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



M. Fritz, et al. / International Food and Agribusiness Management Review Volume 7, Issue 1, 2004

buying, and servicing of products could be supported by Internet-based ‘electronic
trade platforms’ (ETPs) (Schiefer, 2000), i.e., electronic trade support systems that
match vendors and buyers, intermediate trading transactions up to contract
conclusion, and provide the institutional infrastructure that is in line with the legal
and technical environment (Bakos, 1998, Kaplan, Sawhney, 2000).

The emergence of electronic trade platforms is closely linked with the dynamic
Internet developments during the period known as ‘New Economy’ that reached its
peak in the year 2000. Platform applications developed in all sectors of the economy,
including the agri-food sector, and their general acceptance as the primary support
base for trade-related activities seemed to be imminent. However, acceptance has
been much lower than expected and the development paths of electronic trade
platforms were not as straightforward as initially envisaged.

The agri-food sector is no exception. With a view on the discrepancy between
expectations on potentials of electronic trade platforms and actual developments, it
is the objective of the paper to gain some understanding of the development
directions of trade platforms and their interaction with the agri-food sector to better
utilize the support potential of electronic trade platforms in the future. Observed
changes in electronic platform infrastructures allow a first analysis of the situation
and possible development directions of platforms and a possible impact on the agri-
food sector’s organization. This is especially true for the US and Europe where the
majority of electronic trade platforms were located and engaged in the year 2000.
Specifically, the paper analyzes developments in electronic trade platform
infrastructures in the agri-food sector of the US and Europe between 2000 and
2002, identifies development strategies of successful platforms, and discusses
emerging consequences and implications for the organization of the agri-food sector.
The analysis covers food supply chains from agriculture to the retail sector and
integrates different product lines. This allows for considering trade platforms that
offer their services at different stages of the supply chain and engage in trade
support for different product lines simultaneously.

The paper introduces into the subject through an overview discussion of the general
food supply chain infrastructure and its link with electronic trade platforms, the
direction and type of analysis with its corresponding database, and the framework
used for the analysis (section 2). The following sections discuss the results of the
analysis regarding developments in the electronic trade platform infrastructure in
the agri-food sector of the US and Europe between 2000 and 2002 (section 3) and
the identification of development strategies of successful platforms (section 4). The
paper concludes with a discussion of emerging implications from electronic trade
platform development strategies for the future organization of the agri-food sector
(section 5).

© 2004 International Food and Agribusiness Management Association (IAMA). All rights reserved.



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