A Strategic Analysis of B2B e-Commerce : The Economic Impact of e-Marketplace Adoption

Recently, many organizations in various industries have introduced e-businesses for the purpose of adding value to their businesses. However, due to no comparable business models to e-business in the past, there are no reliable yardsticks to predict the performance of an e-business. This paper considers an environmental change analysis as a means to resolve this difficulty. System Dynamics (SD) could be a useful tool to generate effective results by examining the e-business model. SD model is developed to analyze the effects of an e-sales channel which was appended to the existing sales channels in the steel manufacturing industry. The results show an increase in average price and sales volume through the use of an auction process on the e-marketplace. Stocking expenses are reduced as well by the increase of the sales turnover. A possible scenario was adopted to the developed simulation model and investigated strategic issues to draw desirable strategies with market changes.