All the disinter-mediation worries that existed in the early days of the Internet are back. The difference this time is that they are real. Companies and organizations are set of rules. This is not simple, adjusted automation of a supply chain process, purchase of office supplies on the web, or electronics travel organization on the desktop. Business to business e-commerce is more.
Imagine entire business continents up for sale; once where you can design you own alliance and select your own partners. It is possible to enter very large industries and create new ways of doing business without requiring the billion dollar brand names that currently rule the market. Imagine being able to control your suppliers form both a quality and a pricing perspective. Imagine new and improved trading rules enforced in every transaction. B2b and the internet provide the vehicle and the potential to make this change happen.
With this new times, come new rules and new business players. Business to business e-commerce is becoming a main underpinning of the strategy, operation and technology systems of companies. Understanding these components and why they will make such a difference has become crucial to the success of many operations. No other technology or business that influence the business process the marketplace and how business work together with their business partners. But understanding and grasping the huge potential of business to business is not easy. As is often the case with new opportunities, there is enormous confusion in the marketplace.
Here’s how it works: Traditionally, business to business activates are conducted with other companies and partners through supply chain or distributor networks. These networks provide the materials, services, components, and products that make up the industry. In turn each company has its own business network, characteristics, business rules, and competitive environment.
Each element in the supply chain provides a link and establishes a firm’s position in the chain. For the most part, these chains have policed themselves, with few rules and international trade agreements keeping them in place. Over the past twenty years, outsourcing and manufacturing components in these chains have moved to the most competitive locations. Market conditions, supply and demand, competitiveness, and distributions options all help determine the most effective location in which to perform part or all of the network’s function. As these chains and networks become more sophisticated, the impact of globalization and of the Internet has extended the reach of the operation and accelerated the rate at which they can be changed.
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