Strategic Choice of Electronic Marketplace Functionalities: a Buyer-Supplier Relationship Perspective

This paper explores the important factors affecting the choice of electronic marketplace (EM) functionalities. We propose that buyer-supplier relationship-related factors, such as transaction uncertainty, transaction specific investment, transaction frequency, complexity of product description, and non-contractible factors, can affect the choice of different EM functionalities. A case study method was employed to verify these propositions. We found that transaction frequency and non-contractible factors were two strong indicators of EM functionality choice, and transaction specific investment is a weak indicator. Depending on different types of transaction uncertainty, companies will choose different EM functionalities. Complexity of product description was low in all the cases we studied, and did not appear to affect functionality choice. An additional finding was that supplier power could influence a buyer's choice of different functionalities.