Strategic benefits to SMEs from third party web services: An action research analysis

Prior research provides evidence that large organizations can derive strategic benefits from developing new applications with web services. This research contributes to the literature by demonstrating that small and medium enterprises (SMEs) can derive strategic benefits from using publicly available web services, and that SMEs may be best able to take advantage of the inexpensive, user friendly third party web services that are emerging. In this paper we describe how one small golf retailer used web services to achieve strategic benefits including higher profit margins and better competitive positioning relative to a large competitor. Specifically, action research methods were used to devise and implement an innovative strategy for applying the web services offered by eBay in tandem with web services offered by related third party companies. The business and IT strategies, first year results, and key success factors are described followed by a discussion of the generalizability of the strategies employed. In conclusion, possible directions for future research are discussed.