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Chapter 5 E-business strategy 309

Sell-side
Disintermediation (sell-direct) strategy. 3M has traditionally sold through retail partners, but now offers
some products direct through an e-store (www.3mselect.co.uk).
Create a new online intermediary (countermediation) strategy. This is a strategy 3M has not followed due to
its diversity of products. Instead it has focused on its destination site, www.3m.com which has a tool to
help potential customers to research and select products. Localized content is available for many countries
with ‘Where to Buy’ links to relevant suppliers in these countries. As an example of a countermediation
strategy, in the banking sector, banks such as Barclays have created new portals, such as ClearlyBusiness
(www.clearlybusiness.com), in this case to reach small, start-up businesses online.
Partner with new online or existing intermediary or retailer strategy. 3M has integrated its product cata-
logue with online office retailers such as Euroffice (www.euroffice.co.uk). If a customer is on the 3M site
and reviewing a product, when they select the ‘Where to Buy’ option they are linked directly to the rele-
vant page on Euroffice which enables them to buy. Data is exchanged between 3M and Euroffice using
XML data feeds.
Do nothing! This is not a realistic strategy for any company, but 3M has gradually made the transition to
e-business over a ten-year period. The strength of existing distribution has meant that 3M had to decide
when customer usage of the web became such that it needed to offer new online services. This point, of
course, varies in different markets.

Buy-side
In keeping with its innovative market position, 3M was one of the first organizations to adopt e-procurement
on a large scale. Starting in the mid-1990s, 3M used different e-procurement products to help manage the
enormous task of integrating the buying of a wide range of products from suppliers in many countries. This
gave the typical benefits of e-procurement we will see in Chapter 7, such as compliance with corporate
procurement policies to control spend; control of supplier base; development of strategic relationships with
preferred suppliers; accurate spend information to support further supplier development and better attribution
of spend to budgets permitting better accounting control. 3M used Ariba’s Enterprise Spend Management
(ESM) solutions for sourcing and procurement across the entire business.
Disintermediation (buy direct, bypassing distributors). 3M has used its sourcing system to buy more
services direct from suppliers. In keeping with exploring new business models and services enabled
through e-business, 3M has developed its own HighJump’s RFID-enabled product suite (www.
highjumpsoftware.com) to help its clients with complex, global supply chains to source, manufacturer,
develop and distribute products more readily.
Buy through new intermediaries such as B2B exchanges. 3M was involved in the pilot of the Dell B2B

marketplace launched in 2000 as a supplier, but it did not prove successful for Dell, 3M and other manu-
facturers involved such as Pitney Bowes and Motorola. As we will see in Chapter 7, the use of these
marketplaces has not become widespread since using direct e-procurement with suppliers has proved
more sustainable.
Do nothing!

Decision 6: Supply-chain management capabilities

Supply chain management and e-procurement are discussed further in Chapters 6 and 7.
The main e-business strategy decisions that need to be reviewed are:
How should we integrate more closely with our suppliers, for example through creating an
extranet to reduce costs and decrease time to market?
Which types of materials and interactions with suppliers should we support through
e-procurement?
Can we participate in online marketplaces to reduce costs?