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Chapter5 B2BE Commerce 1 LearningObjectives DescribetheB2Bfield DescribethemajortypesofB2Bmodels Discussthecharacteristicsofthesell sidemarketplace includingauctions Describethesell sidemodels Describethecharacteristicsofthebuy sidemarketplaceande procurement ExplainhowreverseauctionsworkinB2B 2 LearningObjectives DescribeB2Baggregationandgrouppurchasingmodels Describeotherprocurementmethods Defineexchangesanddescribetheirmajortypes DescribeB2Bportals Describethird partyexchanges Describepartnerrelationshipmanagement PRM 3 Concepts Characteristics andModelsofB2BEC BASICB2BCONCEPTSbusiness to businesse commerce B2BEC TransactionsbetweenbusinessesconductedelectronicallyovertheInternet extranets intranets orprivatenetworks alsoknownaseB2B electronicB2B orjustB2B 4 Concepts Characteristics andModelsofB2BEC 5 Concepts Characteristics andModelsofB2BEC THEBASICTYPESOFB2BTRANSACTIONSANDACTIVITIESSell sideBuy sideExchangesSupplychainimprovementsandcollaborativecommerce 6 Concepts Characteristics andModelsofB2BEC 7 Concepts Characteristics andModelsofB2BEC THEBASICTYPESOFB2BE MARKETPLACESANDSERVICESOne to ManyandMany to One PrivateE Marketplacescompany centricECE commercethatfocusesonasinglecompany sbuyingneeds many to one orbuy side orsellingneeds one to many orsell side privatee marketplacesMarketsinwhichtheindividualsell sideorbuy sidecompanyhascompletecontroloverparticipationinthesellingorbuyingtransaction 8 Concepts Characteristics andModelsofB2BEC Many to Many Exchangesexchanges tradingcommunitiesortradingexchanges Many to manye marketplaces usuallyownedandrunbyathirdpartyoraconsortium inwhichmanybuyersandmanysellersmeetelectronicallytotradewitheachother publice marketplacesThird partyexchangesopentoallinterestedparties sellersandbuyers SupplyChainImproversandCollaborativeCommerce 9 Concepts Characteristics andModelsofB2BEC B2BCHARACTERISTICSPartiestotheTransaction Sellers Buyers andIntermediariesonlineintermediaryAnonlinethirdpartythatbrokersatransactiononlinebetweenabuyerandaseller maybevirtualorclick and mortar 10 Concepts Characteristics andModelsofB2BEC TypesofTransactionsspotbuyingThepurchaseofgoodsandservicesastheyareneeded usuallyatprevailingmarketprices strategic systematic sourcingPurchasesinvolvinglong termcontractsthatusuallyarebasedonprivatenegotiationsbetweensellersandbuyers 11 Concepts Characteristics andModelsofB2BEC TypesofMaterialsTradeddirectmaterialsMaterialsusedintheproductionofaproduct e g steelinacarorpaperinabook indirectmaterialsMaterialsusedtosupportproduction e g officesuppliesorlightbulbs MRO maintenance repair andoperation Indirectmaterialsusedinactivitiesthatsupportproduction 12 Concepts Characteristics andModelsofB2BEC DirectionofTradeverticalmarketplacesMarketsthatdealwithoneindustryorindustrysegment e g steel chemicals horizontalmarketplacesMarketsthatconcentrateonaservice material oraproductthatisusedinalltypesofindustries e g officesupplies PCs 13 Concepts Characteristics andModelsofB2BEC SUPPLYCHAINRELATIONSHIPSINB2BVIRTUALSERVICEINDUSTRIESINB2BTHEBENEFITSOFB2B 14 One to Many Sell sideE Marketplaces SELL SIDEMODELSANDACTIVITIESsell sidee marketplaceAWeb basedmarketplaceinwhichonecompanysellstomanybusinessbuyersfrome catalogsorauctions frequentlyoveranextranet B2BSellersCustomerService 15 One to Many Sell sideE Marketplaces 16 One to Many Sell sideE Marketplaces DIRECTSALESFROMCATALOGSConfigurationandCustomizationBenefitsandLimitationsofDirectSalesfromCatalogsDIRECTSALES THEEXAMPLEOFCISCOSYSTEMS 17 SellingViaIntermediariesandDistributors Manufacturersfrequentlyuseintermediariestodistributetheirproductstoalargenumberofbuyers Theintermediaries knownasdistributors usuallybuyproductsfrommanyvendorsandaggregatethemintoonecatalogfromwhichtheysell 18 SellingViaAuctions USINGAUCTIONSONTHESELLSIDERevenuegenerationCostsavingsIncreased stickiness Memberacquisitionandretention 19 SellingViaAuctions AUCTIONINGFROMTHECOMPANY SOWNSITEUSINGINTERMEDIARIESINAUCTIONSEXAMPLESOFB2BFORWARDAUCTION 20 One from Many Buy SideE MarketplacesandE Procurement buy sidee marketplaceAcorporate basedacquisitionsitethatusesreverseauctions negotiations grouppurchasing oranyothere procurementmethod 21 One from Many Buy SideE MarketplacesandE Procurement PROCUREMENTMETHODSe sourcinge tenderinge reverseauctioninge informingWeb basedERP electronicresourceplanning e MRO maintenance repair andoperating 22 One from Many Buy SideE MarketplacesandE Procurement INEFFICIENCIESINTRADITIONALPROCUREMENTMANAGEMENTProcurementmanagementTheplanning organizing andcoordinatingofalltheactivitiesrelatingtopurchasinggoodsandservicesneededtoaccomplishtheorganization smission maverickbuyingUnplannedpurchasesofitemsneededquickly oftenathigherprices notpre negotiated 23 One from Many Buy SideE MarketplacesandE Procurement THEGOALSANDBENEFITSOFE PROCUREMENTe procurementTheelectronicacquisitionofgoodsandservicesfororganizations 24 One from Many Buy SideE MarketplacesandE Procurement 25 One from Many Buy SideE MarketplacesandE Procurement 26 Buy SideE Marketplaces ReverseAuctions requestforquote RFQ The invitation toparticipateinatendering bidding system CONDUCTINGREVERSEAUCTIONSE TenderingbyGovernmentsGROUPREVERSEAUCTIONS 27 Buy SideE Marketplaces ReverseAuctions 28 OtherE ProcurementMethods internalprocurementmarketplaceTheaggregatedcatalogsofallapprovedsupplierscombinedintoasingleinternalelectroniccatalog BenefitsofInternalMarketplacesdesktoppurchasingDirectpurchasingfrominternalmarketplaceswithouttheapprovalofsupervisorsandwithouttheinterventionofaprocurementdepartment 29 OtherE ProcurementMethods BUYINGATE AUCTIONSgrouppurchasingTheaggregationofordersfromseveralbuyersintovolumepurchasessothatbetterpricescanbenegotiated InternalAggregationExternalAggregation 30 OtherE ProcurementMethods 31 OtherE ProcurementMethods BUYINGFROME DISTRIBUTORSPURCHASINGDIRECTGOODSELECTRONICBARTERINGbarteringexchangeAnintermediarythatlinkspartiesinabarter acompanysubmitsitssurplustotheexchangeandreceivespointsofcredit whichcanbeusedtobuytheitemsthatthecompanyneedsfromotherexchangeparticipants 32 B2BElectronicExchanges DefinitionsandConcepts 33 B2BElectronicExchanges DefinitionsandConcepts dynamicpricingArapidmovementofpricesovertimeandpossiblyacrosscustomers asaresultofsupplyanddemandmatching FUNCTIONSOFEXCHANGESMatchingbuyersandsellersFacilitatingtransactionsMaintainingexchangepoliciesandinfrastructure 34 B2BElectronicExchanges DefinitionsandConcepts 35 B2BElectronicExchanges DefinitionsandConcepts RevenueModelsofExchangesTransactionfeesFeeforserviceMembershipfeesAdvertisingfeesOtherrevenuesourcesB2BportalsInformationportalsforbusinesses vortalsB2Bportalsthatfocusonasingleindustryorindustrysegment verticalportals 36 B2BPortals Directories andTradingExchanges THIRD PARTYANDDIRECTORIESEXCHANGESconsortiumtradingexchange CTE Anexchangeformedandoperatedbyagroupofmajorcompaniesinanindustrytoprovideindustry widetransactionservices 37 PartnerandSupplierRelationshipManagement partnerrelationshipmanagement PRM Businessstrategythatfocusesonprovidingcomprehensivequalityservicetobusinesspartners E COMMUNITIESANDPRM 38 ManagerialIssues CanwejustifythecostofB2Bapplications Whichvendor s shouldweselect WhichB2Bmodel s shouldweuse WhataretheethicalissuesinB2B Willtherebemassivedisintermediation HowcantrustandloyaltybecultivatedinB2B Willjoininganexchangeforcerestructuring Whichexchangetojo

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