Association for Information Systems Association for Information Systems AIS Electronic Library (AISeL) AIS Electronic Library (AISeL) BLED 2019 Proceedings BLED Proceedings 2019 Traditional Businesses in the Sharing Economy: Critical Success Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites Factors and Prerequisites Julia Schmid, Uwe Leimstoll Follow this and additional works at: https://aisel.aisnet.org/bled2019 This material is brought to you by the BLED Proceedings at AIS Electronic Library (AISeL). It has been accepted for inclusion in BLED 2019 Proceedings by an authorized administrator of AIS Electronic Library (AISeL). For more information, please contact elibrary@aisnet.org. https://aisel.aisnet.org/ https://aisel.aisnet.org/bled2019 https://aisel.aisnet.org/bled https://aisel.aisnet.org/bled2019?utm_source=aisel.aisnet.org%2Fbled2019%2F30&utm_medium=PDF&utm_campaign=PDFCoverPages mailto:elibrary@aisnet.org%3E 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY JUNE 16 – 19, 2019, BLED, SLOVENIA, CONFERENCE PROCEEDINGS A. Pucihar (ed. et al.) Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites JULIA SCHMID & UWE LEIMSTOLL Abstract The sharing economy emerged as an alternative way to earn or save money during the financial crisis. Customers started to share underused products for a small fee. This trend is projected to grow over the next years. Not only is the market volume rising, but also the customers' willingness to use it. Projections indicate that traditional businesses will lose customers as well as market share. Hence, this paper tries to understand why traditional businesses should consider the sharing economy and intends to find critical success factors, prerequisites, potentials and risks. To achieve these goals, a comprehensive qualitative research approach involving six experts was applied. The results show that being customer-centric and adopting a sharing mindset are examples of CSFs, while an important prerequisite is to understand the customers’ needs and wants. These findings can guide traditional businesses with a B2C business model in the sharing economy as a provider of their products and services. Keywords: • Sharing Economy • Traditional businesses • Critical Success Factors • Prerequisites • Potentials • Risks • B2C Business Model • CORRESPONDENCE ADDRESS: Julia Schmid, University of Applied Sciences and Arts Northwestern Switzerland FHNW, Switzerland, e-mail: julia.schmid@alumni.fhnw.ch. Uwe Leimstoll, University of Applied Sciences and Arts Northwestern Switzerland FHNW, Switzerland, e-mail: uwe.leimstoll@fhnw.ch. DOI https://doi.org/10.18690/978-961-286-280-0.31 ISBN 978-961-286-280-0 Dostopno na: http://press.um.si 580 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS 1 Introduction The sharing economy is not a new idea per se. People have always shared goods among their family, neighbours and close friends, mainly in order to survive. This new phenomenon gained momentum through the financial crisis of 2007/2008, when people started being more price conscious and looking for alternative ways to gain money. Sharing platforms offer respective options, because they enable private individuals to rent out their spare rooms or private cars to other people for a limited period. Because such peer-to-peer or consumer-to-consumer (C2C) transactions require almost no specific investments and cause only very little variable costs, they can be offered less pricey than professional rental services. Furthermore, the internet made global presence and distribution handy and thus, sharing platforms became commonly available (Schor, 2014). The rise of the sharing economy causes a growing overall market volume in the rental business (Zervas, Proserpio, & Byers, 2017). However, growth takes place among the sharing businesses whereas growth of the traditional rental businesses is projected to be close to zero (Le Jeune, 2016). In addition to this, traditional businesses experience a disruptive change because of new sharing start-up companies. Well-known examples for the disruptive potential of sharing platforms are Uber and Airbnb. Analyses undermine the continuous growth of the sharing economy: 32% of the participants of a survey answered that they will increase their participation in the sharing economy in the next twelve months and 40 % said it will stay the same (Bright & McKenzie-Minifie, 2015). The latest figures from eMarketer (2017) predict that the sharing economy users will grow from 26 % of all internet users in 2017 to 38 % in 2021. This development poses a risk to established businesses (Le Jeune, 2016). As a consequence, the sharing economy has meanwhile attracted the attention of traditional businesses (Ciulli & Kolk, 2019). Instead of considering the new thinking, affected established businesses try to protect their business models (BM) by emphasizing the regulatory aspects. However, regulations only help in situations of market failures. Other options are available for companies, but only a few have started to adapt them so far (Le Jeune, 2016). For example, companies could enhance their existing BM by sharing their own asset base (Belk, 2014). J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 581 The focus of this paper lies on traditional businesses that could expand their existing B2C BM by offering their consumer products and services on a pre- existing sharing platform. Hence, this paper concentrates on business model innovations (BMI). It analyses neither the creation of a new sharing economy platform nor the introduction of a new sharing economy BM. Due to the situation described above, the main research question of this paper is whether and how it makes sense for businesses with a traditional BM to provide their products and services in the sharing economy. The goal is to identify critical success factors (CSF) and prerequisites for prosperous activities in the sharing economy as well as to identify the potentials and risks for B2C businesses. The three research questions (RQ) below guide the analysis: • RQ1: Why should traditional businesses consider activities in the sharing economy as an extension of their BM? • RQ2: What are the CSFs of the sharing economy and – according to them – what prerequisites do traditional businesses have to meet if they want to offer their products and services on sharing platforms? • RQ3: Which potentials and risks result from activities in the sharing economy specifically for B2C businesses? The paper is structured as follows: In chapter 2, literature is reviewed to give an understanding of the term sharing economy and to analyse related work. Chapter 3 describes the frameworks used and the research methodology applied. The interpretation of the survey results follows in chapter 4. Chapter 5 provides a summary and draws conclusions. 2 Literature Review A number of initiatives fall under the umbrella term of the sharing economy and a debate is ongoing how to define, structure and categorize them (Netter, Pedersen, & Lüdeke-Freund, 2019). The definition used in this paper, includes the five aspects below: • Sharing processes or transactions are handled through an online platform (Botsman & Rogers, 2011; Hamari, Sjöklint, & Ukkonen, 2016) 582 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS • Sharing is compensated by a fee or other compensation (Frenken & Schor, 2017; Plewnia & Guenther, 2018) • Sharing subjects are underused products or services (Botsman & Rogers, 2011; Frenken & Schor, 2017; Hamari et al., 2016) • Sharing allows temporary access-based consumption (Bardhi & Eckhardt, 2012; Botsman & Rogers, 2011; Frenken & Schor, 2017) • Sharing takes place in C2C or B2C contexts (Hamari et al., 2016; Plewnia & Guenther, 2018) Sharing has a long-standing tradition (Schor & Fitzmaurice, 2015). The financial crisis of 2007/2008 boosted the sharing economy as people looked for cheaper products and services (The Economist, 2013). Sharing is more cost effective for all participants, e.g. because of a higher degree of use and the absence of additional intermediaries like merchants. Hence, products and services which were previously too expensive became accessible for people with lower incomes (Schor, 2014). The main idea of the sharing economy is that sharing a product is more efficient than owning it. This concept is not new (e.g. second-hand books, second-hand clothes), but the sharing economy differs often in two points (Winterhalter, Wecht, & Krieg, 2015): 1. global scale and 2. products are shared much earlier in the product lifecycle compared to conventional second-hand markets. Another difference between sharing economy and traditional businesses is that the “... sharing economy facilitates parallel sharing (i.e. while the original owner still owns and uses the resource) and sequential sharing (i.e. reselling/lending used products to new users) ...” (Winterhalter et al., 2015). Thus, sharing companies have increased efficiency in the use of resources. Furthermore, start- ups in the sharing economy have low operational costs which are in contrast with the high operational costs (e.g. real estate rental and acquisition of machines) of traditional businesses (Hasan & Birgach, 2016). J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 583 Many strategies for how traditional businesses can approach the sharing economy have been studied. According to Belk (2014), there are three viable solutions: • Flight: Diversifying out of the industry • Fight: Regulations to stave off the sharing economy. Although, fights have been poor and prevent the industry from adopting new technologies and profiting from them. • Destruction of old BMs and adoption of creative new ways: e.g. provide content for free and find other revenue (e.g. Google), or buy up a leading company offering the disruptive technology (e.g. Avis buying Zipcar), or expand into the new market. BM research is soaring and many different definitions are used. Often BM is described with “value creation” and “value capture” (Massa, Tucci, & Afuah, 2017). According to Osterwalder & Pigneur (2010) a BM “describes the rational of how an organisation creates, delivers and captures value”. Whereas, BMI is the development or modification of components of the existing BM (Osterwalder, Pigneur, & Tucci, 2005). BMI is key for a company's future (DaSilva, 2018). According to Massa, Tucci & Afua (2017), organisations have started to experiment new ways to achieve their goals due to technological and other trends. To do so, a company must adapt and therefore it is important to understand the implications. Some information about the CSFs, prerequisites, potentials and risks can already be found in the literature as part of the description of the sharing economy. However, there is a lack of a systematic approach to identify what the CSFs and prerequisites for traditional businesses are to participate in the sharing economy in the sense of BMI. 584 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS 3 Methodology This chapter consists of the research design, including the approach for the data gathering and data analysis. The second subsection introduces the chosen models. 3.1 Research Design and Data Analysis The research method for this paper has been selected based on the research onion by Saunders, Lewis and Thornhill (2016). The applied research design for this paper is grouped into three phases: analysis, development and evaluation. In the analysis phase, current literature was studied to understand the underlying problem as suggested by the interpretivist philosophy. This fits the goal of this paper, which is to understand the CSFs of the sharing markets and the prerequisites for traditional businesses that want to participate in that market. In this phase, the answers were found for the first research question. In the development phase, the questions for the qualitative interviews were created and the interviews held. The questions were created based on the Organisational Fit model, which gave the perspectives of the questions, and the BOAT model for the more detailed structure. The idea was to begin with specific observations in the interviews, which would then be summarised in general conclusions as per the inductive approach. Qualitative interviews were used because of the explorative character of the study. The interviews themselves were semi- structured. Open questions were chosen in order to allow participants to describe a situation and to be encouraged to provide an extensive answer. Probing questions were added to further explore the responses as needed (Saunders et al., 2016). The following questions were developed to find responses to the research questions: J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 585 Table 1: Interview questions The interviews took place face-to-face with six identified experts and stakeholders in October 2017. There are three stakeholder groups in the sharing economy: the supplier, the platform provider and the end-user. The idea was to interview from each group at least one expert in order to have a good mixture of different perspectives and experiences. The following six experts were chosen: Table 2: Interviewed experts Area Questions Critical Success Factors of the markets of the sharing economy #1: Which points do you see critical for success for a traditional business in the sharing economy? #2: Why are some traditional businesses which already operate in the sharing economy successful? Prerequisites for traditional businesses #3: What would traditional businesses need to do in order to be ready to use the sharing economy for their own advantage and business? #4: What are the prerequisites for the products and services by a traditional business to be offered on sharing economy platforms? Results of Organisational Fit #5: What are the benefits resulting from a participation of traditional businesses in the sharing economy? #6: What are the risks for traditional businesses participating in the sharing economy? # Function Description [A] Expert, End-user He is the co-founder and board president of the Swiss non-profit association for sharing economy. He holds a Master’s degree in executive management. [B] Expert, End-user She founded her own consulting company where she supports traditional businesses. She holds a bachelor’s degree in mathematics and a master’s degree in computer science. She has published papers in international journals and got accepted for a PhD program with the focus on business models in the rail freight industry. [C] Platform provider, End-user He gained over ten years’ experience in the banking industry before founding a sharing platform where workspaces are shared. He has a bachelor degree in business administration and banking and finance. [D] Platform provider, End-user He is an entrepreneur and the CEO of a sharing economy platform where the user can exchange books and DVDs. He holds a bachelor degree in Business and Economics. [E] Platform provider, End-user He is the founder and CEO of a sharing platform which focuses on sharing everyday objects. He has a master’s degree in Business Administration, Marketing, Services and Communication. [F] Supplier, End-user He is the owner of a loft. He offers this apartment on sharing platforms. His educational background is in marketing and business management. 586 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS The interviews were audio-recorded and summarizing transcripts were generated based on the audio recordings. The transcripts were sent to the interviewed persons for verification. Based on the verified transcripts, the data analysis started. First, the main points mentioned were categorized into CSFs, prerequisites, potentials and risks. From these four categories, the points were structured into the BOAT layers. Then, similar points were grouped by topic. The literature was screened in the same way and the identified points were added to the ones from the interviews. After that, for each group of topics an overall naming was given which summarized the findings from the interviews and the literature. This was done for all four categories. In the evaluation phase, the goal was to create the artefact as per the design science research. The artefact is a comprehensive list of CSFs, prerequisites, potentials and risks. Afterwards, the interviewed experts verified these lists. They were requested to provide feedback on the collected findings. At the end, the findings were adjusted and finalised. 3.2 Models The model of Organisational Fit and the views of the BOAT approach were used for the structuring of the interview questions, analysis and interpretation. The Organisational Fit provides the fundamental perspective and the BOAT approach contributes the next level of the structure. As the paper has an e- business approach, these models are better suited than others like the Business Model Canvas from Osterwalder & Pigneur (2010) or the STOF model from Bouwman, Faber, Haaker, Kijl, & De Reuver (2008). The latter look at every aspect of a BM including financials. They are usually used to conceptualize BMs, thus do not suit this analysis (Marolt, Maletič, Borštnar, Lenart, & Pucihar, 2016). The Organisational Fit is used to derive the relationship between the CSFs of a market and the prerequisites that a business needs to deploy in order to be successful in the selected market. A company develops prerequisites, which consist e.g. of capabilities and resources (Amit & Schoemaker, 1993). These prerequisites for traditional businesses must then fit the CSFs of the markets and need to be adapted in cases of change. A fit between these two results is a potential, a misfit poses risks (Leimstoll, 2001). J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 587 Figure 1: Organisational Fit (adapted from (Leimstoll, 2001)) The BOAT approach was chosen as it gives the interview and outcome an additional structure. BOAT stands for Business, Organisation and processes, Application and Technology (Grefen, 2010). The four layers can be described as follows, from top to bottom (Schubert & Wölfle, 2007): • The Business view describes mainly the involved business partners and their roles. This also includes the business processes, objectives and business concept. • The Organisation and process view covers the business processes in detail, the process sequences and links between involved parties. • The Application view is about the involved information systems and their distribution within the roles of the business processes. Examples are data management, business logic and user-interface. • In the Technical view, the involved system component and the network environment are considered. (However, this view is not in scope, as this paper has a stronger business focus.) 4 Results and Interpretation The following sub-chapters summarize the findings of the qualitative interviews. To sum up, every chapter shows a table with the different clustered topics. 588 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS 4.1 Critical Success Factors of the Markets of the Sharing Economy In order to be successful, the mind-shift of the traditional business must take place. Important is that this shift takes place on all levels of the company, said [A] and [D]. The most important aspect, confirmed by all interview candidates, is the customer-centric perspective of a traditional business. According to [B], companies that are successful in the sharing economy are not traditional per se anymore. They performed the mindset change. A product on a sharing platform can only be a success if the product is actually shareable and people want to share it. This was confirmed by [A], [E] and [F]. Successful companies must have a high demand for their product or service and have a unique offer [F]. Hence, they did the mind-shift, and are now concentrating on the customers’ needs and provide a better offer [C]. Another CSF is the platform itself, said [B]. Here, it is important how the platform is organised, how many customers it has, how the prices are calculated and how the supply and demand are balanced. The latter was also found essential by [C] and [D]. To take away the fear of many traditional businesses, a CSF is to provide low entrance barriers, so they can try it and feel that they do not lose too much in case it does not work [C]. [B] added that the standardization is key. This does not only include the standardization of the production chain in the core and support processes, but also the products on a platform that must adhere to a certain standard. The customer expects certain service standards like delivery, response time, tracking, wrapping, appearance, etc. With regard to technology, the following CSFs were mentioned by [A]: scalability, ability to evolve and agility. [B] added that technology itself is an important factor, and data must be well protected. In addition, media disruptions in the application layer are no longer tolerated by users. J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 589 Table 3: Findings regarding CSFs 4.2 Prerequisites for Traditional Businesses In order to be ready to use the sharing economy, the first two steps which [A] underlined were to recognise the problem and the digital mind-shift. A radical perspective change and mind-shift are needed and the customer must be put in the centre of attention. A company must understand what the customer wants and needs. All interviewees confirmed this latter point. A traditional company must rethink everything whereas new start-up companies can more easily set their strategies up as needed [C]. It is essential that a strategy is developed and a plan is created, before entering a platform [B]. Partnerships become increasingly important for professional suppliers on sharing platforms, stated [B]. They do no longer only have a few selected corporations but suddenly many more potential partners. [E] added that a company must be aware of having less contact with intermediaries but more direct interactions with the end-users. This makes it even more important to have a unique selling proposition [F]. Furthermore, [C] and [D] agreed that the offer must be a lot better than what the customer can already get today. It must be unique and cool and preferably with no emotional attachment, although this differs from person to person. In Findings Business view Be customer-centric Adopt sharing mindset Establish trust Promote low entrance barriers Provide a well-balanced demand and supply Offer a variety of shareable products and services Have unique offerings Organisation and Process view Provide standardised processes Application view Provide scalable and agile applications Provide seamless integration Ensure state-of-the-art security 590 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS addition, expensive products are more appropriate for sharing than cheap products, which was confirmed by [C] and [E]. You have to be a bit creative since often more products and services are shareable than first thought of [E]. [C] and [D] agreed that it is important to start small and develop the business on sharing economy platforms over time, and that this change should grow organically from within the company. With regard to the employees, [E] mentioned that training and re-education must be considered before starting to offer services on sharing platforms. Sales capability is no longer paramount – it is all about repairing, maintaining and building a solid relationship with one’s customers [E]. More on the process side, [B] emphasized standardisation is key on sharing platforms. It creates efficiency in the business processes and is necessary to provide standardized products. If a certain standardization is possible, it is easier to offer a big range of products at a competitive price. In order to be ready to offer products on a sharing platform, the platform itself must be examined. It must have a balanced demand and supply [C]. Furthermore, a company must consider the processes. Often platforms already provide a certain level of standardized digital processes, which a supplier can simply take over. However, the background processes of the supplier must be adapted and organisational capabilities are key. The latter must match the new process requirements. Here, it can be added that digitalization is key [B]. Table 4: Findings regarding prerequisites Findings Business view Understand customers’ needs and wants Establish mind-shift Have a clear strategy and vision Create combinable business model Offer suitable products or services Analyse suitable platforms Organisation and Process view Implement standardised processes Train employees Establish strong partnerships Application view Ensure digitalised processes Support scalable and flexible infrastructure Provide suitable applications J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 591 4.3 Potentials Half of the interviewed experts, namely [A], [B] and [F] described reaching customers around the world as one of the first potentials. This is a new situation for most traditional businesses. Additionally, [A], [B] and [E] pointed out access to a larger market and a new customer segment. A traditional business, which offers on sharing platforms, could have more customers than before [E]. [D] mentioned that the traditional business probably makes “the job to be done” better than before. The consequence is meeting the customer’s needs better und thus, attracting more customers. [B] pointed out that a company must have standardized processes otherwise they would not be able to offer the products and services on a sharing platform. According to [F], a traditional business can profit in many ways from standardized processes offered by reputable platforms: They usually offer various processes (e.g. invoicing, customer support) and services (e.g. mobile app) to their users. Furthermore, a platform brings interested customers to the suppliers [F] and the suppliers are in direct contact with the end-users. [B] explained it like this: suppiers learn immediately what works and what does not. In return, this allows a company to react quickly to customer feedback. As soon as a company is represented on a platform, it can profit from data collection. Hence, it can analyse data and learn more about its customer base [B]. This information can then be reused for further developments to cater to customer needs. Another potential for traditional businesses is a disruption. They can make other BMs obsolete. Hence, if traditional businesses adapt, they have the chance to disrupt the industry [D]. To sum up, [C] added that it makes sense to share, because it is ecological and more efficient as a whole. [E] commented that sharing can optimize your image as sharing is directly associated with trendiness and innovation. 592 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS Table 5: Findings regarding potentials 4.4 Risks The necessary mind-shift of the company was mentioned twice as a risk [A and B]. Due to this change in a company, the motivation of the employees can suffer [B]. When a company extends its BM in order to offer products on a sharing platform, the old and the new part of the BM can compete with each other and lead to cannibalistic effects [B and E]. Extending the BM poses the risk of investment. Change is time and cost-intensive per se, agreed [A], [B] and [C]. Turning to the duration and trendiness of sharing platforms, four experts [A, B, D and F] agreed that such a venture might be of short duration, as nobody knows what will be trendy in the future. Besides, [D] mentioned that sharing economy is a buzz word and the problems with buzz words are that it is not good per se. Offering products and services on a sharing platform must create a certain benefit for the end-users. In order to compete with the rivals, there is a certain price pressure, which is absorbed by standardizing the processes. However, a company has a risk of low margins due to the high price pressure [B]. In this regard, [C] commented that the suppliers are constantly compared with each other due to the direct competition with opponents. Furthermore, the market environment, financial crises, the country’s economy, the country’s specialities, languages, regulations and natural disasters are further possible risks for a company in general [B]. Findings Business view Gain new customers & increase sales Gain international presence Understand customers’ needs better Improve the company’s image Increase profitability Contribute to an ecological environment Increase diversification Organisation and process view Optimise flexibility and agility Application view Increase digitalisation J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 593 New technologies are constantly arising and posing a threat [B]. [D] confirmed this and added that artificial intelligence and robotics are two other big new technology trends, which an enterprise must consider. With these new technologies, there is the danger of being disrupted, as [D] had to experience. This usually happens when the use case becomes obsolete and the customer needs are catered to differently. Another aspect is trust in the platform. [A] and [B] agree with each other that privacy and security are risks. Customers must have confidence in the platform. A further aspect which [B] added, is the data security and the threat of data being stolen. Table 6: Findings regarding risks 5 Conclusion The problem of traditional businesses is that they experience a disruptive change caused by the sharing economy. The sharing economy BMs are different from the previously known traditional BMs and thus pose risks for traditional businesses. Furthermore, the growth rates of sharing economy models are partly skyrocketing compared to the figures of traditional BMs. These are all indications why traditional businesses must consider sharing economy platforms for their products and services. This answers RQ 1. Findings Business view Lose customers’ trust and attention Fail mind-shift of the company Cannibalise traditional business model Decrease employee motivation Have risk of investment Be compared directly with competitors Change in environment Be the target of the next disruption Organisation and process view Increase risk of process failures Application view Fail to follow state-of-the-art technologies Increase security risks 594 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS The findings from the literature review and the points raised during the six expert interviews answer the second and third research question. The contribution of this paper to research and practice are the comprehensive lists of CSFs, prerequisites, potentials and risks. Nearly half of the listed findings were not mentioned in the literature before in this context. The other findings confirm previous results of other authors. Overall, the lists of identified aspects can serve as a guide for traditional businesses planning to offer their products and services on sharing platforms. If traditional businesses want to keep the reins of the sharing economy, the CSFs are important to understand. The interviews stated clearly that a company should be customer-centric, adopt a sharing mind-set and offer unique products or services. Important is that low entrance barriers are promoted. Schor (2014) added that to earn money there should be low entrance costs. Furthermore, establishing trust is key. Tollefson (2013) mentioned that trust will attract customers, and building trust Belk (2014) said can be done by providing a place to give feedback in order to overcome the customers’ fear of using a platform. A further CSF is that the demand and supply side is well balanced and that a variety of products and services are offered on the platform. Offers on the platform should be unique and it is important that “everybody wins” (Hasan & Birgach, 2016). Providing standardized processes is essential and can be achieved by providing scalable and agile applications and seamless integration. In this regard, Schor (2014) mentioned that new innovative technology is key to success and Accenture (2016) underlined that the different layers should be integrated. The final CSF is about security. Based on the interviews it became clear that it is important to ensure state-of-the-art security which Tollefson (2013) confirmed. Moreover, there are several prerequisites for traditional business as suppliers on sharing economy platforms. For example, the interviewees said that it is important to understand customers’ needs and wants and to have established a mind-shift. Belk (2014) mentioned that traditional companies must consider the trend from “you are what you own” to “you are what you share”. Deloitte (2015) threatened that companies which do not participate in the sharing economy, will not make this mind-shift, and thus will lose market share. Another significant point is to have a clear strategy and vision. With regard to this point, Zekanović- Korona & Grzunov (2014) argued that modern ICT helps to pursue the strategy and goals. Furthermore, a company should create an autonomous BM, which is J. Schmid & U. Leimstoll: Traditional Businesses in the Sharing Economy: Critical Success Factors and Prerequisites 595 combinable with the previous one. Offering suitable products and services is a further prerequisite. To consider here is that the appetite for higher quality and more durable goods is growing, products are cheaper and usually underused (Botsman, 2015; PwC, 2015; Schor, 2014). It is important to analyse suitable platforms and Accenture (2016) found that the platforms must enable the BMs. A point only mentioned by the interviewees was the aspect of understanding the influence of legal and compliance in the markets. Implementing standardized processes, establishing strong partnerships and having trained employees is key. The focus should be on having digitalized processes, scalable and flexible infrastructure and suitable applications. Furthermore, potentials and risks can arise, depending on the fit between the CSFs and the prerequisites. On the one hand, potentials are that a traditional company could gain new customers, increase sales and gain international presence. Different literature references confirmed that the market is growing, more products are shared on a global scale and that one can gain extra money (Hasan & Birgach, 2016; Le Jeune, 2016; Sauer-Gründel, 2017; Schor, 2014; Winterhalter et al., 2015; Zervas et al., 2017). In addition, it can improve the company's image and increase its profitablity. The latter can be achieved as technologies reduce transaction costs (Schor, 2014), high population density leads to economies of scale (Yaraghi & Shamika, 2016) and increased resource- use efficiency to lower costs (Winterhalter et al., 2015). Bertand, Chalon & Yin (2016) underlined that it is possible to collect huge amounts of data through digitalization and McLean (2015) added that through diversification a “multi- option society” can be catered. On the other hand, the risk is losing customers’ trust and attention. The literature mentioned in this regard that the fear of sharing with strangers can affect trust (Belk, 2014) or that the concerns are only gone after using the offers of the sharing platforms for the first time (Tollefson, 2013). Failing in the mind-shift of the company, cannibalising the traditional BM, being directly compared with competitors, being the target of the next disruption and decreasing employee motivation count also as risks based on responses of the interviewees. Points which arose in the interviews and the literature are the risk of investment and the changing environment. In that respect Hasan & Birgach (2016) wrote that margins are lower in the sharing economy which is difficult for traditional businesses to compete with. Le Jeune (2016) specified that sharing models are 596 32ND BLED ECONFERENCE HUMANIZING TECHNOLOGY FOR A SUSTAINABLE SOCIETY, CONFERENCE PROCEEDINGS expected to appear in a wider range of markets than has been seen to date with commensurate impacts on traditional industries. Further risks are security issues and process failures. When using the results, it has to be considered that the study is explorative and based on six qualitative interviews. 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