Kaplan & SawhneyKaplan & Sawhneye-Hubs: The New B2B e-Hubs: The New B2B

Marketplaces Marketplaces

Harvard Business Review, Harvard Business Review, May/June 2000May/June 2000

Prepared by Wesley ShuPrepared by Wesley Shu

Chapter 4 2

Business-To-Business Business-To-Business – B2B – B2B (Continued)(Continued)

► Electronic ExchangesElectronic Exchanges areare E-marketplaces in E-marketplaces in which there are many sellers and many which there are many sellers and many buyers.buyers.

Chapter 4 3

Inputs – What businesses Inputs – What businesses buy?buy?

►Operating inputsOperating inputs maintenance, repair and operating (MRO) maintenance, repair and operating (MRO)

goodsgoods

►Manufacturing inputsManufacturing inputs raw materials and components that go raw materials and components that go

directly into the products or process directly into the products or process

Chapter 4 4

Sourcing – How they buy?Sourcing – How they buy?

►Systematic sourcingSystematic sourcing Regular or recursive sourcing. Each cycle Regular or recursive sourcing. Each cycle

is similar in quantity, content, routing, etc.is similar in quantity, content, routing, etc.

►Spot sourcingSpot sourcing One-shot sourcing. IrregularOne-shot sourcing. Irregular fulfill an immediate need at the lowest fulfill an immediate need at the lowest

possible cost.possible cost.

Chapter 4 5

MRO Hubs (systematic MRO Hubs (systematic operating)operating)

►MRO: maintenance, repair & operatingMRO: maintenance, repair & operating►concentrate on goods with low value. concentrate on goods with low value. ►The transaction cost is relatively The transaction cost is relatively

higher.higher.►Di-sintermediate - bypass existing Di-sintermediate - bypass existing

middlemen in the channelmiddlemen in the channel►E.g., E.g., mro.commro.com (IBM subsidiary) (IBM subsidiary)

Chapter 4 6

Catalog HubsCatalog Hubs

►Systematic, manufacturingSystematic, manufacturing► Industry specific (manufacturing inputs Industry specific (manufacturing inputs

are moer specific than operating are moer specific than operating ones.) – the only difference from MRO ones.) – the only difference from MRO HubsHubs

Chapter 4 7

Yield ManagerYield Manager

►Spot, operatingSpot, operating►Good in the case of high price and Good in the case of high price and

demand volatility anddemand volatility and►Things not easy to liquidate or acquire, Things not easy to liquidate or acquire,

e.g., huge fixed asset, e.g., huge fixed asset, human resourceshuman resources..

Chapter 4 8

ExchangesExchanges

►Spot, manufacturingSpot, manufacturing►Exchange input parts to manage peaks Exchange input parts to manage peaks

and ebbsand ebbs►First, establish relationships among First, establish relationships among

manufacturersmanufacturers►Exchange parts, especially materialsExchange parts, especially materials