Page 127 - Introduction to Electronic Commerce and Social Commerce

4.1 Concepts, Characteristics, and Models of B2B E-Commerce 107

Table 4.1 Summary of B2B characteristics
Parties to transactions Types of transactions
Direct, seller to buyer or buyer to seller Spot buying
Via intermediaries Strategic sourcing
B2B2C: A business sells to a business, but delivers to individual consumers
Types of materials sold Direction of trade
Direct materials and supplies Vertical
Indirect (MROs) Horizontal
Number and form of participation Degree of openness
One-to-many: sell-side (e-storefront) Private exchanges, restricted
Many-to-one: buy-side Private exchanges, restricted
Many-to-many: exchanges Public exchanges, open to all
Many, connected: collaborative, supply chain Private (usually), can be public

Indirect materials are items, such as office supplies or service industries such as travel, banking, insurance, real
light bulbs, which support operation and production. They estate, and stock trading can be conducted electronically
normally are used in maintenance, repair, and operation for individuals (as discussed in Chapter 3), they also can be
(MRO) activities. Collectively, they are also known as non- conducted electronically for businesses. The major B2B
production materials. services are:

B2B Marketplaces and Platforms

B2B transactions are frequently conducted in marketplaces • Travel and hospitality services. Many large cor-
such as Alibaba.com. B2B marketplaces can be classified as porations arrange their travel electronically through
vertical or horizontal. Vertical marketplaces are those for corporate travel agents. For instance, American
one particular industry or industry segment. Examples Express Global Business Travel offers several tools
include marketplaces specializing in electronics, cars, hospi- to help corporate travel managers plan and control
tal supplies, steel, or chemicals. Horizontal marketplaces their employees’ travel. In addition to traditional
are those in which trading is in a service or a product that is scheduling and control tools, American Express
used in many types of industries. Examples are office sup- offers the following EC-based tools (amexglobal-
plies, cleaning materials, or paint. Alibaba.com is an exam- businesstravel.com/total-program-manage-
ple of a horizontal marketplace. ment):
The types of materials traded and the types of B2B trans-
actions are used to define the B2B marketplaces. One way of – TrackPoint enables locating a traveler in real
classifying these markets is: time.
– Travel Alert provides travel advisories and
• Strategic (systematic) sourcing and indirect materi- updates, such as weather conditions and delays.
als = MRO hubs (horizontal markets for MRO) – Info Point (businesstravel.americanexpress.com/
• Systematic sourcing and direct materials = Vertical mar- info-point) is a website that includes detailed
kets for direct materials information about countries and cities around the
• Spot buying and indirect materials = Horizontal markets world.
for spot sourcing – Meetings and Events (amexglobalbusinesstravel.
• Spot sourcing and direct materials = Vertical markets com/meetings-and-events) assists in managing
meetings, including searching for venues.
The various characteristics of B2B transactions are pre- – American Express has a presence on social net-
sented in summary form in Table 4.1. works (e.g., Facebook, Twitter, YouTube).
– Egencia LLC (egencia.com/en; an Expedia com-
pany) partners with organizations to optimize the
Service Industries Online in B2B organizations’ total travel activities by providing
advice and travel management software. For
In addition to trading products between businesses, ser- details, see egencia.com/en/about-egencia.
vices also can be provided electronically in B2B. Just as