Chapter 6 Public B2B Exchanges, Directories and Other Support Services Class Exercises

1. Chapter 6Public B2B Exchanges, Directories and Other Support ServicesClass Exercises Jason Chou-Hong Chen, Ph.D. Professor of MIS Graduate School of Business, Gonzaga University Spokane, WA 99223 USA chen@jepson.gonzaga.edu

2. Application Case 6.2: Global Transportation Network Ocean Portal (p.272) 1. Identify the critical success factors of this exchange. • The factors are early liquidity, ownership, governance, openness and a range of services. 2. Is a consortium the best type of ownership for this kind of exchange? • Responses will vary. 3. Although there are thousands of shippers, some of them are very big (e.g. Wal-Mart). Does it make sense to have them create a shipper’s exchange? Why or why not? • Responses will vary.

3. Application Case 6.2: Global Transportation Network Ocean Portal (p.272-cont.) 4. What motivates a carrier to participate in the exchange? • The incentive is additional contracts. 5. What motivates a shipper to participate in the exchange? • The incentive is reduced price. 6. How was customer service improved by the exchange? • It allowed for greater communication and information flow. 7. Research GT Nexus’ on-demand model and list its capabilities. • Student responses will vary.

4. Application Case 6.3: Asite’ B2B E-Marketplace for the Construction Industry(p.289) 1. Identify the success factors of this company (see the list of success factors in Section 6.9). • The factors are early liquidity, ownership, governance, openness and a range of services. 2. How would you classify the ownership of this e-marketplace? • It is run by a co-op. 3. Examine the Webcor Application Case in Chapter 7. How does Webcor differ from Asite? How is it similar? • Webcor also uses EC technology to enable communication and collaboration, but not in a portal setting.

5. Application Case 6.3: Asite’ B2B E-Marketplace for the Construction Industry(p.289-cont.) 4. Enter asite.com and read about new developments (those within the last 6 months). • Responses will vary. 5. What is the exchange’s revenue model? • The firm appears to have a revenue model based on consulting and IT solutions. 6. Using the classification scheme presented in this chapter, is asite.com a portal or an exchange? • This appears to be an exchange. 7. Examine the site’s tendering, procurement, and project management tools. • The site appears to offer a wide array of tools.

6. Market Liquidity • Market liquidity: • The degree to which something can be bought or sold in a marketplace without affecting its price • Achieve liquidity • sufficient number of participants in the marketplace • sufficient volume of transactions

7. Discussion Board Questions • **9. Explain the importance of early liquidity and describe methods to achieve it. • Early liquidity is very important for exchanges because it puts that exchange in a more competitive position because of easier access to it or the lack of need for additional capital. • The keys to early liquidity focus on increasing transaction volume as quickly as possible. Transaction volume is achieved by having more buyers and suppliers in a network, by increasing transaction volume and decreasing transaction cost.

8. 2. Suppose a manufacturer uses an outside shipping company. How can the manufacturer use an exchange to arrange for the best possible shipping? How can a shipment status be tracked? • The manufacturer can consult an exchange to find a shipper that provides the best overall value. The shipment status can be tracked through that vendor's Web site.

9. 4. Which types of exchanges are most suitable for third-party ownership and why? • Exchanges work best in fragmented markets, seller-concentrated markets, and buyer-concentrated markets. • Exchanges are successful in fragmented markets because of the large number of buyers and sellers and no clear industry leaders. • Exchanges are successful in seller-concentrated markets because of the large number of potential buyers served by a more limited number of sellers. • Exchanges are successful in buyer-concentrated markets because of the large amount of buying conducted by a few large companies.

10. Internet Exercise #5. Most of the major exchanges use an ERP/SCM partner. Enter i2.com and view its solutions. What are the benefits of these ­solutions? • This firm provides a wide variety of solutions to assist in value chain management. According to the Web site, some of the benefits of the solutions include: improved relationships with suppliers, expanding business relationships, focusing on customers, integration of systems across the value chain, rapid network connections and software tailored to specific industries.

11. Real-World Case: IMARKETKOREA(p.298) 1. How do support services benefit the exchange? • The support services make dealing with the exchange and making purchases easier. This increases usage. 2. Relate this case to desktop purchasing (Chapter 5). • The system mirrors many of the ideas of desktop purchasing, but with a focus on MROs. 3. Write a brief summary of the benefits of the exchange to buyers. • Student responses will vary, but will focus on the decreased costs and time involved with acquisition.

12. Real-World Case: IMARKETKOREA(p.298-cont.) 4. Write a brief summary of the benefits of the exchange to sellers. • Student responses will vary, 5. Compare iMK to Alibaba.com. What are the similarities and the differences? • Both appear to be market aggregators, but iMK has a narrower product and market focus.

13. Real-World Case: IMARKETKOREA(p.298-cont.) 6. Much of iMK’s success is attributed to the understanding of the Korean culture and business environment. Given that iMK wants to expand internationally, what could be some of its stumbling blocks? • Student responses will vary but can include coping with variations outside the Korean market and variations in other global markets. 7. Check the recent news and press releases (last 6 months) at imarketkorea.com. Identify expansion patterns. • Student responses will vary based on date of retrieval.