INTRODUCTION TO ELECTRONIC COMMERCE, (COMM1Q) WEEK 10 Supply Chain Management

CLASSIFICATION BY TRANSACTION B2B - business to business B2C - business to consumer C2C - consumer to consumer C2B - consumer to business Non-business EC Intra-business EC

B2B Uses Extranets and the Internet. Extranet = two or more Intranets connected via Internet, Only enough information made available to allow business, Often security attained using virtual private n/works (VPN). Cost of deploying networks has dramatically fallen - by-product of Internet. Transaction costs have been cut dramatically - a driving force behind B2B adoption.

Key to B2B is SCM Supply Chain Management (SCM) ‘Supply Chain’ means the network of alliances that a company forms with suppliers and distributors to source manufacture and deliver goods and services. Alliances can be just as effective as a single company. SCM= ‘the co-ordination of materials, information and financial flows between all the partners in the alliance’.

B2B Requires SCM Supply Chain Management (SCM) Companies that exploit their supply chain properly gain the competitive advantage. Competition becomes competing supply chains - - pressure on prices, quality, responsiveness, - ever increasing customer expectations.

THE VALUE SYSTEM Accounting Invoicing etc. FIRM SUPPLIERS DISTRIBUTORS/ CUSTOMERS Administration & Personnel. Sales & Marketing Customer Relations Stock control PRODUCTS & SERVICES Distribution MONEY & INFORMATION Operations

SUPPLIERSFIRM DISTRIBUTORS/ CUSTOMERS INTRANETEXTRANET INTERNET THE VALUE SYSTEM

SUCCESS DEPENDS UPON Scalability Interoperability Configurability Compatibility Manageability Availability Reliability Distributability Serviceability Stabiltiy (Turban 2000)

Examples of B2B Supplier Orientated Marketplace – Buyer Orientated Marketplace – Intermediary Orientated Marketplace –

B2C E-tailing: ManufacturerWholesalerDistributorRetailerCustomer ManufacturerCustomer ManufacturerCustomerElectronic Intermediary Direct Marketing – Dis-intermediation Marketing with e-intermediaries – Re-intermediation

Key to B2C is CRM 1. Only 10% of companies can support e-commerce! 2. Sell to existing customers rather than new customers 3. Dissatisfied customers = BAD NEWS. 4. Minimal increases in customer retention = maximal company profits 5. The odds of selling a product or service to an existing customer are three times as high as to a new customer 6. Customers will do business with you again if you deal with complaints swiftly (Sybase Customer Asset Management Solutions:

Examples of B2C Electronic stores – – Electronic Malls – –