Alternative e-commerce business models and firm performance in competitive and hypercompetitive environments

Electronic commerce (e-commerce) has changed the business environment and has had a dramatic impact on the nature of strategy in business today. Firms are rethinking their strategy and business models in light of the complexity that the Internet has introduced into the environment. This study sought to explore the relationships among strategy, e-commerce business models, and environment.; The literature review reveals several gaps in knowledge with respect to how firms function within the business landscape that is rapidly being transformed by e-commerce. In light of the paucity of knowledge on several issues connected with e-commerce, the study sought to investigate, through case studies, (1) performance implications across firms in the same industry with different types of e-commerce business models and (2) strategies and whether firm performance will vary across firms in different industries with different types of e-commerce models and strategies in competitive and hypercompetitive environments.; One of the objectives of this study was theory building. The study conceptualized ecommerce business models in terms of the nature of functional integration (in-house sourcing and outsourcing) and the degree of integration of online and offline activities. Based on these two dimensions, three types of firms (Internet-enabled, Parallel, and Virtual) were used in the study. These firms were selected from the computer industry, the book industry, and the grocery industry.; Some of the theoretical propositions suggested by the study include: (1) The relationship among firm strategy, e-commerce business model, and firm performance varies across industries and different performance measures such as financial, efficiency and market measures. (2) The environment moderates the relationship among strategy, ecommerce business model, and firm performance. (3) In competitive environments, Internet-enabled firms pursuing a cost leadership strategy are likely to perform better than virtual firms in terms of financial measures. (4) In hypercompetitive environments, virtual firms pursuing a value strategy are likely to be associated with better performance than other firms in the same industry in terms of efficiency measures.; The study suggests the use of other research designs such as the survey to test these propositions and explore relationships among other key variables.