Analyzing the Success Drivers of e-Business Companies

Abstract

Although there is a growing amount of theoretical literature, only limited attention has been allocated to empirically determine the relative influence of a broad set of strategic success factors of e-business companies across several industries. We concentrate on the impact of marketing strategies and chosen business models and differentiate between direct and indirect drivers on revenue and profitability in order to estimate the total effect of a certain strategy or business model. Based on a survey of 147 e-businesses from different industries we empirically test, with the help of seemingly unrelated regression models, the relative importance of the various strategy elements. Our estimation results show that business models where the firm profits from transactions (e.g., via fixed access or usage fees) and is able to sell pricy products and services are well suited to reach profitability. The by far most important element of the marketing strategy is the achieved customer satisfaction, which has a significant and strong effect on revenue, but only a moderate direct effect on profitability. Due to our modeling approach we find that the total elasticity of this element of the marketing strategy is driven by the indirect effect from revenue on profitability