E-Commerce Company-Centric B2B and E-Procurement

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Chapter 6

Company-Centric B2B and E-Procurement

Learning Objectives

Upon completion of this chapter, you will be able to:
1. Describe the B2B field.
2. Describe the major types of B2B models.
3. Discuss the characteristics of the sell-side marketplace, including auctions. 4. Describe the sell-side intermediary models.
5. Describe the characteristics of the buy-side marketplace and e-procurement. 6. Explain how reverse auctions work in B2B.
7. Describe B2B aggregation and group purchasing models.
8. Describe infrastructure and standards requirements for B2B. 9. Describe Web EDI, XML, and Web services.

Content

General Motors’ B2B Initiatives
6.1 Concepts, Characteristics, and Models of B2B EC
6.2One-to-Many: Sell-Side Marketplaces
6.3 Selling Via Auctions
6.4 Sell-Side Cases
6.5 One-from-Many: Buy-Side Marketplaces and E-Procurement
6.6 Buy-Side E-Marketplaces: Reverse Auctions
6.7Other e-Procurement Methods
6.8 Infrastructure, Integration, and Software Agents in B2B E-Commerce Managerial Issues
Real-World Case: Eastman Chemical Makes Procurement a Strategic Advantage Appendix 6A From Traditional to Internet-Based EDI

Answers to Pause/Break Section Review Questions

Section 6.1 Review Questions

1.Define B2B.

Business–to-business e-commerce refers to transactions between businesses conducted electronically over the Internet, extranets, intranets or private networks.

2.Discuss the following: spot buying versus strategic sourcing, direct materials versus indirect materials, and vertical markets versus horizontal markets.

Spot buying is the purchase of goods and services as they are needed, usually at prevailing market prices. In contrast, strategic sourcing is the purchase of goods and services involving long-term contracts that are usually based on private negotiations. Direct materials are the materials that are used in the creation of a product whereas indirect materials are used to support that production. Vertical markets are concentrated in a specific industry whereas horizontal markets concentrate on a product or service that is used across several industries.

3.What are buy-side and sell-side transactions? How are they different?

Buy-side transactions involve one buyer and many sellers whereas sell-side transactions involve one seller and many buyers.

4.What are company-centric marketplaces? Are they public or private?

Company-centric marketplaces focus on a single company’s purchasing needs or selling needs and are generally private entities owned by that company.

5.Define B2B exchanges.

A B2B exchange is a many-to-many e-marketplace, usually owned and run by a third party, in which many buyers and sellers meet electronically to trade with each other.

6.Relate the supply chain to B2B transactions.

The use of business-to-business electronic commerce is generally a part of existing supply chains that are used to make them more efficient.

7.List the B2B service industries.

The virtual service industries in B2B include: travel services, real estate, electronic payments, online stock trading, online financing and other online services.

8.Summarize the benefits of B2B.

These benefits are listed on page 222.

Section 6.2 Review Questions

1.List the types of sell-side B2B transaction models.

The major types of B2B sell-side transactions include selling from electronic catalogs, selling through forward auctions and one-to-one selling.

2.Distinguish between use and nonuse of intermediaries in B2B sell-side transactions.

In some cases, firms may use an intermediary to provide some or all of their sell-side transaction systems. When intermediaries are used, it is generally in the format of an electronic marketplace. The larger the firm, the more likely it is to use a private, and not a third-party intermediary system.

3.Describe customer service in B2B systems.

Customer service in B2B...
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