Developments and Development Directions of Electronic Trade Platforms in US and European Agri-Food Markets: Impact on Sector Organization

Table 4: Emerging Platform Models and Stra

egic Advantages___________________

Platform
models
(Fritz, Hausen,
Schiefer 2003)

Characteristics

(Fritz, Hausen, Schiefer 2003)

Strategic advantages

“Neutral
verticals”

• Neutral ownership

• Along whole chain

• Worldwide

• Cooperation with otherETS

• Sellerbuyer nm

(n>>mnι<<m)

• Transaction support

• Static coordination
Mechanism

• Mixed coordination
Mechanism

• Fee for transaction____________

• Market maker in spot markets
(neutrality generates trust; see Bailey,
Bakos 1997)

• Market organization and coordination

• Aggregation and bundling

“Downstream re-
inter-mediaries”

• Fee time-based

• Single market participant

• Agrifoodproducts in general

• Stage specific

• Bottom-up

• Sellerbuyernm (n>>m;n<<m)

• Static coordination mechanism

• Combination of market expertise and
existing business relationships with
efficiency potential of electronic
commerce

“Ag output sub-
sectorials”

• Specific products only

• Fee for transaction

• Stage specific

• Mixed coordination mechanism

• Specialization

“Large consortia”

• Non-food products

• Consortium

• Supply chain management

• Agrifoodproducts in general

• Bottom-up

• Cooperation with other ETS

• Sellerbuyernm (n>>m;n<<m)

• Dynamic coordination
mechanism

• Mixed coordination mechanism

• Efficiency advantages due to joint
technology development (outsourcing)

• Critical mass of platform participants
to be reached more quickly

• Market power as supported by group of
existing industry players

• Acts according to members’ interests

• Elimination of competitors

• Strengthens members compared to
non-members

• Combination of market expertise and
existing business relationships with
efficiency potential of electronic
commerce

• Example from other industries:
Covisint (consortium platform, car
manufacturers)_____________________