Business-to-Business Marketing B2B E-Marketplaces

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Business-to-Business MarketingB2B E-Marketplaces

• Haas School of Business
• UC Berkeley
• Fall 2008
• Week 13
• Zsolt Katona

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B2B Marketplaces are thriving

• Volume is in the order of trillions (2.37
  trillion in 2004)
• 12 times higher than B2C transactions.
• Growth remained robust
• Strong standards (ebXML, RosettaNET) implemented
  by standards organizations (OASIS, UN/CEFACT).

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Examples of Marketplaces
Ownership C2C B2C B2B
Seller owned N/A Dell.com, Sonystyle.com Wal-Mart.com Exostar, Elemica, Google AdWords
Buyer owned N/A N/A Quadrem, WorldWide Retail Exchange
Neutral eBay, Yahoo! auctions Ubid.com, Bidz.com, Ariba (Freemarkets)
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Which Marketplace when?
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Which Marketplace when (cont.)

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Ownership
Side 2
Platform
Side 1
Network effects - -
Suppliers
eMarketplace
Buyers
Buyer owned
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Biased Marketplaces seem to win

• Biased marketplaces owned by buyers or sellers
• Independent marketplaces are crowded out
• While they are neutral,
• Biased ones have a greater incentive to reduce
  participation fees to benefit from increased
  network effects (participation).
• Transformation of independent marketplaces
• Turn into market solution providers for biased
  markets
• Become biased by selling out to participants
• Neoforma gives 46 ownership stake to Novation
  (largest US hospital purchasing group)
• MetalSite sells off to steel manufacturers
• ChemConnect partially owned by 46 chemical
  companies

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Private Marketplaces

• Owned by a single buyer/seller
• Buyer owned
• HP (GetSupply)
• Seller owned
• Dell.com (B2B and B2C)
• Google AdWords
• Advantages
• Retained competitive advantage
• Retained information
• Disadvantages
• - Less incentive to increase participation from
  the other side of the market

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Industrat Decision 9