Impact of B2B electronic commerce on the industry structure and its implications-chemical industry

Abstract

This paper is mainly concerned on the impact of B2B electronic commerce and its business implications. To derive the business implications, this research is constituted of three parts. First, five forces model is applied to the chemical industry. The impact of B2B electronic commerce is speculated in detail. All of the five forces are changing according to the electronic commerce, the bargaining power of buyers and sellers are believed to be the most strong. Secondly, theoretical economic model for the network economics is modified and applied to the relationship of buyers and sellers. The B2B sector is regarded as composed of two parts, i.e. traditional marketplace and e-marketplace. The traditional marketplace is to the off-line and the e-marketplace is to the online. In this paper, the online and off-line commerce is treated as elements to merge into a shared network. And the compatibility of five industries is tested using the model we applied already to the B2B. Domestic and US industries show that they would be incompatible until 2004. Lastly, the business implications are derived from the results of the analysis. The bargaining power of buyers and sellers analyzed according to the compatibility of the industry. Because it is shown that the chemical industry would be incompatible until 2004, proper business strategies for the off-line and online firms are suggested.