower start-up and routine costs. On the other hand, new businesses are newer to the market and lack of a strong relationship with business partners as well as experiences in online-based transactions (Bates, 2005). For them, the collaboration with business partners provides more opportunities, a critical factor to the success (Bates, 2005). The last issue is what types of e-market are preferable for new businesses. Studies stated that the e-market is not homogenous to every business and different e-market types have different characteristics, advantages and disadvantages (UNCTAD, 2001; Le, 2002). It is important to identify which type of e-market gives new businesses the best benefits and which one may create most troublesome concerns to the ones who are new in the market.

The purpose of this research is to shed the light on the association of e-market and entrepreneurship, with a focus on the expectation and perception of new businesses toward the e-market usage. This research will help answer following research questions: 1) What is the extent of e-market usage by new businesses? 2) What are the differences between old businesses and new businesses in exploiting e-market's benefits and coping with its challenges? 3) What factors that drive new businesses for e-market usage? The empirical results of this research will help bridge the gap in the existing literature and provide practitioners with invaluable insights about the use of e-market for new businesses. The research will be constructed as follows. First, a comprehensive literature on the e-market is conducted to provide the definition, classification, benefits and challenges. Second, research hypotheses will be developed with the emphasis on how new businesses can benefits from using an e-market, what challenges they have to cope with, and the differences between new businesses and old businesses in regard to the use of e-market. …

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