Allison Eickholt, Christian Garcia, Latoya Kennedy, Milo Raphael, Daniel
Sabato, Damaris Sare, Jay Tillet
GROUP 2 CASES
MBA 675 OPERATIONS & MANAGEMENT
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CASE STUDY 1: B2B E-COMMERCE
INTRODUCTION
Historically, when we think about companies being in business and providing products
and services, we think about them doing so for their consumers. As time went on, with the help
of the internet and social media, different industries evolved. We are now seeing businesses
selling goods and providing services to other businesses online, which is called a B2B (business
to business). Contrary to how questionable it may seem when it comes to profits and costs
associated with this business model, many companies are now thriving using this model with the
help of social media and making a profit.
Given that a B2B model is different than a traditional B2C (business to consumer)
approach, it has to be treated accordingly. From the design, to marketing and expansion,
companies have to consider many other factors to be successful and maintain a competitive
advantage. Similar to B2C companies, B2B companies have to establish a strong customer base
to be successful. This task can be a little challenging for B2B companies because they have to
continuously make sure they make a positive impact on its customer financial performance. To
better understand how a B2B model works, we will be looking at several aspects associated
with this model, and three companies (Berlin Packaging, Fedex, and General Motors) for direct
insights.
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WHAT IS A B2B E-COMMERCE
B2B electronic commerce is the sales of products or services between two businesses
through an internet portal. Being able to buy products with a few clicks is easier and faster than
physically going to places, or having to call and speak with a salesperson to order products.
Nowadays, not only are consumers opting more for an online process, but businesses also like
that option and are starting to use it more often than other channels. In order to maintain
customers and remain relevant in the market, more and more companies see that they need to
establish an online presence and give their customers the option to order products online.
B2B BENEFITS
The age of the internet has brought about changes in how society conducts business.
Arguably one of the biggest and most beneficial of those changes is B2B e-commerce. Being
able to do business in an entirely virtual setting has opened up a plethora of doors for small
business and Fortune 500 companies alike. Some of the biggest benefits of B2B e-commerce
include: more business opportunities, lower operating costs, and improved sales.
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Being able to create more opportunities is a major goal for any business regardless of size. A
digital footprint in the form of a website, social media pages, and a virtual shopping platform
allow business to reach further than they ever have before. Customers can buy online at anytime
without ever having to set foot in a physical establishment.
Convenience has played a major role in making e-commerce as successful as it is, and it
will continue to be a factor in the future. In addition to being able to reach more people and grow
a business quickly, e-commerce helps cut operating costs. For small businesses, this could mean
not having to pay rent for a brick and mortar location. For larger businesses, this could mean not
having to pay commission for sales people. E-commerce gives businesses more flexibility to
reach their customers in a low-cost way while still providing quality service. Quality service is a
key factor in driving sales for a business. Convenience and a good experience will create repeat
customers as well as bring in new ones. While it may sound like B2B e-commerce is the ultimate
business tool, it does not come without a price.
B2B COSTS
In order for a company to set up Business to Business electronic commerce, they will
need to incur some costs which can get expensive. This new process will have to be set up in-
house, meaning that the company will have to work with management and staff members to set
up the new process with the supply chain department on how to handle this new style of
transactions. Setting up a new process in any company does take time and money and in order
for this to be effective, there will need to be proper and constant communication between
departments, management, and employees. Depending on the size of the company some will
have the funds to implement this process and others will not.
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A cost that the company will incur and that for sure will be necessary is security cost.
Security is always a concern in any business, especially internet security since this is an
electronic process, security will be utmost important. Before implementing the Business to
Business method, the company will want to know if the website is secure so customer
information and the potential fund transfers will not get hacked. It is crucial that this information
is not accessed by outside companies, especially competitors. If such information is hacked, it
can result in sensitive data being accessed and used in a way that will harm both businesses.
B2B RISKS
Some of the risk of implementing a Business to Business electronic commerce is starting
too soon. Meaning that the company fails to plan sufficiently, which will not give management
