Companies of all sizes are increasingly looking to the Internet as a means to expand their global operations. However, the Internet is not just about e-commerce:
The real story is the profound impact this medium will have on corporate strategy, organization and business models. Our research reveals that the Internet is driving global marketplace transformation and paradigm shift in how companies get things done, how they compete and how they serve their customers.
While the benefits of 1328 are many, including rapid entrance into new geographic markets, as shown in Exhibit 6-6, less touted are the many challenges inherent in a global B2B strategy These include cultural differences and varying busi-ness models, governmental wrangling and border conflicts, in particular the question over which country has jurisdiction and responsibility over disputes regarding cross-border electronic transaction Potential problem areas that managers must assess in their global environmental analysis include conflicting consumer protection, intellectual property and tax laws, increasing isolationism even among democracies, language barriers, and a lack of tech-savvy legislators worldwide.
Savvy global managers will realize that e-business cannot be regarded as just an extension of current businesses. It is a whole new industry in itself, complete with a different pool of competitors, and whole new sets of environmental issues A reassessment of the environment forces in the newly configured industry, using Michael Porter's five forces analytical model, should take account of shifts in relative bargaining power of buyers and suppliers, the level of threat of new competitors, existing and potential substitutes, as well as a present and anticipated competitor analysis$
It is clear that a competitive global B2B strategy must offer a technology solution that goes beyond basic transaction or listing service capabilities.47 To assess the potential competitive position of the company, managers must ask themselves the following:
• Does the exchange provide a technology solution that helps industry-trading partners to do business more efficiently?
• Is the exchange known to be among the top three to five within its vertical industry?
• Does the exchange offer industry-specific technology and expertise that gives it an advantage over generic exchange-builders?
There is no doubt that the global B2B competitive arena is a challenging one, both strategically and technologically. But many companies around the world are plunging in, fearing that they will be left behind in this fast developing global e-marketplace. Included are Fuji Xerox, which has formed a new c-marketplace with NEC and other leading e-commerce players, including Simitomo Corporation, Hewlett Packard Japan, Ltd., Smnisho Computer Systems, and U.S. software developer Ariba, Inc. Their site, PLEOMART (plenty of markets) is a B2B market- place for companies to buy and sell office equipment and supplies, parts, and related solutions services such as consultation, finance, and logistics services on the - - web49 In Melbourne, Australia, the Broken Hill Proprietary Company, Ltd. (BHP), which specializes in natural resources and regional steel for the global market, has launched its own one-stop global e-marketplace. The site provides logistics, sample products, and supply procurements to e-business producer marketplaces. Recently BlIP has conducted a series of Internet-based “reverse” auctions, where suppliers agree on a starting price then bid against each other to lower prices for ferro-alloys. BHP's Francis Egan, vice president global supply, says that BHP already spends about A$1O billion annually on goods and services on-line; he says that “online auctions allow us to move readily, aggregate out buying power and leverage greater savings. . . . The' also provide economies of scale and promote greater efficiency in the supply function itself.”.50
Far from Melbourne, but in a world made smaller by the Internet, Germany's Siemens AG has embarked on a global e-strategy, as described in the accompanying E-Biz Box.
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