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Chapter5,B2BE-Commerce,1,LearningObjectives,DescribetheB2Bfield.DescribethemajortypesofB2Bmodels.Discussthecharacteristicsofthesell-sidemarketplace,includingauctions.Describethesell-sidemodels.Describethecharacteristicsofthebuy-sidemarketplaceande-procurement.ExplainhowreverseauctionsworkinB2B.,2,LearningObjectives,DescribeB2Baggregationandgrouppurchasingmodels.Describeotherprocurementmethods.Defineexchangesanddescribetheirmajortypes.DescribeB2Bportals.Describethird-partyexchanges.Describepartnerrelationshipmanagement(PRM).,3,Concepts,Characteristics,andModelsofB2BEC,BASICB2BCONCEPTSbusiness-to-businesse-commerce(B2BEC)TransactionsbetweenbusinessesconductedelectronicallyovertheInternet,extranets,intranets,orprivatenetworks;alsoknownaseB2B(electronicB2B)orjustB2B.,4,Concepts,Characteristics,andModelsofB2BEC,5,Concepts,Characteristics,andModelsofB2BEC,THEBASICTYPESOFB2BTRANSACTIONSANDACTIVITIESSell-sideBuy-sideExchangesSupplychainimprovementsandcollaborativecommerce,6,Concepts,Characteristics,andModelsofB2BEC,7,Concepts,Characteristics,andModelsofB2BEC,THEBASICTYPESOFB2BE-MARKETPLACESANDSERVICESOne-to-ManyandMany-to-One:PrivateE-Marketplacescompany-centricECE-commercethatfocusesonasinglecompanysbuyingneeds(many-to-one,orbuy-side)orsellingneeds(one-to-many,orsell-side).privatee-marketplacesMarketsinwhichtheindividualsell-sideorbuy-sidecompanyhascompletecontroloverparticipationinthesellingorbuyingtransaction.,8,Concepts,Characteristics,andModelsofB2BEC,Many-to-Many:Exchangesexchanges(tradingcommunitiesortradingexchanges)Many-to-manye-marketplaces,usuallyownedandrunbyathirdpartyoraconsortium,inwhichmanybuyersandmanysellersmeetelectronicallytotradewitheachother.publice-marketplacesThird-partyexchangesopentoallinterestedparties(sellersandbuyers).SupplyChainImproversandCollaborativeCommerce,9,Concepts,Characteristics,andModelsofB2BEC,B2BCHARACTERISTICSPartiestotheTransaction:Sellers,Buyers,andIntermediariesonlineintermediaryAnonlinethirdpartythatbrokersatransactiononlinebetweenabuyerandaseller;maybevirtualorclick-and-mortar.,10,Concepts,Characteristics,andModelsofB2BEC,TypesofTransactionsspotbuyingThepurchaseofgoodsandservicesastheyareneeded,usuallyatprevailingmarketprices.strategic(systematic)sourcingPurchasesinvolvinglong-termcontractsthatusuallyarebasedonprivatenegotiationsbetweensellersandbuyers.,11,Concepts,Characteristics,andModelsofB2BEC,TypesofMaterialsTradeddirectmaterialsMaterialsusedintheproductionofaproduct(e.g.,steelinacarorpaperinabook).indirectmaterialsMaterialsusedtosupportproduction(e.g.,officesuppliesorlightbulbs).MRO(maintenance,repair,andoperation)Indirectmaterialsusedinactivitiesthatsupportproduction.,12,Concepts,Characteristics,andModelsofB2BEC,DirectionofTradeverticalmarketplacesMarketsthatdealwithoneindustryorindustrysegment(e.g.,steel,chemicals).horizontalmarketplacesMarketsthatconcentrateonaservice,material,oraproductthatisusedinalltypesofindustries(e.g.,officesupplies,PCs).,13,Concepts,Characteristics,andModelsofB2BEC,SUPPLYCHAINRELATIONSHIPSINB2BVIRTUALSERVICEINDUSTRIESINB2BTHEBENEFITSOFB2B,14,One-to-Many:Sell-sideE-Marketplaces,SELL-SIDEMODELSANDACTIVITIESsell-sidee-marketplaceAWeb-basedmarketplaceinwhichonecompanysellstomanybusinessbuyersfrome-catalogsorauctions,frequentlyoveranextranet.B2BSellersCustomerService,15,One-to-Many:Sell-sideE-Marketplaces,16,One-to-Many:Sell-sideE-Marketplaces,DIRECTSALESFROMCATALOGSConfigurationandCustomizationBenefitsandLimitationsofDirectSalesfromCatalogsDIRECTSALES:THEEXAMPLEOFCISCOSYSTEMS,17,SellingViaIntermediariesandDistributors,Manufacturersfrequentlyuseintermediariestodistributetheirproductstoalargenumberofbuyers.Theintermediaries(knownasdistributors)usuallybuyproductsfrommanyvendorsandaggregatethemintoonecatalogfromwhichtheysell.,18,SellingViaAuctions,USINGAUCTIONSONTHESELLSIDERevenuegenerationCostsavingsIncreased“stickiness”Memberacquisitionandretention,19,SellingViaAuctions,AUCTIONINGFROMTHECOMPANYSOWNSITEUSINGINTERMEDIARIESINAUCTIONSEXAMPLESOFB2BFORWARDAUCTION,20,One-from-Many:Buy-SideE-MarketplacesandE-Procurement,buy-sidee-marketplaceAcorporate-basedacquisitionsitethatusesreverseauctions,negotiations,grouppurchasing,oranyothere-procurementmethod.,21,One-from-Many:Buy-SideE-MarketplacesandE-Procurement,PROCUREMENTMETHODSe-sourcinge-tenderinge-reverseauctioninge-informingWeb-basedERP(electronicresourceplanning)e-MRO(maintenance,repair,andoperating),22,One-from-Many:Buy-SideE-MarketplacesandE-Procurement,INEFFICIENCIESINTRADITIONALPROCUREMENTMANAGEMENTProcurementmanagementTheplanning,organizing,andcoordinatingofalltheactivitiesrelatingtopurchasinggoodsandservicesneededtoaccomplishtheorganizationsmission.maverickbuyingUnplannedpurchasesofitemsneededquickly,oftenathigherprices,notpre-negotiated.,23,One-from-Many:Buy-SideE-MarketplacesandE-Procurement,THEGOALSANDBENEFITSOFE-PROCUREMENTe-procurementTheelectronicacquisitionofgoodsandservicesfororganizations.,24,One-from-Many:Buy-SideE-MarketplacesandE-Procurement,25,One-from-Many:Buy-SideE-MarketplacesandE-Procurement,26,Buy-SideE-Marketplaces:ReverseAuctions,requestforquote(RFQ)The“invitation”toparticipateinatendering(bidding)system.CONDUCTINGREVERSEAUCTIONSE-TenderingbyGovernmentsGROUPREVERSEAUCTIONS,27,Buy-SideE-Marketplaces:ReverseAuctions,28,OtherE-ProcurementMethods,internalprocurementmarketplaceTheaggregatedcatalogsofallapprovedsupplierscombinedintoasingleinternalelectroniccatalog.BenefitsofInternalMarketplacesdesktoppurchasingDirectpurchasingfrominternalmarketplaceswithouttheapprovalofsupervisorsandwithouttheinterventionofaprocurementdepartment.,29,OtherE-ProcurementMethods,BUYINGATE-AUCTIONSgrouppurchasingTheaggregationofordersfromseveralbuyersintovolumepurchasessothatbetterpricescanbenegotiated.InternalAggregationExternalAggregation,30,OtherE-ProcurementMethods,31,OtherE-ProcurementMethods,BUYINGFROME-DISTRIBUTORSPURCHASINGDIRECTGOODSELECTRONICBARTERINGbarteringexchangeAnintermediarythatlinkspartiesinabarter;acompanysubmitsitssurplustotheexchangeandreceivespointsofcredit,whichcanbeusedtobuytheitemsthatthecompanyneedsfromotherexchangeparticipants.,32,B2BElectronicExchanges:DefinitionsandConcepts,33,B2BElectronicExchanges:DefinitionsandConcepts,dynamicpricingArapidmovementofpricesovertimeandpossiblyacrosscustomers,asaresultofsupplyanddemandmatching.FUNCTIONSOFEXCHANGESMatchingbuyersandsellersFacilitatingtransactionsMaintainingexchangepoliciesandinfrastructure,34,B2BElectronicExchanges:DefinitionsandConcepts,35,B2BElectronicExchanges:DefinitionsandConcepts,RevenueModelsofExchangesTransactionfeesFeeforserviceMembershipfeesAdvertisingfeesOtherrevenuesourcesB2BportalsInformationportalsforbusinesses.vortalsB2Bportalsthatfocusonasingleindustryorindustrysegment;“verticalportals”.,36,B2BPortals,Directories,andTradingExchanges,THIRD-PARTYANDDIRECTORIESEXCHANGESconsortiumtradingexchange(CTE)Anexchangeformedandoperatedbyagroupofmajorcompaniesinanindustrytoprovideindustry-widetransactionservices.,37,PartnerandSupplierRelationshipManagement,partnerrelationshipmanagement(PRM)Businessstrategythatfocusesonprovidingcomprehensivequalityservicetobusinesspartners.E-COMMUNITIESANDPRM,38,ManagerialIssues,CanwejustifythecostofB2Bapplications?Whichvendor(s)shouldweselect?WhichB2Bmodel(s)shouldweuse?WhataretheethicalissuesinB2B?Willtherebemassivedisintermediation?HowcantrustandloyaltybecultivatedinB2B?Willjoininganexchang
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