An Optimal Strategic Business Model for Small Businesses Using Online Platforms

As ecommerce continues to grow, small businesses are using a variety of platforms to secure potential consumers. However, it is important for small business owners to choose an efficient business model because of constraints such as technical problems. In this study, based on platform characteristics we divide online shopping platforms into different types as follows: (1) information brokerage services; (2) online malls; and (3) omni-channel platforms. The efficiency of each group is measured by stochastic frontier analysis, and the efficiency comparison between the groups is made using meta-frontier analysis. As a result of the study, it is found that the efficiency of small business owners increases as functional integration increases, satisfying utilitarian motivations. However, a platform with greater integration that has a social presence satisfying hedonic motivations improves the efficiency of all small businesses using the platform instead of just the efficiency of a marginal number of small business owners. This study, based on the dynamic capabilities viewpoint, suggests that the omni-channel platform represents the most sustainable approach for small business owners undergoing difficulties such as technological and organizational changes.