A strategic analysis of electronic marketplaces
MIS Quarterly - Special issue on the strategic use of information systems
Determinants of information technology outsourcing: a cross-sectional analysis
Journal of Management Information Systems
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Communications of the ACM
Information Systems Outsourcing; Myths, Metaphors, and Realities
Information Systems Outsourcing; Myths, Metaphors, and Realities
Information exchange in electronic markets: implications for market structures
International Journal of Electronic Commerce - Special issue: Electronic commerce and market transformation
Supplier selection and order lot sizing modeling: A review
Computers and Operations Research
Microproducts in a Digital Economy: Trading Small, Gaining Large
International Journal of Electronic Commerce
International Journal of Electronic Commerce
Linking commercial website functions to perceived usefulness: A free disposal hull approach
Mathematical and Computer Modelling: An International Journal
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The Internet has become increasingly important to organizations for certain aspects of electronic commerce. Many organizations have set up Web pages to capture the attention of potential buyers and to develop new business relationships. Others have set up indexing services to provide easy search capabilities to prospective buyers. While the unit search and communication costs have been lowered dramatically by the Internet, the cost of evaluating potential suppliers may still be prohibitive, especially for certain types of products and services. Thus, although the Internet makes it possible to locate a large number of new suppliers, an organizational buyer needs to deploy appropriate supplier-selection strategies (such as sequential evaluation with stopping rules versus bidding systems) that consider all cost elements involved in choosing a vendor. We develop an analytical model that allows a buyer to maximize payoff (net of supplier search, communication, and evaluation costs) from the selection process. We analyze how the nature of the product and the buyer's expectations about supplier characteristics determine whether a sequential evaluation or bidding should be used in the selection process. The Internet, when used in conjunction with the proposed strategies, results in a lower total expected cost to the buyer, even though more suppliers are being evaluated, because a better supplier is selected. We describe how intelligent database searching can further increase the efficiency of the proposed selection strategies. We also develop a minimum requirements announcement mechanism, which makes supplier selection through a bidding strategy economically feasible in situations where legal restrictions may bar the use of sequential evaluation.