Chapter 4Business-to-Business E-Commerce

Learning Objectives1. Describe the B2B field.2. Describe the major types of B2B models.3. Discuss the models and characteristics of the

sell-side marketplace, including auctions.4. Describe sell-side intermediaries.5. Describe the characteristics of the buy-side

marketplace and e-procurement.6. Explain how reverse auctions work in B2B.

Learning Objectives7. Describe B2B aggregation and group purchasing

models.8. Define exchanges and describe their major

types.9. Describe B2B portals.10.Describe third-party exchanges.11.Describe how B2B can benefit from social

networking and Web 2.0.12.Provide an overview of the major B2B support

services.

Concepts, Characteristics, and Models of B2B E-

Commerce• Basic B2B Concepts and Process

o *Business-to-business e-commerce (B2B EC)

• The Basic Types of B2B Transactions and Activities1.Sell-side2.Buy-side3.Marketplaces or exchanges4.Supply chain improvements 5.Collaborative commerce

Concepts, Characteristics, and Models of B2B E-

Commerce• The Basic Types of B2B E-Marketplaces

and Serviceso One-to-Many and Many-to-One: Private E-

Marketplaces • *Company-centric EC

o Many-to-Many: Public Exchanges (or E-Marketplaces)• Exchanges (trading communities or trading

exchanges)• Public e-marketplaces

o 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

o Parties to the Transaction: Sellers, Buyers, and Intermediaries • *Online intermediary

o Types of Materials Traded: What Do Firms Buy?• *Direct materials• *Indirect materials• *Maintenance, repair, and operation (MRO)

o 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

o Travel and hospitality serviceso Real estateo Financial serviceso Banking and online financingo Other online services

• Partner and Supplier Relationship Managemento Partner relationship management (PRM)

• The Benefits and Limitations of B2B

One-to-Many: Sell-Side E-Marketplaces• Sell-Side Models

o *Sell-side e-marketplaceo B2B Sellers o Customer Service

• Sales from Catalogs: Webstoreo Distributors’ Catalogso Self Service Portalso 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 Sideo Revenue generationo Cost savingso Increased “stickiness”o 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• *Buy-side e-marketplaces• Inefficiencies in Traditional

Procurement Managemento *Procurement managemento *Maverick buying

• Procurement Methods• E-Procurement Concepts

o *E-procurement (electronic procurement)o The Goals and Process of E-Procuremento Types of E-Procurement

One-From-Many: E-Procurement at Buy-Side E-

Marketplaces• Types of E-Procurement

o The Benefits of E-Procuremento The Limitations and Challenges of E-

Procuremento E-Procurement and Strategic Sourcing

E-Procurement Methods

Reverse Auctions at Buy-Side

E-Marketplaces (E-Tendering)

• *Reverse auction• *Request for quote (RFQ)• The Major Benefits of Reverse

Auctions• Conducting Reverse Auctions

o E-Tendering by Governments 

• Group Reverse Auctions

The Reverse Auction Process

Other E-Procurement

Methods• *Desktop Purchasing • *Group Purchasing

o Internal Aggregation of Purchasing Orders 

o External Aggregation for Group Purchasing

• Buying from Other Sources • Acquisition via Electronic Bartering

o *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 Conceptso Functions of and Services Provided by

Exchangeso 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 Exchangeso Third-Party Independent Exchanges o *Consortium Trading Exchanges (CTE)

B2B Exchanges (E-Marketplaces): Definitions

and Concepts• Dynamic Pricing in B2B Exchanges

o *Dynamic pricing

• Advantages, Limitations, and the Revenue Model of Exchangeso Revenue Models

B2B Portals and Directories

• B2B Portals: An Overviewo *B2B portals

• Corporate (Enterprise) Portalso *Corporate (enterprise) portalo Types of Corporate Portals

• Portals for Suppliers and Other Partners• Customer Portals• Employee Portals• Executive and Supervisor Portals• *Mobile Portals

o The Functionalities of Portals • *Information portals• *Collaborative portals

B2B Portals and Directories

o Corporate Portal Applications and Issueso The Functionalities of Portals

• *Information portals• *Collaborative portals

o Corporate Portal Applications and Issues

• Directory Services and Search Engines o International Trade Directories

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

o B2B Games • *Gamification

• Virtual Trade Shows and Trade Fairs o *Virtual trade show

• Social Networking in B2B o Using Twitter in B2B

B2B in Web 2.0 and Social Networking

• Examples of Other Activities of B2B Social Networkso Location-based serviceso Corporate profiles on social networkso Success Stories

• Strategy for B2B Social Networking• The Future of B2B Social Networking

Some B2B Support Mechanisms

• Organizational Buyer Behavioro A Behavioral Model of Organizational

Buyers

• The Marketing and Advertising Processes in B2Bo *B2B marketing

• Methods for B2B Online Advertising and Marketingo Targeting Customerso Affiliate Programs

Some B2B Support Mechanisms

• B2B Market Research• Other B2B Support Mechanisms

o Collaboration Networks and Supply Chain Facilities

o Payments

• The Future of B2B

A Model of Organizational Buyer

ehavior

Managerial Issues1. Which B2B model(s) should we use for e-

procurement? 2. Which B2B model(s) should we use for online

B2B sales? 3. Which solutions and vendor(s) should we select? 4. What is the organizational impact of B2B? 5. What are some ethical issues in B2B?6. Which type of social network should we use—

private (proprietary) or public? 7. Which business processes to automate?

Summary1. The B2B field. 2. The major B2B models. 3. The characteristics and models of

sell-side marketplaces. 4. Sell-side intermediaries. 5. The characteristics of buy-side

marketplaces and e-procurement.6. B2B reverse auctions.

Summary7. B2B aggregation and group purchasing.

8. Exchanges defined and the major types of exchanges.

9. B2B portals. 10.Third-party exchanges. 11.B2B in Web 2.0 and social networks. 12.B2B Internet marketing and other

support services.