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Pergamon

European Management Journal Vol. 21, No. 4, pp. 421–437, 2003  2003 Elsevier Ltd. All rights reserved.
Printed in Great Britain
doi:10.1016/S0263-2373(03)00080-X
0263-2373 $30.00 + 0.00

Internet-Business or Just
Business?
Impact of ‘InternetSpecific’ Strategies on
Venture Performance
VANGELIS SOUITARIS, Imperial College, London
MARCEL COHEN, Imperial College, London
This study examines the relationship between 21
‘internet-specific strategies’ and the performance of
internet-trading ventures. ‘Internet-specific strategies’ are defined as business strategies specifically relevant in the internet-trading context. They were
proposed mostly by practitioner-oriented exploratory literature, based on case studies of leading dotcoms. Does the application of such strategies increase performance for the bulk of the new ventures (dot.coms and new divisions of large companies) trading on the internet? The results of

a large survey of 406 internet ventures in the UK
were quite controversial. Despite the fact that we
have found statistically significant correlations
between the majority of ‘internet-specific strategies’
and venture performance in at least one industrial
sector, the coefficients were weak and the
regression model proved statistically insignificant.
This raises questions over the validity of practitioner-led theories about internet business. Business on the internet might be just business.  2003 Elsevier Ltd. All rights reserved.
Keywords: Internet ventures, Internet-specific strategies, Drivers of performance

Introduction
The internet is an extremely important new technology, and it is no surprise that it has received so European Management Journal Vol. 21, No. 4, pp. 421–437, August 2003

much attention from entrepreneurs, executives,
investors and business observers (Porter, 2001). Internet-trading ventures represent one of the largest segments of new start-up and incidences of corporate entrepreneurship in the US (Galbi, 2001). However,

many internet ventures are also failing at a high rate
(Dussart, 2000) and hence, a greater understanding of
the determinants of performance on internet-trading
ventures is needed.
Despite the recent growth in electronic commerce,
academic literature on the impact of internet trading
is still limited and there are very few studies based
on rigorously tested empirical data (Hamill and Gregory, 1997; Berthon et al., 1998; Griffin, 2000; Stonham, 2001). Whilst extensive studies have been done on the determinants of new venture performance (for

an excellent overview see Chrisman et al., 1999), the
authors do not know of many works to date that
address empirically either ‘established’ in the literature or ‘emerging’ drivers of performance for new ventures trading on the internet.
This study seeks to test empirically the relationship
between emerging ‘internet-specific strategies’ and
performance of internet-trading ventures. ‘Internetspecific strategies’ are defined as business strategies, specifically relevant in the internet-trading context.
The definition incorporates mainly new and revolutionary ways of doing business enabled by the new technology and trading medium (such as price customisation and price negotiation) but also includes 421

INTERNET-BUSINESS OR JUST BUSINESS?

some more ‘established’ marketing strategies with a
proposed ‘enhanced’ role in the internet-trading
environment (such as building a reputable brand).
The variables are drawn from exploratory practitioner-oriented literature on the new phenomenon and are then confirmed by the managerial intuition
of a class of 196 MBA candidates.
The research aims to contribute to two different
literature streams. The main potential contribution is
to the emerging e-commerce literature, being one of
the first empirical studies to rigorously test new practitioner-driven ideas. Also, we aim to contribute to the already established strategy literature on drivers
of venture...
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