Special issue on
Authors: Tuunainen Virpi Kristiina 
Published: October 2004

Electronic commerce has been developing at a rapid pace in the
past few years resulting in some great success stories. In some
respects, these successes have created both an aura and impression
for many that achieving such success is common and perhaps even
easy to accomplish. Investors with this mindset, in turn, became
enthusiastic supporters for companies that were willing to take the
challenges offered by these new information and communication
technologies. Thus, we have witnessed a real "eboom" in the past
few years. However, we have also seen a dramatic down-turn for
those companies that have not been able to realize the expectations
of the investors.

It seems obvious now in hindsight that in many situations, the
expectations for e-business initiatives, both for dot. coms and
e-channels of traditional companies, were far too optimistic. In
fact, a large percentage of these initiatives were not well
designed and implemented. Consequently, problems occurred, for
example, in customer services, deliveries, returns, as well as
logistics in general. Huge money was also often spent in building a
brand image and marketing activities to complement the web-services
themselves.

What seems clear today is that e-business initiatives require a
solid business model that helps focus and direct tactical and
operational efforts. With an explicitly defined business model, it
becomes possible to distinguish the basic choices for product
development, marketing, ordering, logistics, financing and payment
solutions that either carry the ebusiness initiative to success or
helps further refine the system. In our opinion, it is clear that a
definitive single "all encompassing e-business model" does not
exist. Rather there is likely to be many different business models
that fit into different context, economic environment, customer
groups and needs, products and services. This special issue aims to
focus on what kind of business models have been used, or could be
used, and what has been their contribution among other factors
leading to success of failure of the recent e-business
experiments.

The four papers for this special issue offer interesting
perspectives and insights on different e-business models.

The article by Lee and Brandyberry examines the e-tailers
dilemma. They look at the problems e-tailers have faced in trying
to obtain new customers regardless of costs. In many cases where
the number of effective visitors (i. e., those who actually
generate business) has increased, additional costs for servicing
these customers have also increased resulting in the e- tailers
facing financial trouble. This represents a situation that has
occurred far too frequently in the past few years. Lee and
Brandyberry have developed a model to formalize the e-tail visitor
dynamics to understand the situation better. They also offer a
visitor function by which it is possible to project profitability
of infrastructure investments to support etailing for effective
visitors.

Palmer and Lindeman's study focuses on consumer markets and
three different market mechanisms used for e-business. The three
market mechanisms are direct search, broker and dealer. They have
conducted an empirical comparison on three consecutive cases,
PriceMarket, NetMarket and Bottom Dollar, on the trust mechanisms,
reputational ratings, information quality, availability, speed and
liquidity. They found significant differences across these three
models. The basic message is that different market mechanisms, or
mix of mechanisms are appropriate in different buyer-seller and
product context in the consumer market.

The article by Craighead and Shaw looks at ebusiness from a
resource-based perspective of the entire supply chain. They propose
a model that represents an integration of supply chain with
indirect and direct value for the customer at multiple points in a
supply chain. They also provide a set of matrices that enable
managers and researchers to conceptualize the business rules
provided by the model. Their model shows the role of information
technology and the supply chain in creating value with e-commerce
applications.

Krieger and Muller consider possibilities for benefiting from
the value created when Internet communities solve problems of
collective actions. They focus on the beliefs of the community
members, and use a metaphorical approach to describe Internet
communities, focusing on their legitimacy and reproduction. They
also offer a framework on how the value created can be translated
into profit. Krieger and Muller conclude that it is not enough to
consider success as the ability to legitimize the community, but
the communal entrepreneur must also position the community to its
competitive environment.