Chapter 4 B2B E-Commerce. 淡江大學資管系所侯永昌 1 章前故事：通用汽車的 B2B...

Chapter 4

B2B E-Commerce

淡江大學資管系所侯永昌 2

章前故事：通用汽車的 B2B創新通用汽車 (General Motors) 是世界上第二大的汽車製造商，在多達 50 餘國設廠，遍銷 190 餘國

汽車工業是競爭劇烈的市場， GM 面對的問題有： GM 計畫在未來大量銷售客製化的汽車，以取代規格車的生產，此舉可以減少大量的庫存成本。但是它透過經銷商的網站來銷售客製化的汽車，減少了通路衝突的問題

GM 與經銷商、供應商之間的協同合作 (collaboration) 需要建立良好的溝通環境

GM 透過中介者 (intermediaries) 拍賣過時的零件或資產，不僅況日費時、參與者少，導致價格偏低，而且要付高達 20% 的佣金

GM 每年向超過 20,000 個供應商，採購超過 200,000 件商品，不僅況日費時、參與者少、導致價格偏高


章前故事：通用汽車的 B2B創新 GM 的解決之道：

在連結供應上與經銷商方面：與其它汽車業者共同成立一個 B2B 的市集 (exchange) ， Covisint

在資產出售方面：在 covisint.com 上建立一個forward auction 的拍賣系統。第一項拍賣的商品是8 部 75 噸的打印機 (stamping presses) ，在 89 分鐘內就賣出，得款 180 萬。以往類似物品的標售，可能需時 4~6 周，價格也會低一半

在商品採購方面：在 covisint.com 上建立一個reverse auction 的招標系統。第一項採購的商品是橡膠封條套件 (rubber sealing packages) ，價格比以往低很多，行政方面的費用也降低 40% 以上


Concepts of B2B EC Business-to-business e-commerce (B2B

EC) Transactions between businesses conducted

electronically over the Internet, extranets, intranets, or private networks; also known as eB2B (electronic B2B) or just B2B

The major characteristic of B2B is that companies attempt to electronically automate trading or communication processes in order to improve them


Key Business Drivers for B2B The need to reduce cost The need to gain competitive advantage The availability of a secure broadband Internet

platform and private and public B2B e-marketplaces

The need for collaborations between suppliers and buyers

The ability to reduce delays The emergence of effective technologies for intra-

and interorganizational integration


Types of B2E EC


Basic Types of B2B E-Marketplaces One-to-Many and Many-to-One: Private E-

Marketplaces Company-centric EC

E-commerce that focuses on a single company’s buying needs (many-to-one, or buy-side) or selling needs (one-to-many, or sell-side)

Private e-marketplaces

Markets in which the individual sell-side or buy-side company has complete control over participation in the selling or buying transaction


Basic Types of B2B E-Marketplaces

Many-to-Many: Exchanges Exchanges (trading communities or trading

exchanges)

Many-to-many e-marketplaces, usually owned and run by a third party or a consortium, in which many buyers and many sellers meet electronically to trade with each other

Public e-marketplaces

Third-party exchanges that are open to all interested parties (sellers and buyers)


Basic Types of B2B E-Marketplaces Supply chain improvements and

Collaborative commerce Business deal with other businesses for purposes

beyond just selling or buying. It includes the activities such as communicating, collaborating, and sharing of information among business partners for joint design, planning, and so on

To qualify as a collaborative commerce, the activities that are shared must represent far more just financial transactions; for example, they may include activities related to design, manufacture, or management


Generations of B2B E-Commerce


Components of B2B E-Commerce


Characteristics of B2B EC Parties to the transaction

Direct buyer or seller Online intermediary

An online third party that brokers a transaction online between a buyer and a seller; may be virtual or click-and-mortar


Characteristics of B2B EC Types of Transactions: How do firms buy?

Spot buying

The purchase of goods and services as they are needed, usually at prevailing market prices, which are determined dynamically by supply and demand. It may be conducted most economically on the public exchanges

Strategic systematic sourcing

Purchases involving long-term contracts that usually are based on private negotiations between sellers and buyers


Characteristics of B2B EC Types of Materials Traded: What do firms

buy? Direct materials

• Materials used in making the products (e.g., steel in a car or paper in a book)

• They are frequently purchased in large quantities after extensive negotiation and contracting

Indirect materials• Materials used to support production (e.g., office

supplies or light bulbs)• They are usually used in MRO (maintenance,

repair, and operation)


Characteristics of B2B EC

Direction of Trade Vertical marketplaces

Markets that deal with one industry or industry segment (e.g., electronic, cars, steel, chemicals)

Horizontal marketplaces

Markets that concentrate on a service, materials, or a product that is used in all types of industries (e.g., office supplies, PCs, travel services)


Summary of B2B CharacteristicsParties to Transactions Types of Transaction

Direct, seller to buyer or buyer to seller Spot buying

Via intermediaries Strategic sourcing

B2B2C

Types of materials sold Direction of trade

Direct Vertical

Indirect (MROs) Horizontal

Number and form of participation Degree of openness

One-to-many: sell-side (e-storefront) Private exchange

Many-to-one: buy side Public exchange

Many-to-many: exchangePrivate (usually), can be open

Many, connected: collaborative


B2B Marketplaces Systematic sourcing and indirect material:

MRO hubs (horizontal markets for MRO) Systematic sourcing and direct material:

Vertical markets for direct material Spot sourcing and indirect material:

Horizontal markets for spot sourcing Spot sourcing and direct material: Vertical

markets (B2B exchange)


Supply Chain Relationships in B2B The supply chain process extends from the

acquisition of materials from suppliers, to the processing of a product or service, to packaging it and moving it distributors and retailers; the process ends with the eventual purchase of a product by the end consumer

E-commerce B2B can make supply chains more efficient and effective or it can change the supply chain completely, eliminating one or more intermediaries


Supply Chain Relationships in B2B B2B private e-marketplace provides a

company with high supply chain power and high capabilities for online interactions

A public e-marketplace provides a business with high buying and selling capabilities, but results in low supply chain power

Using an intermediary results in low supply chain power and buying/selling capabilities


Services Industries Online in B2B Travel and hospitality services Real estate Financial services

Making business payment, transferring funds, purchasing insurance, …

Banking and online financing Business loans, information about venture capital, …

Other online services Consulting services, law firms, health organizations,

and others sell knowledge and special services online, recruiting and staffing services, …


Partner and Supplier Relationship Management Successful e-business carefully manage partners,

prospects, and customers across the entire value chain, most often in a 24/7 environment

Corporate customers may require more services than individual customers need. For example,

Access to the supplier’s inventory status report so that they know what items a supplier can delivery quickly

May want to see their historical purchasing records May need private showrooms and trade rooms

It needs to create an integrated online environment, such as call center and collaboration tools, for e-business customers and partners


Benefits of B2B (1)(S = seller, B= buyer, J = joint)

Create new sales opportunities (S) Eliminates papers and reduces administrative costs

(J) Expedites processing and reduces cycle time (J) Lowers search costs and time for buyers to find

products and vendors (B) Increases productivity of employees dealing with

buying and/or selling (J) Reduces errors and improves quality of services (J) Makes product configuration easier (B)


Benefits of B2B (2) Reduces marketing and sales costs (S) Reduces inventory levels and costs (J) Enables customized online catalogs with different

prices for different customers (J) Increases production flexibility, permitting just-in-

time delivery (S) Reduces procurement costs (B) Facilitates mass customization (J) Provides for efficient customer service (B) Increases opportunities for collaboration (J)


Limitations of B2B

Channel conflict Operation of public exchanges Personal face-to-face interactions

unavailable


One-to-Many: Sell-Side E-Marketplaces

Sell-side e-marketplace

A Web-based marketplace in which one company sells to many business buyers from e-catalogs or auctions, frequently over an extranet

Three major pricing methods: 1. Selling from electronic catalogs

2. Selling via forward auctions

3. One-to-one selling, usually under a negotiated long-term contract


Sell-Side Configuration Intermediations in B2B


Sales from Catalogs: Storefront A company usually offers both one catalog for all

customers and a customized catalog for each major customer

It offers an opportunity for efficient customization; business customer can self-configure customized products, get price quotes, and submit orders, all online

Sell-side systems must provide several essential functionalities that enable B2B vendors to efficiently execute sales, provide superb customer service, allow integration with existing IT systems, and provide integration with non-Internet sale systems


Sales from Catalogs: Storefront Sellers that use this model can be successful as

long as they have a superb reputation in the market and a large enough group of loyal customers

Limitations How to contact would-be buyers online Channel conflict with their existing distribution channel Cost to customer for use of traditional EDI—one solution is

to use extranets The number of business partners online must be large

enough to justify the system infrastructure and operation and maintenance expenses


Direct Sales: Example of Cisco Systems Cisco provided Cisco Connection Online (CCO) in spring

1994; by 2004, Cisco’s customers and reseller partners were logging onto Cisco’s Web site over 2 million times a month to receive technical assistance, place and check orders, or download software

The online services has been so successful that nearly 85% of all customer service inquires and 95% of software updates are delivered online

Today, a business customer’s engineer can sit down at a PC, configure a product, and find out immediately if there are any errors in configuration (some feedback is given by intelligent agents)


Direct Sales: Example of Cisco Systems By providing online pricing and configuration tools to

customers, 99% of orders are now placed through CCO, saving time for both Cisco and its customers

Online sales grew to over $8 billion in 2002, and to about $10 billion in 2004

Each month Cisco used to receive over 150,000 order-status inquiries; Cisco provides self-tracking and FAQ tools so that customers can find answers to many of their questions by themselves

In addition, company’s freight forwarders update Cisco’s database electronically about the status of each shipment; all new information is made available to customers immediately; as soon as an order ships, Cisco notifies the customer via e-mail


Direct Sales: Benefits from Cisco Systems (1) Reduced operating cost for order taking

Save $363 million per year, or approximately 17.5% of its total operating costs; this is due primary to increased productivity of employees who take and process orders

Improved quality Facilitate the Six Sigma mission of Cisco

Enhanced technical support and customer service With more than 85% of its technical support and customer

service calls handled on line, Cisco’s technical support productivity has increased by 250% per year

Reduced technical support staff cost Reduce technical support staff cost by rough $125 million

each year


Direct Sales: Benefits from Cisco Systems (2)

Reduced software distribution costs Save $180 million in distribution, packaging, and

duplicating cost each year Save $50 million annually in printing and distributing

catalogs and marketing materials to customers Faster service

Lead times were reduced from 4~10 days to 2~3 days The CCO system also benefits customers. Cisco

customers can configure orders more quickly, immediately determines cost, and collaborate much more rapidly and effectively with Cisco’s staff. Also, customer service and technical support are faster


Selling via Distributors and Other Intermediaries Manufacturers can sell directly to businesses, and

they do so if the customers are large buyers Frequently they use intermediaries to distribute

their products to a large number of smaller buyers The intermediaries buy products from many

vendors and aggregate them into one catalog from which they sell to customers and to retailers

Now they also are selling their products online via storefronts

SAM’s Club (of Wal-Mart), Amazon.com, and W.W. Grainger are some well-known online distributors for business


Selling via Auctions (1) Using Auctions on the Sell-Side

Revenue generation• Forward auctions offer business a new venue for

quickly and easily disposing of excess, obsolete, and returned products

Cost savings• These saving help increase the seller’s profits

Increased “stickiness”• Forward auctions give Web site “stickiness”

Member acquisition and retention• All bidding transactions result in additional registered

members, who are future business contacts


Selling via Auctions (2) Selling from the Company’s Own Site

Large, well-known companies that frequently conduct auctions, such as GM, build an auction mechanism on the company’s own site

If the company already has an electronic marketplace for selling from e-catalog, the additional cost for infrastructure and operate and maintain the auction site may not be too high


Selling via Auctions (3) Using Intermediaries

No additional resources (e.g., hardware, bandwidth, engineering, or IT personnel) are required for the company using the intermediary

Enable a company to have a robust, customized auction up-and-running immediately

Billing and collection efforts are handled by the intermediary

A significant added value that could be provided by intermediaries is the attraction of many potential buyers to the auction site


One-from-Many: Buy-SideE-Marketplaces and E-Procurement Buy-side e-marketplace

A corporate-based acquisition site that uses reverse auctions, negotiations, group purchasing, or any other e-procurement method

Procurement management The planning, organizing, and coordinating of all the

activities relating to purchasing goods and services needed to accomplish the organization’s mission

E-procurement The electronic acquisition of goods and services for

organizations via the Internet, EDI, etc.


Procurement Methods (1) Conduct bidding or tendering (a reverse

auction) in a system in which suppliers compete against each other

Buy directly from manufacturers, wholesalers, or retailers from their catalogs and possibly by negotiation

Buy from the catalog of an intermediary (e-distributor) that aggregates sellers’ catalogs

Buy from an internal buyer’s catalog, in which company-approved vendors’ catalogs, including agreed-upon prices, are aggregated


Procurement Methods (2) Buy at private or public auction sites in which

the organization participates as one of the buyers

Join a group-purchasing system that aggregates participants’ demand, creating a large volume

Buy at an exchange or industrial mall Collaborate with suppliers to share information

about sales and inventory, so as to reduce inventory and stock-outs and enhance just-in-time delivery


Traditional Procurement Process


Inefficiencies in Traditional Procurement Management

Procurement management Approximately 80% of an organization’s purchased items,

mostly MROs, constitute 20~25% of total purchase value A large portion of corporate buyers’ time is spent on non-

value-added activities such as data entry, correcting errors in paper work, expediting delivery, or solving quality problems

If buyers are busy with the details of smaller items, they do not have enough time to properly deal with the purchase of high-value items

Maverick buying Unplanned purchases of items needed quickly, often at

non-prenegotiated higher prices


Types of E-Procurement (1) E-sourcing: Identifying new suppliers for a specific

category of purchasing requirements using Internet technology

E-tendering: Sending requests for information and prices to known suppliers and receiving the suppliers’ response and bids using Internet technology

E-reverse auctioning: Using Internet technology to buying goods and services from a number of known and unknown suppliers


Types of E-Procurement (2) E-informing: Gathering and distributing purchasing

information both from and to internal and external parties using Internet technology

Web-based ERP (electronic resource planning): Creating and approving purchasing requisitions, placing purchase orders, and receiving goods and services by using a software system based on Internet technology


Types of E-Procurement (3) E-market sites: Buying communities access favored

suppliers’ products and services, add products to shopping carts, create requisitions, seek approval, receive purchase orders, and process electronic invoices, integrating them into suppliers’ supply chains and buyers’ financial systems

E-MRO (maintenance, repair, and operating): The same as Web-based ERP except that the good and services ordered are non-product-related MRO suppliers


E-Procurement Methods


E-Procurement Process: Buyer’s View


Benefits of E-Procurement By automating and streamlining the laborious

routines of the purchasing function, purchasing professionals can focus on more strategic purchases Increasing the productivity of purchasing agents Lower purchase prices through product standardization,

reverse auctions, volume discounts, and consolidation of purchases

Improving information flow and management Streamline the purchasing process, make it simple and fast Improving the payment process Establishing efficient, collaborative supplier relations due to

high transparency and information sharing with business partners


Limitations and Challenges of E-Procurement

The cost may be too high It may be difficult to get suppliers to cooperate

electronically The system may be too complex It may be difficult to have internal and external

integration The technology needs to be updated frequently


Buy-Side E-Marketplaces:Reverse Auctions

Reverse auction A tendering (bidding) system in which suppliers are

invited to bid on the fulfillment of an order and the lowest bid wins

The electronic process is faster and administratively much less expensive; it also can result in locating the cheapest possible products or services

Request for quote (RFQ) The “invitation” (form or document) to participate in

a tendering (bidding) system


Reverse Auction Process


Conducting Reverse Auctions As the number of reverse auction sites

increases, suppliers will not be able to manually monitor all relevant tendering sites

The problems can be solved by introducing Online directories that list open RFQs Monitoring software agents; they also can aid in

the bidding process A third-parties intermediary may run the

electronic bidding, as they do for forward auctions


E-Tendering by Governments Most governments must conduct tendering

when they buy or sell goods and services. Doing this manually is slow and expensive. Therefore, many are moving to e-reverse auctions


Group Reverse Auctions To increase their bargaining power and get

price discounts, companies, like individuals, can buy in a group

Such group reverse auctions are popular in South Korea and usually involve large conglomerates, such as LG group and Samsung Group

This practice is popular in the health care industry in the United Kingdom and the United States


The Group Purchasing Process


B2B Electronic Exchanges: An Overview Public e-marketplaces (public exchanges)

A many-to-many e-marketplace Trading venues open to all interested parties

(sellers and buyers) that use a common technology platform; usually run by third parties or industry consortia

Some are also known as trading exchanges Functions of Exchanges

Matching buyers and sellers Facilitating transactions Maintaining exchange policies and infrastructure


Communities of an Exchange


Services in Exchanges


Ownership of B2B Exchanges An industry giant

One manufacturer, distributor, or broker sets up the exchange and runs it

Potential problem is whether the giant’s competitors will be willing to use it

A neutral entrepreneur A third-party intermediary sets up an exchange and

promises to run an efficient and unbiased exchange Potential problem is whether buyers and sellers will use

the exchange The consortium (or co-op)

Several industrial players set up an exchange so that all can benefit

Potential problem is determining who is in charge of the exchange


Ownership of B2B Exchanges Third-Party Independent Marketplaces

They are neutral because they do not favor either sellers or buyers

Because they do not have a built-in constituency of sellers or buyers, they sometimes have a problem attracting enough buyers for sellers to attain financial viability

To increase their financial viability, these exchanges try to team up with some partners, such as large sellers or buyers, financial institutions that provide payment schemes, and logistics companies that fulfill orders


Ownership of B2B Exchanges Consortium Trading Exchange (CTE)

An exchange formed and operated by a group of major companies in an industry to provide industry-wide transaction services

Examples of consortia exchanges are Avendra (hospitality industry), OceanConnect (shipping), and Elemica (chemicial oil)


Dynamic Pricing A rapid movement of prices over time, and

possibly across customers, as a result of supply and demand at any given time

Examples of dynamic pricing Stock exchanges, auctions, …

Dynamic pricing is based on market information being available to buyers and sellers; therefore, the Internet facilitates many of the dynamic models for both B2B and B2C


Revenue Models of Exchanges Transaction fees (commissions)

Seller may object to transaction fee, especially when their regular customers are involved

Service fees Sellers/buyers are more willing to pay for

value-added services Membership fees

High membership fee / low membership fee? Advertising fees Other revenue sources

such as auction fee, license fee


Advantages of B2B Exchanges Making markets more efficient Providing opportunities for sellers and

buyers to find new business partners Cutting administrative costs of ordering

MROs Expediting trading processes Facilitating global trade Creating communities of informed buyers

and sellers


Limitations of B2B Exchanges Despite the benefits, beginning in 2001,

exchanges started to collapse In case of exchange failure, the risk is

primarily a financial one Suddenly losing the market in which one has been

buying and selling Having to scramble to find a new exchange or to

find buyers and sellers on one’s own Finding a new place to trade is an operational risk Poor product performance and receipt of

incomplete information from degraded exchanges (for buyers)


Potential Gains and Risks in B2B Exchanges


Legal Challenge for B2B Consortia B2B exchanges and other e-marketplaces

typically introduce some level of collaboration among both competitors and business partners

In both cases, antitrust and other competition laws must be considered, especially for industries in which either a few firms produce most or all of the output or in which they are only few buyers


B2B Portals B2B portals are information portals for business They usually include directories of product offered by

each seller, lists of potential buyers and what they want, and other industry or general information

The portal may get commissions for referrals or only derive revenue from advertisements

Many B2B portals are beginning to offer, for a fee, additional services that support trading, such as escrow and shipments

B2B portals may be horizontal, offering a wide range of products to different industries, or they may be vertical, focus on a single industry or industry segment


Corporate (Enterprise) Portals A major gateway through which employees,

business partners, and the public can enter a corporate website and access to company information

The Functionalities of Portals Information Portals: Portals that store data and

enable users to navigate and query these data Collaborative Portals: Portals that allow

collaboration


Corporate Portals Framework


E-Communities in B2B B2B e-communities are mostly communities of

transactions and, as such, members’ major interests are trading and business-related information gathering

Most of the communities are associated with vertical exchanges; therefore, their needs may be fairly specific. However, it is common to find generic services such as classified ads, job vacancies, announcements, industry news, and so on

The newest variation of these communities is the business-oriented or professional social network as LinkedIn


Advantages of Social Commerce in B2B Discover new business partners Enhance their ability to learn about new technologies,

competitors, and the business environment Find more sales prospects Solve problems by using the “answer” function in LinkedIn

and other networks Improve participation in industry association activities

(including lobbying) Create brand awareness Create buzz about upcoming product releases Create social communities to encourage discussions among

business partners about their products and/or act as a feedback mechanism about their products/services for business improvements


E-Communities in B2B Business can use B2B social networking to improve

knowledge sharing, collaboration, and feedback Social networking sites may also prove beneficial in

aiding troubleshooting and problem-solving efforts Many companies are using Web 2.0 tools, such as

blogs, wikis, RSS feeds, video ads, in B2B EC E-communities offer a powerful resource for e-

businesses to leverage online discussions and interaction in order to maximize innovation and responsiveness


Strategy for B2B Social Networking Participate: Executives should become bloggers

and social media participants. For example, an executive should create a LinkedIn profile (or another community)and post a few blog entries on industry-specific websites

Monitor: Social media monitoring is a big business. If you decide not to go with an automated report on how your company is mentioned in social media, assign an internal team to report on it

Use existing applications: Companies can find their own software applications to create a private B2B network or work with one of the public network

- Gaffney 2007


The Future of B2B Social Networking Businesses must embrace social networking

in order to understand the needs and wants of their prospects and clients

Establishing trust with business partners and generating brand awareness will force B2B companies to become more involved in social commerce in general and social marketing in particular


B2B Internet Marketing Organizational Buyer Behavior

Organizations buy large quantities of direct materials and indirect materials

Transaction volumes are far larger Terms of negotiations and purchasing are

complex Family and Internet communities may have no

influence Organization’s purchasing guidelines and

constraints and purchasing system are used Purchase decisions are usually made by group


Model of Organizational Buyer Behavior


Marketing and Advertising in B2B Traditional (offline) B2B marketers use methods

such as physical trade show, advertisements in industry magazines, paper catalogs, and salesperson who call on existing customers and potential buyers

In the digital world, these approaches may not be effective, feasible, or economical. Popular methods include online directory services, matching services, the marketing and services of exchange, cobranding or alliances, affiliate programs, online virtual trade shows, online marketing services, or e-communities


Marketing and Advertising in B2B How can company reach new customers?

Information from some well-defined group; for example, industry trade association records or industry magazines

Through an affiliation service Advertising: one of the major objectives of

market research is to provide tactics and strategies for EC advertising


Managerial Issues (1)1. Which B2B model(s) should we use for e-

procurement? When evaluating the various upstream B2B models, we

need to match the suitable e-procurement goals with solution strategies depending on whether the purchases are direct material or indirect material

Four typical goals that should be distinguished are organizational operational efficiency, minimum price, minimum inventory and stock-outs, and low purchase administration cost

Handling many small and medium suppliers that do not have sophisticated systems is a challenging goal


Managerial Issues (2)2. Which B2B model(s) should we use for online B2B

sales? A key issue for B2B sales is how to reconcile with multiple

buyers who adopt different EDI and ERP systems The integration of various EDI standards with ERP

solutions is another challenge to overcome In addition to contract management, B2B market use

auctions, liquidations, and social networks to increase sales


Managerial Issues (3)3. Which exchange should we join?

One of the major concerns of management is selecting exchanges in which to participate

At the moment, most exchanges are not tightly connected, so there may be a substantial start-up effort and cost for jointing multiple exchange

A related issue is whether to join a third-party public exchange or a consortium or to create a private exchange

Companies must take very seriously the issues listed in page 65

Joining an exchange may require a restructuring of the internal supply chain, which may be expensive and time consuming


Managerial Issues (4)4. Which solutions and vendor(s) should we select?

Select a primary vendor such as IBM, Microsoft, or Oracle. This vendor will use its software and procedures and add partners as needed; or

Use an integrator that will mix and match existing products and vendors to create “the best of breed” for your needs

5. What is the organizational impact of B2B? The B2B system will change the role of procurement

department by redefining the role and procedures of the department

A procurement policy portfolio is necessary to balance strategic sourcing items and spot purchasing items and to design a supply relationship management system


Managerial Issues (5)6. What are some ethical issues in B2B?

Because B2B EC requires the sharing of proprietary information, business ethics are a must

Employees should not be able to access unauthorized areas in the trading system, and the privacy of trading partners should be protected both technically and legally

7. How shall we manage the suppliers? Global suppliers can be evaluated periodically with

regard to price, quality, and timely delivery Management must decide whether to negotiate a

quantity discount or to compel with suppliers to compete in reverse auctions


Managerial Issues (6)8. Which type of social network should we use—

private (proprietary) or public? There are successes and failures in both types. In most

cases it is better to go with public networks such as LinkedIn and Facebook

9. Can we use B2C marketing methods and research in B2B?

Some methods can be used with adjustments; others cannot. B2B marketing and marketing research requires special methods


Summary (1)1. The B2B field

The B2B field comprises e-commerce activities between businesses. B2B activities accounts for 77~85% of all EC

2. The major B2B models Sell-side marketplaces (one sell to many buyers), buy-

side marketplaces (one buyer from many sellers), and trading exchanges (many sellers to many buyers)

Intermediaries play an important roll in some B2B models

3. Sell-side intermediaries The role of intermediaries in B2B primarily is to provide

value-added services to manufacturers and business customers; they also can aggregate buyers and conduct auctions


Summary (2)4. The characteristics of sell-side marketplaces

The major technology used is electronic catalogs, which allow for efficient customization, configuration, and purchase by customers

Forward auctions are becoming popular, especially for selling surplus inventory

Sell-side auctions can be conducted from seller’s own site or from an intermediary’s auction site

Sell-side activities can include extensive customer service

5. B2B reverse auctions A reverse auction is a tendering system used by buyers to

collect bids electronically from suppliers Auctions can be done on a company’s Web site or on a

third-party auction site


Summary (3)6. The characteristics of buy-side marketplaces

and e-procurement Major procurement methods are

• Reverse auctions (bidding system)• Buying from storefronts and catalogs• Negotiation• Buying from an intermediary that aggregates

sellers’ catalogs• Internal marketplaces and group purchasing• Desktop purchasing • Buying in exchanges or industrial malls• E-bartering

E-procurement offers the opportunity to achieve significant cost and time savings


Summary (4)7. B2B aggregation and group purchasing

Aggregating suppliers’ catalogs into an internal marketplace gives buying companies better control of purchasing costs

In desktop purchasing, buyers are empowered to buy their desktops up to a set limit without the need for additional approval; they accomplish this by viewing internal catalogs with pre-agreed-upon prices with the suppliers

Industrial malls specialize in one industry (e.g., computers) or in industrial MROs (maintenance, repair, and operation); they aggregate the catalogs of thousands of suppliers

Buyers aggregation through group purchasing is very popular because it allows SMEs (small to medium enterprises) to get better prices on their purchases

In addition to direct purchasing, items can be acquired via bartering


Summary (5)8. Other purchasing methods

Desktop purchasing by end users expedites and simplifies the process of buying inexpensive products or services

Buying from e-distributors and at exchanges also is popular, as are auctions and bartering

9. Administrative tasks The major administrative tasks that can be automated

are contract management, spend management, e-sourcing management, and negotiation


Summary (6)10. Infrastructure and standards in B2B

To implement B2B, an organization will need a comprehensive set of hardware and software that includes networks and protocols, multiple servers, application software, and security

Of special utility are extranets and EDI11. Web-based EDI, XML, and Web Services

Traditional EDI systems were implemented over VANs, making EDI inaccessible to most small companies

Web-based EDI can replace or supplement traditional EDITo improve connectivity between business partners’

systems, standards organizations are pursuing XML, a standard for defining data elements

The connectivity of B2B also can be facilitated by Web Services

Chapter 4 B2B E-Commerce. 淡江大學資管系所侯永昌 1 章前故事：通用汽車的 B2B...

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Transcript of Chapter 4 B2B E-Commerce. 淡江大學資管系所侯永昌 1 章前故事：通用汽車的 B2B...