Page 124 - Introduction to Electronic Commerce and Social Commerce

104 4 Business-to-Business E-Commerce

4.1 CONCEPTS, CHARACTERISTICS, 5. Collaborative commerce.
AND MODELS OF B2B E-COMMERCE
The last two categories include activities other than buy-
B2B EC has some special characteristics as well as specific ing or selling inside organizations and among business part-
models, components, and concepts. The major ones are ners. They include, for example, removing obstacles from
described next. the supply chain, communicating, collaborating, sharing
information for joint design and planning, and so forth.
Figure 4.2 illustrates these five B2B types. A brief expla-
Basic B2B Concepts and Process nation follows.

Business-to-business e-commerce (B2B EC), also known
as eB2B (electronic B2B), or just B2B, refers to transactions The Basic Types of B2B E-Marketplaces
between businesses conducted electronically over the and Services
Internet, extranets, intranets, or private networks. Such trans-
actions may take place between a business and its supply The following are the descriptions of the basic types of B2B
chain partners, as well as between a business and a govern- e-marketplaces.
ment, and with any other business. In this context, a business
refers to any organization, private, public, for profit, or non- One-to-Many and Many-to-One: Private
profit. In B2B, companies aim to computerize trading trans- E-Marketplaces
actions and communication and collaboration processes in
order to increase efficiency and effectiveness. B2B EC is In one-to-many and many-to-one markets, one company
very different and more complex than B2C. It is much more does either all the selling (sell-side market) or all the buying
difficult to sell to a company than to individuals. For a com- (buy-side market). Because EC is focused on a single com-
prehensive discussion, see Wirthwein and Bannon (2014). pany’s buying or selling needs, this type of EC is also referred
Key business drivers for electronic B2B (some of which to as company-centric EC. Company-centric market-
were shown in the opening case) are the need to reduce cost, places—both sell-side and buy-side—are discussed in
the need to gain competitive advantage, the availability of a Sections 4.2, 4.3, 4.4, 4.5, and 4.6.
secure Internet platform (i.e., the extranet), and the private
and public B2B e-marketplaces. In addition, there is the Many-to-Many: Public Exchanges (or E-Marketplaces)
need for collaboration between business partners, the need
to reduce transaction time and delays along the supply In many-to-many e-marketplaces, many buyers and many
chain, and the emergence of effective technologies for inter- sellers meet electronically to trade with one another. There
actions and systems integration. Several large companies are different types of such e-marketplaces, which are also
have developed efficient B2B buying and selling systems. known as exchanges (trading communities or trading
An example is “Dell PremierConnect” that is illustrated exchanges). We will use the term exchanges in this book.
in the video “Premier Connect Demo” at youtube.com/ Exchanges are usually marketplaces owned and run by a
watch?v=-GAZlWGJMLI. third party or by a consortium. They are described in more
For B2B statistics, see Pick (2015). detail in Section 4.7. Public e-marketplaces are open to all
interested parties (sellers and buyers). Alibaba.com is an
example of an exchange.
The Basic Types of B2B Transactions
and Activities Supply Chain Improvers and Collaborative Commerce

The number of sellers and buyers and the form of participa- B2B transactions are conducted frequently along segments of
tion used in B2B determine the five basic B2B transaction the supply chain. Therefore, B2B initiatives need to be exam-
activity types: ined in light of other supply chain activities such as procure-
ment of raw materials, fulfilling orders, shipments, and
1. Sell-side. One seller to many buyers. logistics (see Chapter 11). For example, Liz Claiborne, Inc.
2. Buy-side. One buyer from many sellers. (retail fashion company) digitized its entire supply chain,
3. Marketplaces or exchanges. Many sellers to many buyers. reaping substantial results (see case study at gxs.com/assets/
4. Supply chain improvements. uploads/pdfs/caseStudies/CS_L_Claiborne_GXS.pdf).