B2c And B2b Web Site Supply Chain Difference
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B2C and B2B Web Site Supply Chain Differences
Ah, the wonders that technology has wrought in the world of business. Or should it be phrased: ah, the wonders that business has called forth from the world of technology? Whether it is the chicken or the egg, many changes have developed and with the advancements in what is now called e-business, businesses and consumers have benefited.
Though e-businesses vary in scope and methods, they can be categorized basically as business-to-consumer (B2C) or a business-to-business (B2B). A B2B model involves transactions between one business and another business. A B2C model involves transactions between a business and individual consumers. The term B2C could be applied to any business or organization selling products/services over the Internet to consumers for their own use. These two categories reflect the external view of e-commerce sites, but a business-to-consumer site could well be described as the end point of a business-to-business-to-consumer supply chain (Patton, S. 2004, The ABCs of B2C).
A company that sells its finished product to consumers on the World Wide Web would be involved in B2C electronic commerce. In addition, when that same company uses the Web to purchase the materials used in the manufacture of its products from other companies that would be B2B electronic commerce or e-procurement-and that is the really big business of e-business. It often requires an entire department to negotiate purchase transactions with suppliers (Patton, 2004).
Schneider refers to the size differences thusly: “In terms of dollar volume and number of transactions, B2B electronic commerce is much greater than B2C electronic commerce. However, the number of supporting business processes is greater than the number of all B2C and B2B transactions combined.” (Schneider, G.P. 2004. Electronic Commerce: The Second Wave, Fifth Annual Edition, pg. 5).
Successful e-commerce necessitates customers orders being fulfilled when and as promised. Increasing focus and investment in supply chain and logistical technologies can contribute a great deal towards accomplishing this. Successful e-business also requires that various systems, which make up a business as well as those of its supply chain partners, are integrated-that the systems can communicate with each other, without requiring human intervention.
As e-business has grown, the role of intermediaries has diminished in importance, since B2C permits sales and direct communication between the business and the end customer. Therefore, one of the key challenges for a traditional business (one which performed its business through the intermediaries) transforming itself into an e-business is to define the role of intermediaries in its supply chain. That may mean a complete re-thinking of the internal and external work and who may be best suited to perform it (Schneider, 2004).
Channel conflict, also called disintermediation, occurs when a manufacturer or service provider completely bypasses a reseller or salesperson and starts selling directly to the customer. Some sectors, especially personal computer and automotive industries, are particularly vulnerable, but service industries (insurance, travel) are susceptible too. Patton cites an example of the challenges that can occur. Several years ago when Levis developed a B2C e-business, it created such a volume of problems that in the end, the company pulled its website after its resellers protested (Patton, 2004).
Now, some that struggled with channel conflict are finding ways to approach e-commerce without upsetting their salespeople. For example, big car companies and manufacturers such as Maytag are setting up websites that allow customers to first make selections from