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eBusiness Strategy, Please see (Order Instructions)
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Business to business exchanges can be defined as business to business online or internet based marketplaces to buy and sell various goods and services. Researches have shown that business is undergoing a process of paradigm shift as a result of the development of the internet…
There is also a reduction in costs of transactions due to use of internet while conducting transactions. The growth of internet therefore, has led to development of B2B exchanges.
They are electronic market places that buyers and sellers do meet. Buyers get a lower price due to open bidding and sellers understands better the movements of the market. The buying firms are envisioned to provision from a variety of relational or transactional and domestic or global sources. Some of B2B exchanges are specific to industries and some of them, marketplaces for a variety of industries business. An example is Verticalnet which is repositioning itself to be a leading supply chain solution provider through the internet. Information provided through industry-specific exchanges included technical manuals to the industry, job placement and training information.
These exchanges were established by buying consortia. They provided buyers an advantage over sellers in that the buyers became the focal point in these buying networks. They were created to get the gain from the buying power of firms so as to obtain lower costs. Processing over the internet gave the expectations of reduction of transaction costs. Examples of the exchanges are Exostar.com from defense industries and aerospace, Novopoint from the food and beverage industry. Another good example is Covisint which was created by the auto majors for the auto industry. (Iyer and David, 2004).
Firms such as Cisco, IBM and Dell were the first firms to adopt this technology. These firms implement platforms for supply chain example being SAP that found it easy to extend the platform to the web. Firms developed selling agencies that could be tied in an easy way into their buying exchanges. A good example is GE Polymer land buying and selling corporate exchange for Dell and GE. The main strength of buying and selling corporate exchange is a reduction of cost ...
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