Internet-Based Electronic Commerce and Changing Industrial and Corporate Structures: The Case of Scientific, Technical and Medical Publishing

Abstract

This Ph.D study, which has been possible thanks to the financial support of the Institute of Social Sciences at Roskilde University, gives some insight into the new field of Internetbased consumer oriented electronic commerce and how it can affect industry structures and transform value chains. Consumeroriented electronic commerce is seen as a specific type of information and communication technology (ICT) innovation, since it has been possible only after the advent of the World Wide Web (WWW) in the spring of 1993. This type of ecommerce is still at the beginning of the life cycle, and consumer spending on the Internet is still limited, but it is forecasted to boom in the near future especially in the context of the development of the information society. The thesis tries to give an answer to the following questions: 1. What is the impact of Internet-based electronic commerce on the industry structure of Scientific, Technical and Medical (STM) publishing with focus on intermediation and disintermediation? 2. How is electronic commerce transforming from the marketplace to the marketspace the corporate value chains and the corresponding business processes of the Scientific, Technical and Medical (STM) publishing industry? 3. How can the business value of electronic commerce to a corporation be optimized either in profitability or competitive advantage terms? This thesis gives an overview of consumer based electronic commerce, what is its business value to the corporations, and how it can impact industrial structures and corporate value chains, thus setting the basis for more focused studies to be conducted as future research. The empirical material, used mainly in a descriptive/predictive way, is based on the Scientific, Technical and Medical (STM) publishing industry. Examples from other industries are also occasionally used to better clarify the concepts. The main contribution of the thesis is the attempt to understand the implications of electronic commerce to the Scientific, Technical and Medical Publishing industry. More specifically, the main contribution of the thesis is represented by the following: the development of a business value complementarity model of electronic commerce; the impact of electronic commerce on the value chain of publishing, including a detailed analysis of the business processes of publishing in the marketspace; and finally the analysis of the potential impact of Internet-based electronic commerce on the industry structure of Scientific, Technical and Medical publishing. This thesis is an elaboration and more complete presentation of the content and background material of three articles that can be seen as a spin off of the project. The first article, ?The Impact of Electronic Commerce on the Publishing Industry: Towards a Business Value Model of Electronic Publishing?, has been published in the March 1999 Issue of the Journal of Information Science. The article derives the specific business processes corresponding to the on-line activities of the value chain, namely on-line production, on-line distribution, on-line marketing, on-line sales and on-line customer support and shows how they are transformed on the marketspace. Moreover, the article argues that complementarities between the different activities of the on-line value chain, the on-line business processes and the supporting technologies should be explored when a company wants to enter the field of electronic commerce. The second article, ?Electronic Commerce in Scientific, Technical and Medical (STM) Publishing: An Industry Analysis with Focus on Intermediation and Disintermediation?, has been published in the Proceedings of the IRIS 22 Conference, Turku, Finland, 7-10 August 1999, and it is under review in an international journal. The article analyzes how the advent of the World Wide Web (WWW) is changing the structure of the Scientific, Technical and Medical (STM) publishing industry. It is argued that this is due to many reasons, among which are: a) the introduction of new substitute products for the paper version of the journal, for example the electronic journal, on-line services and e-mail lists; b) the arrival of new entrants into the industry as for example universities starting publishing the electronic versions of the journals themselves; c) the new electronic intermediaries, that could lead to disintermediation especially of the physical distributors, printers and binders. The article concludes that some intermediaries of the marketplace, for example the sales agents, are starting re-engineering for electronic commerce, as a result of the potential threat from the electronic-only intermediaries, thus operating both in the marketplace and in the marketspace. The third article, ?What is the Business Value of Electronic Commerce? How can it be optimized?? has been presented at the MICT (Management of Information and Communication Technology) conference, Copenhagen, 14-17 September 1999, forthcoming in an international anthology entitled ?e-commerce and Intelligent Management?, S. Junghagen, K. Friedman, J. Olaisen (Eds.). This article presents a business value complementarity model of electronic commerce, which is a generalization of the model developed in article 1. This model is based on the value chain analysis and the business value complementarity theory. It can be used as a methodology for strategy formulation in the adoption process of electronic commerce in a corporation. The main idea of this model is that it is important to explore complementarities between different activities of the value chain, the corresponding business processes and the supporting technologies when re-engineering for on-line commerce. The exploration of these complementarities should lead to a ?better? strategy formulation, to the maximization of the business value of electronic commerce to the corporation and to a ?better? system design. To conclude, I think that this thesis is only a small building block towards the understanding of consumer-oriented Internetbased electronic commerce as a technological innovation spreading into the social system, and its implications for industries and corporations. Further research should be conducted to study for example the implications of consumeroriented electronic commerce for other industries producing digital products and for service industries. Interesting items for further research could also be in depth-case studies of corporations that have re-engineered some or, in the future, all the business processes for on-line commerce