B2B E-commerce Presented by: Sean Sullivan and Bobby Parizi.

B2B E-commerceB2B E-commerce

Presented by: Presented by:

Sean Sullivan and Bobby Sean Sullivan and Bobby PariziParizi

B2B E-commerceB2B E-commerce

B2B and B2CB2B and B2C– Definitions and differencesDefinitions and differences

B2B MarketB2B Market– Growth and future projectionsGrowth and future projections

Fundamentals of successFundamentals of success– Primary attractions to B2B commercePrimary attractions to B2B commerce

B2B: What is B2B: What is it?it?

Entities, not peopleEntities, not people Intranets, Extranets, and PortalsIntranets, Extranets, and Portals

Portal TypesPortal Types Example Example FunctionFunctionMultiple industriesMultiple industries VerticalNet.comVerticalNet.com B2B infomediary for B2B infomediary for

50+ 50+ industries; hosting industries; hosting site for site for firms, industry sectorsfirms, industry sectors

Single industrySingle industry e-steel.com e-steel.com B2B exchange & portal B2B exchange & portal designed to service needs of designed to service needs of the steel industry.the steel industry.

Sector of single industry Harddollar.comSector of single industry Harddollar.com Construction industry portalConstruction industry portal

specifically focused on roadsspecifically focused on roadsand bridges infrastructure.and bridges infrastructure.

(COURTEY: B2B How to Build a Profitable E-commerce Strategy)(COURTEY: B2B How to Build a Profitable E-commerce Strategy)

B2B: Digital B2B: Digital MarketsMarkets

ProcurementProcurement– Reduced costs of procured itemsReduced costs of procured items– Increased availabilityIncreased availability– Ability to reduce inventory for buyersAbility to reduce inventory for buyers– Controlled procurement processesControlled procurement processes– More effective quality-control standardsMore effective quality-control standards– Improved cash managementImproved cash management– Expanded and improved control over suppliersExpanded and improved control over suppliers


ExchangesExchanges– A place where suppliers, buyers, and intermediaries can congregate and offer A place where suppliers, buyers, and intermediaries can congregate and offer

products to one another within a predefined set of business rules.products to one another within a predefined set of business rules.

Business ModelBusiness Model Transaction TypeTransaction TypeMembership or subscriptionMembership or subscription Fixed annual fee or usage subscription base.Fixed annual fee or usage subscription base.

Percentage of transaction Percentage of transaction Shave of transaction based on pre-agreed Shave of transaction based on pre-agreed model.model.

Referral feeReferral fee Percentage based on agreed-fee basis.Percentage based on agreed-fee basis.

Auction Auction Based on auction rules for buyers and sellers of Based on auction rules for buyers and sellers of products in the exchange.products in the exchange.

Purchase of products/servicePurchase of products/service Based on transaction rules determined beforeBased on transaction rules determined beforeentering and participating in the exchange.entering and participating in the exchange.

(COURTESY: B2B How to Build a Profitable E-commerce Strategy)(COURTESY: B2B How to Build a Profitable E-commerce Strategy)


The Supply ChainThe Supply ChainReasons companies use supply-management systems:Reasons companies use supply-management systems:

- To reduce manufacturing cycle times.- To reduce manufacturing cycle times.- To shorten the product development and manufacturing cycles.- To shorten the product development and manufacturing cycles.- To shorten sales and delivery times.- To shorten sales and delivery times.- To reduce inventory.- To reduce inventory.- To increase revenues.- To increase revenues.- To reduce the cost of goods.- To reduce the cost of goods.

Examples: GM, DellExamples: GM, Dell

B2B: Differences between B2B and B2B: Differences between B2B and B2CB2C

RelationshipsRelationships

BrandingBranding

Industry and the Supply ChainIndustry and the Supply Chain

B2B MarketsB2B Markets

Present value and future Present value and future growthgrowth

B2B: Market growthB2B: Market growth

0

0.5

1

1.5

2

2.5

3

2004

B2BMarket

Forrester Research Forrester Research now estimates now estimates that the B2B that the B2B marketplace will marketplace will exceed more than exceed more than $2.7 trillion dollars $2.7 trillion dollars by 2004.by 2004.



0200400600800

1000120014001600

1999 2002

B to C B to B

Compare with Compare with estimates for the B2C estimates for the B2C market over the same market over the same period, B2B shows a period, B2B shows a 10:1 revenue ratio. 10:1 revenue ratio.

The growth of B2B e-The growth of B2B e-commerce in the U.S. commerce in the U.S. alone is larger than alone is larger than the GNP of many the GNP of many small countries.small countries.

(COURTESY: B2B How to Build a Profitable E-commerce Strategy)(COURTESY: B2B How to Build a Profitable E-commerce Strategy)U.S. E-commerce Transactions (billions)

B2B: Market B2B: Market GrowthGrowth

0102030405060708090

100

1998 1999

19981999

Question for Jeanne M. Lewis, Question for Jeanne M. Lewis, President of Staples.com: What President of Staples.com: What was your go to market strategy was your go to market strategy and how has it changed?and how has it changed?

“ “Initially Staples.com focused on Initially Staples.com focused on selling office supplies. Through the selling office supplies. Through the new Staples.com Business Solutions new Staples.com Business Solutions Center, we have begun to significantly Center, we have begun to significantly build out our small business service build out our small business service offerings. offerings.

We are now truly the place where We are now truly the place where business does business and provide business does business and provide everything a small business needs everything a small business needs from supplies, to essential business from supplies, to essential business services, community and a RFQ services, community and a RFQ marketplace where our customers marketplace where our customers have access to over 20,000 vendors have access to over 20,000 vendors and can participate as sellers”and can participate as sellers”



0 500 1000 1500

Automotive

Chemicals

Office prod.

Electronics

Utilities

e-commerce

all other trade


B2B Volume by industry (billions)


E-commerce business relationships will E-commerce business relationships will account for $7.2 trillion in sales by 2003account for $7.2 trillion in sales by 2003

B2B marketplaces and exchanges will allow B2B marketplaces and exchanges will allow companies to save between $180 and $480 companies to save between $180 and $480 billionbillion

(COURTESY: The eMarketplace Strategies for Success in B2B e-commerce)(COURTESY: The eMarketplace Strategies for Success in B2B e-commerce)

B2B: Fundamentals of B2B: Fundamentals of SuccessSuccess

SecuritySecurity Best PracticesBest Practices Business StructureBusiness Structure Focus on Core CompetanciesFocus on Core Competancies

B2B: Strategies for B2B: Strategies for SuccessSuccess

SecuritySecurity- - You are not safe!!You are not safe!!

- Architectures- Architectures

FirewallFirewall

Virtual Private NetworkVirtual Private Network

Encryption, authentication, & Message Encryption, authentication, & Message IntetrityIntetrity


Best Practices Best Practices

- Think fast, work fast- Think fast, work fast

- Partnerships are essential- Partnerships are essential

- Leverage existing relationships- Leverage existing relationships

- Add value- Add value

- Ditch old market & development - Ditch old market & development plansplans

- Develop your own practices- Develop your own practices

- Build the base first and then - Build the base first and then leverage itleverage it

- Understand supply chains- Understand supply chains

- Leverage your brand- Leverage your brand

- Multiheaded business model- Multiheaded business model

- Go international early- Go international early

- Be prepared to invest $$- Be prepared to invest $$


Business StructureBusiness Structure- - Two different types of B2B companiesTwo different types of B2B companies

• VerticalVertical• HorizontalHorizontal


Focus on Core CompetenciesFocus on Core Competencies

- Reduced purchasing costs- Reduced purchasing costs

- Increased market efficiency- Increased market efficiency

- Greater market intelligence- Greater market intelligence

- Decreased inventory levels- Decreased inventory levels

B2B E-commerce Presented by: Sean Sullivan and Bobby Parizi.

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Transcript of B2B E-commerce Presented by: Sean Sullivan and Bobby Parizi.