Endgame : Optimal selling strategies in online auctions
- Authors: Knox, Ian , Lynch, David
- Date: 2007
- Type: Text , Conference paper
- Relation: Paper presented at 4th International AGSE Entrepreneurship Research Exchange : Regional Frontiers of Entrepreneurship Research 2007, Brisbane Graduate School of Business, Queensland University of Technology, Queensland : 6th-9th February 2007
- Full Text:
- Description: Principal Topic: Online auctions have emerged as a major opportunity for individuals to start businesses or for established businesses to diversify and grow their markets. To-date, research interest has focused largely on the technological entrepreneur rather than the Internet based (cyber) entrepreneur. The aim of this study was to examine the behaviour of participants in online auctions, measuring their response to actual market conditions and rules. Do online markets react to quality uncertainly (Akerlof, 1970) in the same way as off line markets, and is the contention that Internet shopping emphasises cost reduction over brand-based differentiation (Pine and Gilmore, 1999) valid? The purpose of this paper is to present findings from an analysis of secondary data collected from online auctions. By better understanding buyer behaviour in online auctions, sellers will be able to select the best selling strategies for individual and/or unique businesses types. Methodology/Key Propositions: With the cooperation of an existing online book seller, the study examined three main auction-start pricing strategies; fully priced, cost priced and below cost priced. Auction duration and postage cost were also varied and the combined effects on buyer behaviour established. Data from 1,200 auctions was provided for the study. While the study primarily took an empirical approach, a combination of quantitative and qualitative methods were used as information asymmetries play an important role in online auctions for both buyers and sellers. Subjective opinions of optimal selling strategies were gathered from online discussion boards, to allow comparisons to be made between auction user perceptions and measured auction outcomes. Results and Implications: Even within disparate product categories the study found that optimal selling strategies are predictable. The mix of start price, auction duration and postage cost, effects product sale price in a manner that indicates the desirability of high start pricing. In the rapidly evolving online auction marketplace there is a need for ongoing evaluation of buyer preferences to aid seller pricing strategies. Contrary to the findings of earlier Internet auction studies that focused on cost reduction as primary buyer motivators, this study found that buyers are drawing on a wide range of experiential value sources. Average selling prices on auction sites may actually have increased, although it is acknowledged that some product category prices may have fallen due to over supply. Auction selling management will become increasingly important.
- Description: 2003005186
- Authors: Knox, Ian , Lynch, David
- Date: 2007
- Type: Text , Conference paper
- Relation: Paper presented at 4th International AGSE Entrepreneurship Research Exchange : Regional Frontiers of Entrepreneurship Research 2007, Brisbane Graduate School of Business, Queensland University of Technology, Queensland : 6th-9th February 2007
- Full Text:
- Description: Principal Topic: Online auctions have emerged as a major opportunity for individuals to start businesses or for established businesses to diversify and grow their markets. To-date, research interest has focused largely on the technological entrepreneur rather than the Internet based (cyber) entrepreneur. The aim of this study was to examine the behaviour of participants in online auctions, measuring their response to actual market conditions and rules. Do online markets react to quality uncertainly (Akerlof, 1970) in the same way as off line markets, and is the contention that Internet shopping emphasises cost reduction over brand-based differentiation (Pine and Gilmore, 1999) valid? The purpose of this paper is to present findings from an analysis of secondary data collected from online auctions. By better understanding buyer behaviour in online auctions, sellers will be able to select the best selling strategies for individual and/or unique businesses types. Methodology/Key Propositions: With the cooperation of an existing online book seller, the study examined three main auction-start pricing strategies; fully priced, cost priced and below cost priced. Auction duration and postage cost were also varied and the combined effects on buyer behaviour established. Data from 1,200 auctions was provided for the study. While the study primarily took an empirical approach, a combination of quantitative and qualitative methods were used as information asymmetries play an important role in online auctions for both buyers and sellers. Subjective opinions of optimal selling strategies were gathered from online discussion boards, to allow comparisons to be made between auction user perceptions and measured auction outcomes. Results and Implications: Even within disparate product categories the study found that optimal selling strategies are predictable. The mix of start price, auction duration and postage cost, effects product sale price in a manner that indicates the desirability of high start pricing. In the rapidly evolving online auction marketplace there is a need for ongoing evaluation of buyer preferences to aid seller pricing strategies. Contrary to the findings of earlier Internet auction studies that focused on cost reduction as primary buyer motivators, this study found that buyers are drawing on a wide range of experiential value sources. Average selling prices on auction sites may actually have increased, although it is acknowledged that some product category prices may have fallen due to over supply. Auction selling management will become increasingly important.
- Description: 2003005186
Market entry strategy into China by entrepreneurial new venture firms
- Authors: Wan, Stephen , Lowe, Julian
- Date: 2007
- Type: Text , Conference paper
- Relation: Paper presented at 4th International AGSE Entrepreneurship Research Exchange : Regional Frontiers of Entrepreneurship Research 2007, Brisbane Graduate School of Business, Queensland University of Technology, Queensland : 6th-9th February 2007
- Full Text:
- Description: Principal Topic: This paper examines the entry strategy and start-up of a technology based small firm entering the China market through the vehicle of a joint venture company. The research deals with two main issues: - The intersection of the entrepreneurship and internationalization literatures - The specific considerations pertinent to foreign companies operating in China The internationalization of entrepreneurship theory has been the subject of ’special issues’ in the journals Entrepreneurship in Theory and Practice (1996); and Academy of Management Journal (2000). It has its roots in the seminal work of McDougal and Oviatt (1996, 2005). Much of this literature identifies internationalization as an important determinant of performance in SMEs, and emphasizes the specific factors that link entrepreneurial perspectives and the processes of internationalization. Mode of entry choice is dominated by a number of complementary paradigms in the international business literature. These include the ’stage’ or sequential approach proposed by the Uppsala group (Johanson and Widersheim-Paul, 1975); network theory (Chen and Chen, 2002); transaction cost economics (Buckley and Casson 1976); and the resource based view (Peng, 2001). China as an international market, supplier and collaborator has changed radically since 1982, following the Deng reforms. It is now the third largest economy in the world but despite its promise has also proved a problematic partner for Western firms. Since its entry into the WTO there have been significant changes but the culture and practice of doing business in China has proved a problem. This research examines how an SME can participate in this market without incurring very high costs and risks. Methodology/Key Propositions: With some exceptions (Jolly, 1992) the issue of SME entry strategies has not received a great deal of attention in the literature. In addition Mcdougall and Oviatt, (2003) challenge the notion that the theories of market entry that dominate the international business literature are applicable to the smaller firm. Our research approach is two-fold: - An examination of Chinese government statistics to identify the distribution by industry and firm type of FDI by SMEs in China - A case study of a technology based SME that has established a successful joint venture in Northern China. We use the secondary data to examine the conventional (large firm) propositions of the international business literature; we use the case study to examine how the specific entrepreneurial and China element require a modified perspective. Results and Implications: Whilst some research has suggested that internationalization is a problematic strategy for SMEs we find that even in a high risk market like China, these companies have struck up effective but non - conventional organizational forms. The network theory of internationalization seems the dominant paradigm, although our case study introduces some specific considerations that the model had not previously acknowledged.
- Description: 2003005182
- Authors: Wan, Stephen , Lowe, Julian
- Date: 2007
- Type: Text , Conference paper
- Relation: Paper presented at 4th International AGSE Entrepreneurship Research Exchange : Regional Frontiers of Entrepreneurship Research 2007, Brisbane Graduate School of Business, Queensland University of Technology, Queensland : 6th-9th February 2007
- Full Text:
- Description: Principal Topic: This paper examines the entry strategy and start-up of a technology based small firm entering the China market through the vehicle of a joint venture company. The research deals with two main issues: - The intersection of the entrepreneurship and internationalization literatures - The specific considerations pertinent to foreign companies operating in China The internationalization of entrepreneurship theory has been the subject of ’special issues’ in the journals Entrepreneurship in Theory and Practice (1996); and Academy of Management Journal (2000). It has its roots in the seminal work of McDougal and Oviatt (1996, 2005). Much of this literature identifies internationalization as an important determinant of performance in SMEs, and emphasizes the specific factors that link entrepreneurial perspectives and the processes of internationalization. Mode of entry choice is dominated by a number of complementary paradigms in the international business literature. These include the ’stage’ or sequential approach proposed by the Uppsala group (Johanson and Widersheim-Paul, 1975); network theory (Chen and Chen, 2002); transaction cost economics (Buckley and Casson 1976); and the resource based view (Peng, 2001). China as an international market, supplier and collaborator has changed radically since 1982, following the Deng reforms. It is now the third largest economy in the world but despite its promise has also proved a problematic partner for Western firms. Since its entry into the WTO there have been significant changes but the culture and practice of doing business in China has proved a problem. This research examines how an SME can participate in this market without incurring very high costs and risks. Methodology/Key Propositions: With some exceptions (Jolly, 1992) the issue of SME entry strategies has not received a great deal of attention in the literature. In addition Mcdougall and Oviatt, (2003) challenge the notion that the theories of market entry that dominate the international business literature are applicable to the smaller firm. Our research approach is two-fold: - An examination of Chinese government statistics to identify the distribution by industry and firm type of FDI by SMEs in China - A case study of a technology based SME that has established a successful joint venture in Northern China. We use the secondary data to examine the conventional (large firm) propositions of the international business literature; we use the case study to examine how the specific entrepreneurial and China element require a modified perspective. Results and Implications: Whilst some research has suggested that internationalization is a problematic strategy for SMEs we find that even in a high risk market like China, these companies have struck up effective but non - conventional organizational forms. The network theory of internationalization seems the dominant paradigm, although our case study introduces some specific considerations that the model had not previously acknowledged.
- Description: 2003005182
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