Developing dynamic capabilities in electronic marketplaces: A cross-case study

Business-to-business (B2B) electronic marketplaces (EMPs) have increased the efficiency and economy of business purchasing by bringing together a critical mass of organizations that buy and sell goods and services. While many studies have investigated mature EMPs and identified factors leading to their success and failure, few studies have investigated the capabilities necessary to develop successful EMPs. This research shares findings from in-depth case studies of two EMPs conducted over a 3-year period. Using the dynamic capabilities framework as a theoretical lens, this paper: (1) identifies the capabilities necessary to develop EMPs that generate and sustain participant contributions, and (2) discusses how to develop these capabilities. This study finds that the cultivation of a “trial-and-error” culture along with sales managers’ activities played key roles in developing outside-in and spanning capabilities. Taken together these capabilities helped the successful EMP develop entrepreneurial alertness and customer agility, two capabilities that were not developed in the failed EMP. These findings extend dynamic capabilities theory and may help practitioners better develop two-sided networks, such as EMPs, that require a critical mass of buyers and sellers.