Chapter 4 Part 1 B2B E-Commerce

Learning Objectives Describe the major types of B2B models. Discuss sell-side marketplace Describe the characteristics e-procurement. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Learning Objectives Describe other procurement methods. Define exchanges and describe their major types. Describe B2B portals. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

The Basic Types of B2B TRANSACTIONS AND ACTIVITIES Sell-side Buy-side Exchanges Supply chain improvements Collaborative commerce Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Types of B2B Transactions: How Do Firms Buy? spot buying The purchase of goods and services as they are needed, usually at prevailing market prices (commodity exchanges) transaction is usually done within 2 days. strategic sourcing Purchases involving long-term contracts based on private negotiations between sellers and buyers Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Types of Materials Traded: What Do Firms Buy? direct materials Materials used in the production of a product (e.g., steel in a car or paper in a book) Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Types of Materials Traded: What Do Firms Buy? indirect materials Materials used to support production (e.g., office supplies or light bulbs) MRO (maintenance, repair, and operation) Indirect materials used in activities that support production Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

The Direction of the Trades vertical marketplaces Markets that deal with one industry or industry segment (e.g., steel, chemicals) horizontal marketplaces Markets that concentrate on a service, material, or a product that is used in all types of industries (e.g., office supplies, PCs)

The Basic Types of B2B TRANSACTIONS AND ACTIVITIES Sell-side Buy-side Exchanges Supply chain improvements Collaborative commerce Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Types of B2B Supply chain improvements Collaborative commerce Manufacturing Procurement Raw material shipment Logistics Collaborative commerce Communication Joint design Planning Information sharing Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

E-Procurement Purchasing Reverse auctions Negotiations – spot buying, future buying Group purchasing Maverick buying Unplanned purchases of items needed quickly, often at non-prenegotiated higher prices Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

E-Procurement Types of E-Procurement E-sourcing- Identifying new suppliers for a specific category of purchasing requirements. E-tendering- Sending requests for information and prices to suppliers and receiving the responses of suppliers. E-reverse auctioning Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

E-Procurement Types of E-Procurement E-informing- Gathering and distributing purchasing information both from and to internal and external parties. Web-based ERP -creating and approving purchasing requisitions, placing purchase orders and receiving goods and services Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Other E-Procurement Methods internal procurement marketplace The aggregated catalogs of all approved suppliers combined into a single internal electronic catalog Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Other E-Procurement Methods group purchasing The aggregation of orders from several buyers into volume purchases so that better prices can be negotiated Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Next week… Sell Side. Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Sell-Side E-Marketplaces E-marketplace in which one company sells to many business buyers E-catalogs Auctions Extranet

Forward E-Auctions Forward Auctions Using intermediaries in auctions Revenue generation Cost savings Increased “stickiness” Member acquisition and retention Using intermediaries in auctions Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

B2B Exchanges: Functions of Exchanges Matching buyers and sellers Facilitating transactions Maintaining exchange policies and infrastructure

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

B2B Exchanges: 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 Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

CTE Avendra - redefine supply chain management through strategic procurement processes Hotel chains and lodging management companies Independent hotels Golf, health and business clubs

B2B Exchanges: DYNAMIC PRICING A rapid movement of prices over time and possibly across customers, as a result of supply and demand matching Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

B2B Portals and Directories corporate portal A major gateway through which employees, business partners, and the public can enter a corporate website Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall

Types of Corporate Portals Portals for Suppliers and Other Partners Suppliers can manage the inventories of the products that they sell to each specific customer online. Customer Portals The can view products and services and to place orders which they can later track

Types of Corporate Portals Employee Portals Training, dissemination for company news and information , discussion groups Executive and Supervisor Portals Single worldwide view of the company’s finances, and performance