You are on page 1of 5

Online Marketing Strategy Assignment on

Volkswagen Builds Its B2B Net Marketplace

Submitted by Sumit Jain 11020241065

Why didnt Volkswagen want to use a more open or public electronic exchange for its parts supply? Why didnt it join an industry consortium such as Covisint? B2B exchanges can generally be divided into three basic categories. Consortia are typically formed by a group of leading vendors in a particular industry, like Global Food Exchange. Public exchanges such as Commerce One are run by a third party, and are open to all companies that meet the standards defined by the exchange. Private marketplaces are run by a single company and its key suppliers, such those sponsored by Walmart and Dell. Covisint is planned to be the central exchange for the participating manufacturers and other members of the supply chain. General Motors and Ford consolidated their individual exchange initiatives into one industry wide trading exchange. Covisint intends to cover three functional areas of vertical buy side emarkets E-Procurement: Covisint plans to create a global marketplace in which industry participants can buy and sell a wide range of both production and nonproduction material and services. Auctions, Catalogues, requests for quotes as well as a management tool for idle assets will be included. Supply Chain management: Covisint will allow individual organizations to observe the current and future status of their respective supply chains material flows, inventory levels and capacity constraints. Trading partners will communicate and develop production and shipment schedules information and common systems. E-Development: A virtual product workspace will allow real time collaboration and integration among various partners via the internet in a secure environment. Volkswagen has become a large international corporation from where it started and expanded to different worldwide markets and countries. Volkswagen did not join Covisint but announced a strategic partnership with IBM, i2 and Ariba to build a private online market place in April 2000 .Volkswagen is using its own private exchange called as Volkswagen Exchange for its parts supply. Its market focus is on New Components and its Services focus is on E-procurement, Supply chain Management and E-Development.

Volkswagen built a private network because its focus is more on increasing the efficiency of supply chain rather than price reduction. A private exchange is easier to build and setup costs will be lower and costs of integration into own back end systems will also be lower. The more partners are involved in project the more difficult it is to interface their back end IT Systems. Volkswagen can tailor and optimize its markets to its own systems. While flexibility is also considered as one of the reasons so the alliance may make it difficult to act independently. With its proprietary solution Volkswagen retains the option to switch or abandon. If the marketplace model fails, it might be easier for Volkswagen to abandon the project than for competitors that own stakes in a joint venture.

What kinds of services are provided by VWGroupSupply? VW Group Supply.com is the Business Platform of the Volkswagen Group. All brands of the Volkswagen Group cooperate via this interface with their suppliers. The Group Business Platform offers you different applications and information services of the areas procurement, quality assurance area, department for research and development, and logistics. Main services Provided by VW Group supply is Registration Process: Becoming partner on Group business Platform.Ech Partner gets a DUNS number. A Duns Number is the basis for the cooperation with the VW Group and its brands. It is a worldwide, coherent identification number that is assigned by Dun & Bradstreet. Group Business Platform:This is a dynamic platform that is constantly assimilated for an optimally cooperation between the supplier and the Volkswagen Group.This is to enhance the competitiveness Online Catalogue: Online Catalogue is a hierarchy of product and service categories. All products and services handled by the exchange owner company should be consolidated in the catalog. Online Negotiations: Three factors facilitating online negotiation: 1. The products and services that are bundled and customized 2. The computer technology that facilitates the negotiation process

3. The software (intelligent) agents that perform searches and comparisons, thereby providing quality customer service and a base from which prices can be negotiated Capacity management:eCAP Online Enquiries

What is eCAP? And who benefits from its use? eCAP is an Electronic Capacity Management. It is an application that alerts Volkswagen and its suppliers to changes in production trends in order to maintain production at desired levels. It allows suppliers to track the Volkswagen production plans and material requirements in real time online. eCAP also maintains information on over 400 suppliers and 4000 critical paths. Both Volkswagen and its suppliers benefit from Electronic Capacity Management. Volkswagen is able to meet any sudden increase in demand and avoid production bottlenecks. Suppliers can avoid overproduction of suppliers by reducing their output and avoid over supplying Volkswagen with parts.

Do you think suppliers are disadvantaged by this B2B marketplace? A private B2B exchange, mostly, consolidates suppliers and buyers of a specific company, which owns and operates the exchange. Private B2B exchange is a powerful concept, which engulfs a fairly big portion of business processes requiring automation. This is more like a business ecosystem that has an ability to change the way companies think and do business and create tremendous value to their owners. Suppliers of all sizes can access VWGroup Supply with standard web browser software. Limited to suppliers who've done business with one or more companies in the Volkswagen Group and potential new suppliers who go through an authorization process

The system maintains a common data repository with details on each supplier concerning procurement, logistics, production, quality, technical design, and finance.

You might also like