A success factor model for electronic markets

Although many electronic markets have opened up, adoption of electronic marketplaces worldwide has been lower than expected. It is still unclear what the exact effects of electronic markets are, how they emerge, and what markets will eventually turn out to be the most successful in the industry. Several consultancy firms, e.g. Forrester, Merrill Lynch, and Morgan Stanley, have made statements on success factors of electronic markets, such as acquiring domain expertise, and a critical mass of users. However, none of those has been empirically studied. Because of the high failure rate of electronic markets, this research tries to identify specific factors that might be crucial for electronic market success. Through a literature review of previous research, an exploratory research model is developed to specify the success factors. Case study examples are used to assess the validity of the research model and illustrate the economic effects that could be experienced by both the electronic market itself, and by buyers and sellers, focusing on the conditions under which electronic markets are likely to fail or are likely to be a success.