Internet, Internationalisation And Customer Value Creation - The Case Of Medical Information On The Internet

Internet, Internationalisation and Customer Value Creation - The Case of Medical Information On the Internet

Introduction

During the late 1990s, when the Internet became widely used and accessible, it was something like a Klondike period for web-based business. There was an entrepreneurial spirit to question much of the established business and industry logic made possible by the technology and a rich supply of venture capital. Many new business ventures were launched aimed at selling and supporting software, hardware, infrastructure and service providing for the operation and utilisation of the Internet itself. New companies, initially and later also the established and traditional companies, were experimenting with the electronic business, as attempts to use the Internet as a channel for distribution of products, as a new channel for market communication and reaching out to new markets. Since the digital economy was about to develop there was an idea that there was only room for one industry-leader in each industry. The concepts of positive feed-back and the winner takes it all (see, e.g. Shapiro & Varian, 1999) pushed many of the ventures to aim at several national markets, and even the world-market, already from the beginning. Hence, the business concepts at the time favoured an international launch. We also witnessed a type of business that combined several offers and value propositions into a package made accessible on the Internet, at times the businesses also sought revenues from a variety of sources.

These businesses were mushrooming in almost any sector and they all signalled a revolutionary spirit to the established industry and way of doing business. One of the more successful examples of a consumer-oriented electronic marketplace is E-bay, serving as an on-line auction for almost any product. A striking example of a failure was Boo.com that aimed at being a shopping mall for fashion garments made available worldwide. Amazon.com, the virtual book-store that has become the somewhat virtual shopping-mall, is an example of a Internet-based venture that has been searching a long time for its core business. On the industrial market side Endorsia.com is an example of a forward supporting venture linking several industrial goods providers with the a large number of distributors worldwide. The big three US-automakers formed Covicint to combine efforts and form a single global business-to-business supplier exchange for coordination of the automation industry supply side. These ventures may be called e-portals, e-commerce exchanges or e-marketplaces (c.f., European Commission).

During the early days of these new Internet ventures we saw both new entrepreneurial attempts and existing industry members that experimented with developing Internet-based ventures. There were apparently various situations where Internet-based coordination between companies was present and affecting both the coordination of each venture as well as industries at large. Three important dimensions of industrial and market development were at hand: Firstly, the creation of new Internet ventures emerged in an international context. Secondly, they were linked to new forms of value creation processes for the users and customers. Lastly, they often required new forms of cooperation between established and new companies. This chapter puts focus on these three inter-related dimensions of new Internet ventures.

Prior Research and Theoretical Emphasis

Early research on new Internet ventures had a tendency to focus the empirical interest on physical goods and the infrastructure industry supporting the Internet and less attention to informational contents industries and service outputs as exchange objects of the business ventures. There also seemed to be a lot of research emphasis put on the structuring of internal organisation, the company prerequisites for success, contractual channel arrangements, and a market optimising perspective. Less attention was put on the core market exchange and its value constellation setting. There also seemed to be less attention directed to the organisational and inter-organisational processes underlying the new Internet-based ventures and the formational processes of the ventures.

The early theoretical explanations of these IT supported developments were, at the time, typically focusing on a set of theoretical issues. One line of thinking was the Porterian competitive strategy explanation, stating that existing companies could strengthen their competitive advantage with IT (Porter & Millar, 1985). Another field of theory was based on the transaction cost theory explanations to the business use of IT (see e.g. Malone et. al., 1987, Brynjolfsson & Smith, 2000). The technology-supported ventures could bypass middlemen and other costly activities in the transaction between the production and demand. Hence, the explaining factor was the reduced economics in coordination, implicit in the ventures, striving for a cost efficient market (see e.g., Wigand 1997). General, conceptual thinking about the creation of electronic marketplaces was found in research on marketing and value creation processes with a specific focus on IT, Internet and electronic business contexts (e.g. Bakos 1991, Sarkar et. al., 1998, Bakos & Brynjolfsson, 1999 and Smith et. al., 1999).

Another stream of research focused on the concept of business models, a popular concept for companies to use when developing business over the Internet. These contributions of classifications of new business ventures by Timmers (1998; 1999), who set the initial framework, have been further elaborated upon (e.g. Mahavdevan, 2000 and Essler & Whitaker, 2001). The ambition in those has been to classify the mechanics of the venture, in terms of what is produced and by which means, and what the costs and revenues of the business are. That is, the classic production function perspective of a company is being challenged. These studies imply that there seems to be more dimensions into these kinds of ventures than the suggested optimisation of a market by the cutting of distribution and communication costs.

Problem Area: Three Inter-Related Issues

New forms of cooperation

This article draws attention to three important, interrelated dimensions connected to the emergence of new Internet-based companies, some of which were not given priority in the early attempts to study and analyze these new ventures. Firstly, at times we can see specialised actors appear on the market for new Internet ventures. In some situations, we encounter new integrators instituting a new role around the Internet-based market solutions. These actors may generally be labelled