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EC5001 Lecture B2B

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EC5001 Lecture B2B

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chenhuan.vi
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© © All Rights Reserved
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Lecture 4 - Part 2:

B2B E-Commerce
 Describe supply chains and
interorganizational business processes
 Define B2B e-commerce
 Describe major types of B2B e-commerce
 A supply chain is a collection of companies
and processes moving a product:
◦ From suppliers of raw materials to
◦ suppliers of intermediate components, to
◦ final production,
◦ to the customer
 Upstream—flow from sources of raw
materials and components
 Downstream—flow to customers
 Suppliers have their own supply chain
◦ A better name: supply network
Simple Traditional Supply Chain

Supplier Manufacturer Distributor Retailer Customer

Supply chain: The flow of materials,


information, money, and services from raw
material suppliers through factories and
warehouses to the end customers

4
Upstream Internal Downstream

2nd Tier Distribution


Suppliers Centers
1st Tier
Assembly/
2nd Tier Suppliers
Manufacturing
Suppliers and
Packaging Retailers
1st Tier
2nd Tier Suppliers
Suppliers

Customers

Key: Information Flow


Physical/ Material Flow
5
 B2B involves exchanges between two or more
businesses
◦ B2B does not include end customers (consumers)
◦ Transactions in supply networks
 Business-to-Business e-commerce (B2B EC)
Transactions between businesses conducted
electronically over the Internet, extranets, intranets, or
private networks; also known as eB2B (electronic B2B)
or just B2B
 B2B EC Characteristics
◦ Parties to the transaction
 Buyers
 Sellers
 Online intermediaries
 Types of B2B transactions
 Spot buying
 Strategic sourcing
 Types of materials
◦ Direct materials
 Replenishment purchasing (contract purchasing)
 Spot purchasing
◦ Indirect materials
◦ MRO (maintenance, repairs, and operations)
◦ 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)
 Corporate portal
A major gateway through which employees,
business partners, and the public can enter a
corporate website
 Examples
 Types of Corporate Portals
 Portals for Suppliers and Other Partners
 Customer Portals
 Employee Portals
 Executive and Supervisor Portals
 mobile portals
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Copyright © 2012 Pearson Education 13
 Portals—access points for business partners.
 Customer Portals / Sell-side e-marketplaces
◦ Single supplier and multiple buyers
◦ MyBoeingFleet, Dell, ….
 Supplier Portals / Buy-side e-marketplaces
◦ Used for procurement
◦ Single buyer and multiple suppliers
◦ HP Supplier Portal
 B2B Marketplaces / B2B exchanges
◦ Operated by third-party vendors
◦ Allow many buyers and many suppliers to interact
◦ Some operate within a vertical market (industry-
specific); for example:
 steellink.com
 paperindex.com
 fibre2fashion.com
◦ Some are not
industry-specific
 Alibaba.com
 Matching buyers and sellers
 Facilitating transactions
 Maintaining exchange policies and
infrastructure
 Different models for different transactions
◦ Highly-specialized purchases: traditional bilateral
relationship between buyers and sellers
 Customization, trust,
 Trend: global sourcing

◦ Commodity: online exchange/electronic auctions


 Liquidity, transparency, price
 B2B version of Amazon’s ecommerce
platform
 Benefits to customers:
◦ Multiple users on one account
◦ Additional payment and credit options
◦ Low prices
◦ Wide selection
◦ Fast delivery
 Benefits to sellers:
◦ Sellers can sell to both businesses and consumers
from the same place, but have the flexibility to
provide different products, content, and pricing to
business buyers.
◦ Sellers can sell large quantities at discounted
prices, provide business-focused product
information, and set up recurring orders.
 B2B-friendly features :
◦ Business-only prices and quantity discounts
◦ Multi-user accounts with a purchase approval
process
◦ Detailed reporting and the ability to connect
purchasing systems
◦ Business purchasing cards, invoice payment terms
and buying on credit
Sellers
One Many

Reverse
Negotiation,
auctions,
One

Bartering,
RFQ,
Bargaining
Tendering
Buyers

Forward
Dynamic
Many

(regular)
exchange
auctions
 Auction: Market mechanism by which buyers
make bids and sellers place offers
◦ Characterized by the competitive and dynamic
nature by which the final price is reached

 Electronic auctions (e-auctions): Auctions


conducted online
 Using negotiation, bargaining or bartering

 Resulting price is based on each party’s


bargaining power, supply and demand in the
item’s market and business environment
factors
 Forward Auction:
◦ An auction in which a seller offers a product to
many potential buyers

 Seller entertains bids from multiple buyers


 Reverse auction (tendering or bidding)
◦ Buyer places an item for bid (tender) on a request
for quote (RFQ) system,
◦ Potential suppliers bid on the job, with price
reducing sequentially
◦ The lowest bid wins

◦ Used mainly in B2B and G2B e-commerce


 Buyers and their bidding prices are matched
with sellers and their asking prices based on
the quantities on both sides and the dynamic
interaction between the buyers and sellers

◦ Stocks
◦ Commodities

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