Economics, e-commerce and strategy development: resources and rent creation for digital goods providers on the internet

Susanne Royer, Remco van der Velden

International Journal of Management and Decision Making, 2003, vol. 4, issue 2/3, 116-132

Abstract: After the great e-commerce hype in the year 2000, things changed dramatically. Dot-com companies vanished as rapidly as they had come into being. We argue that many of these bankruptcies can be explained on a strategic level. Business strategies - if at all existent - were not built on valuable resources and often failed to take environmental specificities of the e-age into account. Though economics as such did not change in the new environment, its predictions must be taken into account with regard to the specific internet environment. Markets, technologies, products and business processes must be analysed on a solid theoretical basis to be capable of understanding successful strategies that are based on valuable resources. We present an overview of the economic forces that drive value creation in e-commerce from a resource-based perspective. Understanding the underlying critical resources as well as the relevant economic forces leads to a more consistent strategy development process. In doing this, we focus on a specific group of firms in e-commerce: providers of digital goods (such as music, software or news information).

Keywords: economic theory; strategy; resource-based view; digital goods; e-commerce; internet. (search for similar items in EconPapers)
Date: 2003
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