Internet, Internationalisation and Customer Value Creation - the Case of Medical Information on the Internet

Internet, Internationalisation and Customer Value Creation - The Case of Medical Information On the Internet

Introduction

During the late 1990s, when the Internet became widely used and accessible, it was something like a Klondike period for web-based business. There was an entrepreneurial spirit to question much of the established business and industry logic made possible by the technology and a rich supply of venture capital. Many new business ventures were launched aimed at selling and supporting software, hardware, infrastructure and service providing for the operation and utilisation of the Internet itself. New companies, initially and later also the established and traditional companies, were experimenting with the electronic business, as attempts to use the Internet as a channel for distribution of products, as a new channel for market communication and reaching out to new markets. Since the digital economy was about to develop there was an idea that there was only room for one industry-leader in each industry. The concepts of positive feed-back and the winner takes it all (see, e.g. Shapiro & Varian, 1999) pushed many of the ventures to aim at several national markets, and even the world-market, already from the beginning. Hence, the business concepts at the time favoured an international launch. We also witnessed a type of business that combined several offers and value propositions into a package made accessible on the Internet, at times the businesses also sought revenues from a variety of sources.

These businesses were mushrooming in almost any sector and they all signalled a revolutionary spirit to the established industry and way of doing business. One of the more successful examples of a consumer-oriented electronic marketplace is E-bay, serving as an on-line auction for almost any product. A striking example of a failure was Boo.com that aimed at being a shopping mall for fashion garments made available worldwide. Amazon.com, the virtual book-store that has become the somewhat virtual shopping-mall, is an example of a Internet-based venture that has been searching a long time for its core business. On the industrial market side Endorsia.com is an example of a forward supporting venture linking several industrial goods providers with the a large number of distributors worldwide. The big three US-automakers formed Covicint to combine efforts and form a single global business-to-business supplier exchange for coordination of the automation industry supply side. These ventures may be called e-portals, e-commerce exchanges or e-marketplaces (c.f., European Commission).

During the early days of these new Internet ventures we saw both new entrepreneurial attempts and existing industry members that experimented with developing Internet-based ventures. There were apparently various situations where Internet-based coordination between companies was present and affecting both the coordination of each venture as well as industries at large. Three important dimensions of industrial and market development were at hand: Firstly, the creation of new Internet ventures emerged in an international context. Secondly, they were linked to new forms of value creation processes for the users and customers. Lastly, they often required new forms of cooperation between established and new companies. This chapter puts focus on these three inter-related dimensions of new Internet ventures.

Prior Research and Theoretical Emphasis

Early research on new Internet ventures had a tendency to focus the empirical interest on physical goods and the infrastructure industry supporting the Internet and less attention to informational contents industries and service outputs as exchange objects of the business ventures. There also seemed to be a lot of research emphasis put on the structuring of internal organisation, the company prerequisites for success, contractual channel arrangements, and a market optimising perspective. Less attention was put on the core market exchange and its value constellation setting. There also seemed to be less attention directed to the organisational and inter-organisational processes underlying the new Internet-based ventures and the formational processes of the ventures.

The early theoretical explanations of these IT supported developments were, at the time, typically focusing on a set of theoretical issues. One line of thinking was the Porterian competitive strategy explanation, stating that existing companies could strengthen their competitive advantage with IT (Porter & Millar, 1985). Another field of theory was based on the transaction cost theory explanations to the business use of IT (see e.g. Malone et. al., 1987, Brynjolfsson & Smith, 2000). The technology-supported ventures could bypass middlemen and other costly