B2B Marketspace

Essay by PaperNerd ContributorUniversity, Master's October 2001

download word file, 12 pages 0.0

B2B Marketspace B2B has set hearts racing in the business world with many businesses rushing to incorporate B2B e-marketplaces into their business strategies. In contrast some have failed to make the connection between B2B e-marketplaces and strategy, believing that B2B is a strategy in itself. Overall, very few businesses have successfully leveraged the possibilities offered by B2B e-marketplaces to produce sustainable competitive advantages. What possibilities do B2B e-marketplaces offer business, are there potentially negative effects and how do B2B e-marketplaces effect strategy? B2B e-marketplaces allow businesses to leverage the inherent qualities of the Internet to make supply chains more efficient, saving time and money. Buyers are attracted to B2B e-marketplaces by the promise of lower prices and more efficient trading. Sellers are attracted to potential efficiencies such as time savings and better use of inventories (Ramsdell, 2000 and Red Herring, 2001). Those are clearly outcomes that can produce operational effectiveness; thus by entering B2B e-marketplaces businesses may have an opportunity to develop competitive advantages based on cost and price advantages (Porter, 2001).

A competitive advantage based on B2B e-marketplace delivered operational efficiency must be sustainable to deliver long term value. However, sustainability requires that the competitive advantage be difficult for competitors to copy and substitute (O'Keeffe, 2001). Operational efficiencies gained through involvement in B2B e-marketplaces are not proprietary to any one firm, most firms that engage in B2B e-marketplace trading will develop similar efficiencies. Thus over the long term, as more participants in any one industry become involved in B2B e-marketplaces, the competitive advantages experienced by first movers will disappear. B2B e-marketplace will not in themselves develop competitive advantages based upon operational efficiencies as the improvements that B2B e-marketplaces will delivered will be shared throughout an industry over the long term (Porter, 2001).

The possibility that B2B e-marketplaces will increase...

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