Value creation in e-business

We explore the theoretical foundations of value creation in e-business by e xamining how 59 American and European e-businesses that have recently becom e publicly traded corporations create value. We observe that in e-business new value can be created by the ways in which transactions are enabled. Gro unded in the rich data obtained from case study analyses and in the receive d theory in entrepreneurship and strategic management, we develop a model o f the sources of value creation. The model suggests that the value creation potential of e-businesses hinges on four interdependent dimensions, namely : efficiency, complementarities, lock-in, and novelty. Our findings suggest that no single entrepreneurship or strategic management theory can fully e xplain the value creation potential of e-business. Rather, an, integration of the received theoretical perspectives on value creation is needed. To en able such an integration, we offer the business model construct as a unit o f analysis for future research on value creation in e-business. A business model depicts the design of transaction content, structure, and governance so as to create value through the exploitation of business opportunities. W e propose that a firm's business model is an important focus of innovation and a crucial source of value creation for the firm and its suppliers, part ners, and customers. Copyright (C) 2001 John Wiley & Sons, Ltd.