A causal network analysis of e-market business models

Abstract The proliferation of e-market (EM) business models has been a major interest to academics and practitioners alike. Yet gaining profits from EMs has been a challenge, with many business models proving to be flawed and unsustainable. The failure of EMs has focused attention on the business models that generate revenues for the firm and add value to the customer. Defining and delineating the key constructs and variables pertaining to EM business models is difficult, yet important for understanding causal relationships leading to successful business performance. This research study focuses upon the development of EMs in four UK firms using the constructs: business model, market conditions, and user acceptance. From structured interviews with executives, data is collected on the EM business models, which is analysed using process decomposition diagrams. A causal network analysis identifies the relationships between antecedent, intervening and outcome variables, which influence business performance from the EMs. An EM paradox model is developed to depict declining revenues and margins due to the failure of EMs to capitalize on differentiated markets or the benefits they bring to buyers. EM business performance is influenced by technological and customer turbulence, as well as competitive intensity. Acceptance of technology acts as an important partial moderator to business performance.