1. Slide 10.1 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 Strategies for e - Business CONCEPTS and CASES Creating Value through Electronic and Mobile Commerce Chapter 10: Choosing the appropriate strategy for interaction with suppliers

2. Slide 10.2 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 Chapter at a glance 10.1 Advantages and drawbacks of online purchasing 10.2 Classification of B2B e-marketplaces based on the purchasing process and the purchased products 10.3 Classification of B2B e-marketplaces based on their degree of openness 10.4 Integrating e-procurement systems

3. Slide 10.3 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 After this session you should be able to:  Understand the basic concepts and issues in business-to- business e-commerce  Assess the advantages and drawbacks of B2B electronic purchasing  Differentiate B2B e-marketplaces based on the ‘what’ and the ‘how’ of purchasing  Distinguish the different levels of openness in B2B e-marketplaces  Appreciate the functionalities offered by different e-procurement solutions and the trade-offs that companies need to make when choosing one of these solutions  Recognise the increasingly competitive dimension of e-supply chain management. Learning outcomes

4. Slide 10.4 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 10.1 Advantages and drawbacks of online purchasing Advantages and disadvantages of online procurement Advantages of online procurement Higher transparency Reduced risk of Maverick spend Price reduction through online negotiations Process optimisation Organisational risk Technology risk Supplier resistance Disadvantages of online procurement

5. Slide 10.5 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 Operating inputs Manufacturing inputs Spot sourcing Systematic sourcing Yield managers Horizontal markets that enable spot sourcing of operating inputs MRO hubs Horizontal markets that enable systematic sourcing of operating inputs Catalogue hubs Vertical markets that enable systematic sourcing for manufacturing inputs Exchanges Vertical markets that enable spot sourcing for manufacturing inputs How do firms buy? What do firms buy? Exhibit 10.1 The business-to-business (B2B) e-commerce matrix classifies different types of B2B e-marketplaces Source: Adapted from S. Kaplan and M. Sawhney (2000). 10.2 Classification of B2B e-marketplaces based on the purchasing process and the purchased products

6. Slide 10.6 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 Supplier Buyer E-market operator Consortia Degree of openness of e-marketplace high low Fastparts.com Medibuy mondus.com Examples Covisint Transora CitiusNet Dell Computer Wal-Mart 2 Supplier Buyer Public e-markets 1 Private Exchanges 3 Supplier Buyer Exchange owner Source: Adapted from W. Hoffman, J. Keedy and K. Roberts (2002), p. 99. Exhibit 10.2 Different B2B e-marketplaces display varying degrees of openness 10.3 Classification of B2B e-marketplaces based on their degree of openness

7. Slide 10.7 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 Originator selects, requests order Manager approves order Buyer, originator places order Goods received, and delivered Matching and payment CD/web catalogue Integrated e-procurement or ERP system Accounting system E-mail/workflow systems Stock control catalogue Order entry on website Source: D. Chaffey, (2006), pp. 320-321. Exhibit 10.3 E-procurement solutions cover different parts of the supply chain 10.4 Integrating e-procurement systems

8. Slide 10.8 Tawfik Jelassi and Albrecht Enders, Strategies for e-Business, 2 nd edition, © Pearson Education Limited 2008 Summary ■The chapter proposed a classification of B2B e-marketplaces based on what and how companies purchase goods from suppliers. It also discussed varying degrees of openness in B2B e-marketplaces. ■First, this chapter discussed some issues in B2B e-commerce and presented the main advantages and drawbacks of electronic purchasing. The advantages include (1) higher transparency, (2) reduced risk of maverick spend, (3) price reduction through online negotiations and (4) process optimization. Drawbacks consist of (1) organizational risk, (2) technology risk and (3) supplier resistance. ■Second, the chapter suggested a classification of B2B e-marketplaces based on the purchasing process (i.e. the ‘how’ of e-procurement: is it spot or systematic sourcing?) and the types of goods that are purchased online (i.e. the ‘what’ of e-procurement: are they operating or manufacturing inputs?). Based on these two dimensions, four distinct quadrants are recognized; these are ‘MRO hubs’ and ‘Yield managers’ for horizontal e-marketplaces, and ‘Catalogue hubs’ and ‘Exchanges’ for vertical e- marketplaces. ■Third, the chapter identified different levels of openness among B2B e-marketplaces and discussed issues that are specific to each level. At one end of the spectrum, ‘Public e-marketplaces’ have a high a high degree of openness and are accessible to any company. At the other end, ‘Private exchanges’ are e-marketplaces with a low degree of openness and are accessible only upon invitation. In between, ‘Consortia e-marketplaces’ have a medium level of openness and are jointly owned and operated by a few companies. ■Fourth, this chapter recognized the functionalities offered by different e-procurement solutions including stock control systems, database-based workflow systems, accounting systems, and integrated e- procurement system. It also highlighted the trade-offs that companies need to make when choosing among these e-procurement solutions.