Business-to-Business E-Commerce Chapter 4 Business-to-Business E-Commerce

Learning Objectives Describe the B2B field. Describe the major types of B2B models. Discuss the models and characteristics of the sell-side marketplace, including auctions. Describe sell-side intermediaries. Describe the characteristics of the buy-side marketplace and e-procurement. Explain how reverse auctions work in B2B. Describe B2B aggregation and group purchasing models. Define exchanges and describe their major types. Describe third-party exchanges. Describe how B2B can benefit from social networking and Web 2.0. Describe collaborative commerce.

Concepts, Characteristics, and Models of B2B E-Commerce Basic B2B Concepts and Process *Business-to-business e-commerce (B2B EC) The Basic Types of B2B Transactions and Activities Sell-side Buy-side Marketplaces or exchanges Supply chain improvements Collaborative commerce

Figure 4.1 The role of Alibaba.com in B2B

Concepts, Characteristics, and Models of B2B E-Commerce The Basic Types of B2B E-Marketplaces and Services One-to-Many and Many-to-One: Private E-Marketplaces *Company-centric EC Many-to-Many: Public Exchanges (or E-Marketplaces) Exchanges (trading communities or trading exchanges) Public e-marketplaces Supply Chain Improvers and Collaborative Commerce Collaboration

Five Types of B2B E-Commerce

Concepts, Characteristics, and Models of B2B E-Commerce Market Size and Content of B2B B2B Components Parties to the Transaction: Sellers, Buyers, and Intermediaries *Online intermediary Types of Materials Traded: What Do Firms Buy? *Direct materials *Indirect materials *Maintenance, repair, and operation (MRO) B2B Marketplaces and Platforms *Vertical marketplaces *Horizontal marketplaces

Generations of B2B E-Commerce

The Components of B2B

Concepts, Characteristics, and Models of B2B E-Commerce Service Industries Online in B2B Travel and hospitality services Real estate Financial services Banking and online financing Other online services Partner and Supplier Relationship Management Partner relationship management (PRM) The Benefits and Limitations of B2B

One-to-Many: Sell-Side E-Marketplaces Sell-Side Models *Sell-side e-marketplace B2B Sellers Customer Service Sales from Catalogs: Webstore Distributors’ Catalogs Self Service Portals Benefits and Limitations of Online Sales from Catalogs Comprehensive Sell-Side Systems Selling via Distributors and Other Intermediaries

Selling via E-Auctions The Benefits of Auctions on the Sell Side Revenue generation Cost savings Increased “stickiness” Member acquisition and retention Auctioning from the Company’s Own Site Using Intermediaries in Auctions Examples of B2B Forward Auctions

Traditional (Manual) Procurement Process

One-From-Many: E-Procurement at Buy-Side E-Marketplaces Inefficiencies in Traditional Procurement Management *Procurement management *Maverick buying Procurement Methods E-Procurement Concepts *E-procurement (electronic procurement) The Goals and Process of E-Procurement Types of E-Procurement

One-From-Many: E-Procurement at Buy-Side E-Marketplaces Types of E-Procurement The Benefits of E-Procurement The Limitations and Challenges of E-Procurement E-Procurement and Strategic Sourcing

E-Procurement Methods

Reverse Auctions at Buy-Side E-Marketplaces (E-Tendering) *Request for quote (RFQ) The Major Benefits of Reverse Auctions Conducting Reverse Auctions E-Tendering by Governments  Group Reverse Auctions

The Reverse Auction Process

Other E-Procurement Methods *Desktop Purchasing *Group Purchasing Internal Aggregation of Purchasing Orders  External Aggregation for Group Purchasing Buying from Other Sources Acquisition via Electronic Bartering *Bartering exchange Selecting an Appropriate E-Procurement Solution

The Group Purchasing Process

The Community of an Exchange: Flow and Access to Information

B2B Exchanges (E-Marketplaces): Definitions and Concepts Functions of and Services Provided by Exchanges Functions and Services of B2B Exchanges Matching buyers and sellers Facilitating transactions Maintaining exchange policies and infrastructure Services provided by an exchange Ownership of B2B Exchanges Third-Party Independent Exchanges *Consortium Trading Exchanges (CTE)

B2B Exchanges (E-Marketplaces): Definitions and Concepts Dynamic Pricing in B2B Exchanges *Dynamic pricing Advantages, Limitations, and the Revenue Model of Exchanges Revenue Models

B2B in Web 2.0 and Social Networking E-Communities in B2B The Opportunities of Social Commerce in B2B The Use of Web 2.0 Tools in B2B B2B Games *Gamification Virtual Trade Shows and Trade Fairs *Virtual trade show Social Networking in B2B Using Twitter in B2B

B2B in Web 2.0 and Social Networking Examples of Other Activities of B2B Social Networks Location-based services Corporate profiles on social networks Success Stories Strategy for B2B Social Networking The Future of B2B Social Networking

Some B2B Support Mechanisms Organizational Buyer Behavior A Behavioral Model of Organizational Buyers The Marketing and Advertising Processes in B2B *B2B marketing Methods for B2B Online Advertising and Marketing Targeting Customers Affiliate Programs

Some B2B Support Mechanisms B2B Market Research Other B2B Support Mechanisms Collaboration Networks and Supply Chain Facilities Payments The Future of B2B

A Model of Organizational Buyer Behavior

COLLABORATIVE COMMERCE Essentials of Collaborative Commerce Collaborative commerce (c-commerce)* E-collaboration* The Elements and Processes of C-Commerce Collaboration Hubs* Improving Collaborative Commerce

COLLABORATIVE COMMERCE Representative Examples of Collaborative Commerce Vendor-Managed Inventory Systems Vendor-managed inventory (VMI)* Retailer-Supplier Collaboration Reducing Transportation and Inventory Costs Reduction of Design Cycle Time Elimination of Channel Conflict: Collaboration with Dealers and Retailers

Managerial Issues Which B2B model(s) should we use for e-procurement? Which B2B model(s) should we use for online B2B sales? Which solutions and vendor(s) should we select? What is the organizational impact of B2B? What are some ethical issues in B2B? Which type of social network should we use—private (proprietary) or public? Which business processes to automate?

Summary The B2B field. The major B2B models. The characteristics and models of sell-side marketplaces. Sell-side intermediaries. The characteristics of buy-side marketplaces and e-procurement. B2B reverse auctions.

Summary Exchanges defined and the major types of exchanges. B2B aggregation and group purchasing. Exchanges defined and the major types of exchanges. B2B portals. Third-party exchanges. B2B in Web 2.0 and social networks. B2B Internet marketing and other support services.