B2B e-market firms have competed in the past several years in a rapidly changing market, where demand is uncertain and the technology continues to evolve. The nature of their services as trading and exchange networks has created unique challenges for them to achieve acceptance in their industry marketplaces. To cope with the various risks of failure, B2B e-market firms have sought allies that can provide complementary resources to perfect their business processes and core functionality, boost their market reputation, and add flexibility in product innovation. Our research presents preliminary empiri- cal evidence for the employment of strategic alliances as a risk-reducing strategy. We find that the more risks they face, the more alliances that B2B e- market firms form. We characterize this overall strategy as one of “partnering for perfection” in business process capabilities.
This chapter contributes to the literature in electronic markets through an empirical investigation of the strategies of B2B e-market firms by revealing how they employ cooperative approaches. This work also adds to what we know about alliance strategy formation by examining relevant theories in the context of emerging and dynamic B2B e-markets. The main message of our study is that alliances help reduce risks. Thus firms will be more likely to seek partnerships when the market and the technology risks they face are higher. This research will form an important basis for future research that aims to provide deeper insights on the efficacy of industrial practices in assessing the value of alliance strategies under various business conditions.
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