Making Markets: How Firms Can Design and Profit from Online Auctions and Exchanges [Hardcover]

Ajit Kambil (Author), Eric Van Heck (Author), E. Van Heck (Author)

Book Description

Publication Date: June 24, 2002

Markets are transitioning from place to space - but as the collapse of the initial B2B boom demonstrated, the journey won't be easy. Pioneering market makers from eBay and British Petroleum to the Dutch Flower Auctions and ChemConnect are leading the way to create new value through markets. Their experiences make two things increasingly clear: success in the marketspace will require new ways of operating, and participation won't be optional. Ajit Kambil and Eric van Heck - respected authorities on electronic markets - argue that online auctions and exchanges will soon be an essential part of business practice. They explain why companies must adopt electronic markets now if they hope to compete in the future. And they prove that success lies not in achieving "first-mover" advantage in new markets, but in creating winning strategies to design and use markets to manage the supply chain, connect with customers, increase efficiency, and make decisions.Based on the authors' decade-long study of nearly one hundred successful and failed electronic markets in the United States, Europe, and Asia, the book reveals how market makers are rewriting the rules of commerce. They offer a strategic blueprint for designing, implementing, and profiting from electronic markets. "Making Markets" shows how companies can: creatively use markets in procurement, resale, and clearance, and in more novel applications such as prediction, risk management, and decision making; design, deploy, and stimulate the successful adoption of online auctions and exchanges; utilize technology to support - not replace - human interaction; leverage information to become more profitable buyers and sellers; innovate in trade processes from pricing, payment, and authentication to logistics and product representation; and, grow markets through partnerships, alliances, and mergers.This highly practical guide will help companies create the ultimate market: one that captures the feel and trust of a physical community but leverages the power and efficiency of technology to benefit all participants. Ajit Kambil is Associate Partner and Senior Research Fellow at Accenture's Institute for Strategic Change. Eric van Heck is a Professor at Erasmus University's Rotterdam School of Management, The Netherlands.

Editorial Reviews

From the Back Cover

"Making Markets provides an extremely readable, comprehensive, and intuitive account of the different kinds of auctions, exchanges, and price discovery mechanisms. It also offers insights into when electronic markets are apt to succeed or fail. I highly recommend this book. It has already helped me see the world differently."

-John Seely Brown, former Director, Xerox Palo Alto Research Center (PARC) and coauthor of The Social Life of Information

"This book is an up-to-date, realistic assessment of the potential gains and pitfalls of electronic markets. It is a very provocative guide to how to profit from auction and exchange technologies."

-Glen L. Urban, David Austin Professor of Management and Dean Emeritus, Sloan School of Management, Massachusetts Institute of Technology and Codirector, Center for eBusiness@MIT

"The Internet has had a significant impact on the way business is conducted and the way supply chains work and interact. Kambil and van Heck provide an insightful look at this impact and how it is evolving. A must-read for anyone interested in electronic business and the supply chain, Making Markets describes how businesses can concretely leverage the power of the B2B market."

-Hau L. Lee, Professor of Operations, Information, and Technology, Stanford University Graduate School of Business

"Executives know that their businesses function in the 'marketplace,' but few really understand the mechanisms of markets. In Making Markets, Kambil and van Heck decode the important architectural elements of markets and present them clearly and succinctly. Making Markets provides executives with a tool kit for contemplating participation in markets of any kind, whether physical or virtual."

-Mark Resch, President and CEO, CommerceNet

About the Author

Ajit Kambil is Associate Partner and Senior Research Fellow at Accenture's Institute for Strategic Change.

Product Details

• Hardcover: 240 pages
• Publisher: Harvard Business Review Press (June 24, 2002)
• Language: English
• ISBN-10: 1578516587
• ISBN-13: 978-1578516582
• Product Dimensions: 9.5 x 6.3 x 1 inches
• Shipping Weight: 1.2 pounds (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #875,489 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

4 of 4 people found the following review helpful:

5.0 out of 5 stars A Must Read, October 21, 2002

By 

David Brett (New Westminster, British Columbia Canada) - See all my reviews
(REAL NAME)   

This review is from: Making Markets: How Firms Can Design and Profit from Online Auctions and Exchanges (Hardcover)

Ajit Kambil and Eric van Heck have written an authoritative and highly readable book illuminating the much-misunderstood world of online auctions. In clear, simple prose, the authors explain that the initial excitement over online markets was not all dot.com reverie and new economy hubris. Given that offline markets such as the Dutch flower auctions have thrived for centuries, it stands to reason that online markets will succeed to the extent that they improve on existing markets. “As you will read in subsequent pages, human beings have always made markets, and they will continue to do so in the future- even if business is conducted through cyberspace.” Kambil and van Heck cut through the technical jargon all to common in “eBusiness” books, and elucidate very effectively why people participate in markets. They write: “…electronic markets are not technological interactions supported by humans. They are human interactions supported by technology.” This quote exemplifies why this book is not just another poorly cobbled together ebiz how-to; it is a book about understanding how we will buy and sell in the future and how managers can avoid the outrageously expensive mistakes of the past few years.

Success stories such as eBay and lesser-known eMarkets such as PartMiner are dissected to reveal what they did right, while spectacular flameouts such as Chemdex are shown to have lacked important ingredients for a good e-market recipe. There is a very good section dealing with how e-markets should be categorized which helps make sense of the galaxy of initiatives underway. There is a very insightful section on Knowledge Markets and how auctions for intangibles could become an important wave of future online commerce. All and all a great read and highly recommended.

David Brett, CEO and Founder, Knexa.com

3 of 3 people found the following review helpful:

5.0 out of 5 stars Frontier Learning, September 28, 2002

By 

Roger E. Herman (Greensboro, NC USA) - See all my reviews
(REAL NAME)   

This review is from: Making Markets: How Firms Can Design and Profit from Online Auctions and Exchanges (Hardcover)

Yes, Virginia, there are still frontiers to be explored and conquered. The internet is a very active place, but still full of exciting opportunities. Feeling entrepreneurial or adventurous? You can create your own market on the net. The authors suggest that the future of exchange of products, services, and payment will accelerate in cyberspace. While the opportunities abound, there is a lot to learn . . . and there are risks. But, that's why you read a book like "Making Markets."

First, some perspective. The authors emphasize that "electronic markets are not technological interactions. They are human interactions supported by technology." Ignore this principle and failure awaits you in the way it doomed the electronic markets in the 1990s. "Cyberspace markets cannot be thin replicas of the traditional market. Rather they must be as rich, complex, and compete as the traditional markets themselves." The basic trade processes of search, pricing, logistics, payment and settlement, and authentication must still be in place. Value must be created for all participants, and the electronic marketing venture must fit with the firm's other marketing vehicles. Creativity will have a significant influence on success.

The authors begin with an explanation of the opportunities, the value of marketing in cyberspace. The first chapter includes an explanation of the design of their presentation in the remaining seven chapters. Chapter titles give us an insight into the content: From Place to Space, Making Markets Work, and Auctions: The Devil is in the Details. Readers will learn about Using B2B markets in the Supply Chain, Using Markets Creatively, and Market Tactics. Dynamic Market Strategies are address in the final chapter, followed by a call to action encouraging you to stick your toes in the water and try this approach.

Each chapter is filled with education, insight, and mini-case studies to show us what has worked and what hasn't worked. You'll learn the jargon and the steps in the process. A good notes section, including website addresses, is complemented by a helpful index. And, expectedly, the authors offer a website for the book where more information and support is available. If you're ready to open your mind to some fascinating possibilities, curl up with "Making Markets."

3 of 3 people found the following review helpful:

5.0 out of 5 stars Making Markets by Ajit Kambil and Eric van Heck, August 15, 2002

By 

Victor Long (San Francisco, CA USA) - See all my reviews

This review is from: Making Markets: How Firms Can Design and Profit from Online Auctions and Exchanges (Hardcover)

As an entrepreneur and venture investor, I've found Making Markets invaluable because it's an excellent analytical framework for thinking about and creating markets. What is especially valuable is their Process/Stakeholder Benefit Framework which is elegantly simple yet so useful. I personally use that framework in examining various business models.

I highly recommend this book!