Abstract: In a competitive environment, it is important to adopt an information technology (IT) investment strategy of B2B e-commerce websites such that it is competitive. It is assumed that one oligopoly enters first and then the others follow late. In considering IT cost reduction and competition intensity, an IT investment strategy model is developed. Then, the effect of IT cost reduction and competition intensity on IT investment strategy is analyzed. Results show that, as the IT cost decreases, the first entrant tends to adopt a defensive strategy, while the late entrants are willing to adopt an offensive strategy. With the increase of competition intensity, both the early entrant and late entrants adopt an offensive investment strategy. These results are helpful to IT investment strategy for B2B e-commerce website.

Key words: IT investment strategy, IT cost reduction, competition intensity, B2B ecommerce website