Chapter 1

Chapter 4 Part 1B2B E-Commerce

0Learning ObjectivesDescribe the major types of B2B models.Discuss sell-side marketplaceDescribe the characteristics e-procurement.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-11Learning ObjectivesDescribe other procurement methods.Define exchanges and describe their major types.Describe B2B portals.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-22The Basic Types of B2BTRANSACTIONS AND ACTIVITIESSell-sideBuy-sideExchangesSupply chain improvements Collaborative commerceCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-33

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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-55Types of B2B Transactions: How Do Firms Buy?spot buyingThe purchase of goods and services as they are needed, usually at prevailing market prices (commodity exchanges) transaction is usually done within 2 days.

strategic sourcingPurchases involving long-term contracts based on private negotiations between sellers and buyersCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-6

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Types of Materials Traded: What Do Firms Buy?

direct materialsMaterials used in the production of a product (e.g., steel in a car or paper in a book)

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Types of Materials Traded: What Do Firms Buy?

indirect materialsMaterials used to support production (e.g., office supplies or light bulbs)

MRO (maintenance, repair, and operation)Indirect materials used in activities that support productionCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-8

8The Direction of the Tradesvertical marketplacesMarkets that deal with one industry or industry segment (e.g., steel, chemicals)

horizontal marketplacesMarkets that concentrate on a service, material, or a product that is used in all types of industries (e.g., office supplies, PCs)4-9

9The Basic Types of B2BTRANSACTIONS AND ACTIVITIESSell-sideBuy-sideExchangesSupply chain improvements Collaborative commerceCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-1010Types of B2BSupply chain improvements ManufacturingProcurementRaw material shipmentLogistics

Collaborative commerceCommunicationJoint designPlanning Information sharing

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E-Procurement Purchasing

Reverse auctionsNegotiations spot buying, future buyingGroup purchasingMaverick buyingUnplanned purchases of items needed quickly, often at non-prenegotiated higher prices

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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-1414E-Procurement Types of E-ProcurementE-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 auctioningCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-15

15E-Procurement

Types of E-ProcurementE-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 4-1616Other E-Procurement Methodsinternal procurement marketplaceThe aggregated catalogs of all approved suppliers combined into a single internal electronic catalogCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-17

17Other E-Procurement Methodsgroup purchasingThe aggregation of orders from several buyers into volume purchases so that better prices can be negotiatedCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-18

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Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-1919Next weekSell Side.Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-20Sell-Side E-Marketplacessell-side e-marketplaceE-marketplace in which one company sells to many business buyers

E-catalogsAuctionsExtranet4-21

21Forward E-AuctionsForward AuctionsRevenue generationCost savingsIncreased stickinessMember acquisition and retention

Using intermediaries in auctionsCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-22

22B2B Exchanges:

Functions of ExchangesMatching buyers and sellersFacilitating transactionsMaintaining exchange policies and infrastructure

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23Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-24

24B2B Exchanges: OWNERSHIP OF B2B EXCHANGESconsortium 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 4-2525CTEAvendra - redefine supply chain management through strategic procurement processes

Hotel chains and lodging management companiesIndependent hotelsGolf, health and business clubs

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26B2B Exchanges: DYNAMIC PRICING A rapid movement of prices over time and possibly across customers, as a result of supply and demand matchingCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-2727

Copyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-2828B2B Portals and Directoriescorporate portalA major gateway through which employees, business partners, and the public can enter a corporate websiteCopyright 2012 Pearson Education, Inc. Publishing as Prentice Hall 4-29

29Types of Corporate Portals Portals for Suppliers and Other PartnersSuppliers can manage the inventories of the products that they sell to each specific customer online.

Customer PortalsThe can view products and services and to place orders which they can later track4-30

30Types of Corporate PortalsEmployee PortalsTraining, dissemination for company news and information , discussion groups

Executive and Supervisor PortalsSingle worldwide view of the companys finances, and performance4-31

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