Skip to Main Content
HBS Home
  • About
  • Academic Programs
  • Alumni
  • Faculty & Research
  • Baker Library
  • Giving
  • Harvard Business Review
  • Initiatives
  • News
  • Recruit
  • Map / Directions
Faculty & Research
  • Faculty
  • Research
  • Featured Topics
  • Academic Units
  • …→
  • Harvard Business School→
  • Faculty & Research→
Publications
Publications
  • January 2001
  • Background Note
  • HBS Case Collection

Online Brokers

By: Thomas R. Eisenmann and Alastair Brown
  • Format:Print
  • | Pages:15
ShareBar

Abstract

Describes online brokers, companies that use the Internet to help clients identify prospective trading partners and sometimes help their clients complete transactions. First, summarizes the various ways that online brokers create value for their clients. Then analyzes the economic model for online brokers, focusing on their revenue and cost drivers. Building on that analysis, the next section examines the payoff to online brokers from pursuing aggressive growth strategies. Delineates the differences between and advantages of being a broker versus a retailer or a market maker, and explores some of the strategic challenges facing offline brokers as they move their businesses online, e.g., the risk of self-cannibalization and the threat of disintermediation by clients. Explores the value proposition offered by these companies and the economic imperatives they face. Finally, seeks to provide a framework to evaluate whether the adoption of aggressive growth strategies is prudent for online brokers.

Keywords

Business Model; Web Services Industry

Citation

Eisenmann, Thomas R., and Alastair Brown. "Online Brokers." Harvard Business School Background Note 801-307, January 2001.
  • Educators
  • Purchase

About The Author

Thomas R. Eisenmann

Entrepreneurial Management
→More Publications

More from the Authors

    • January 2021
    • Faculty Research

    YogaSmoga

    By: Thomas R. Eisenmann and Olivia Graham
    • 2020
    • Faculty Research

    Determinants of Early-Stage Startup Performance: Survey Results

    By: Thomas R. Eisenmann
    • August 2020
    • Faculty Research

    Updating Dating

    By: Scott Duke Kominers, Thomas R. Eisenmann and Alan Lam
More from the Authors
  • YogaSmoga By: Thomas R. Eisenmann and Olivia Graham
  • Determinants of Early-Stage Startup Performance: Survey Results By: Thomas R. Eisenmann
  • Updating Dating By: Scott Duke Kominers, Thomas R. Eisenmann and Alan Lam
ǁ
Campus Map
Harvard Business School
Soldiers Field
Boston, MA 02163
→Map & Directions
→More Contact Information
  • Make a Gift
  • Site Map
  • Jobs
  • Harvard University
  • Trademarks
  • Policies
  • Digital Accessibility
Copyright © President & Fellows of Harvard College