B2b Exchanges And Business Activity Perspective - 1189 Words

â€Å"Business-to-business (B2B) exchanges or marketplaces provide dramatic opportunities to automate collaborative business processes with customers and suppliers, generate internal efficiencies, and reach new markets at minimal cost.† - (Kenjale Phatak, 2002) The epigraph quote from a 2002 article in the CRM magazine provides the commonly used and accepted definition of Business-to-Business (B2B) exchanges. The key differentiating attributes of the B2B Exchanges from the Business-to-Consumer (B2C) exchanges are: the target customers (Business customers such as Resellers, Industrial market, etc.); the nature of demand which is â€Å"derived† based on consumer demand; and the exchange process which are more formal in nature (more purchase†¦show more content†¦366). The Vertical market is based on specific industry sectors, such as the computer manufacturer Dell’s inclusion of chip maker Intel and AMD into its exchange. The Horizontal market is a wider supply market that cuts across several industries, such as FedEx and UPS providing transportation and logistical exchanges for a wide variety of businesses. The Internet provides an immense resource value to both markets. In the vertical market, the dominant resource ben efit is derived from the lower costs of buyers’ operations, lower inventory requirements as well as the removal of distribution channel blockages such as agents and brokers where a Just-in-time (JIT) manufacturing is complemented. In the Horizontal market, the Internet provides: expanded market reach, increase liquidity in the market, reduction of geographical and logistical barriers and more. The second perspective considering the Procurement stages is also noted in the book â€Å"Digital Business – Concepts and Strategy† as, â€Å"Three types of B2B exchanges often illustrate the history of the relationship between a seller and a buyer: new buy, modified rebut, and straight rebuy† (Coupey, 2005, p. 367) which takes the vantage point of procurement activities. In a new buy procurement situation is encountered by building new exchange relationships where the burden of all the procurement process stages (Information