This paper is a case study of the Ocean Connect.Com. Ocean Connect is an e-market for the purchase and sale of marine fuels. It is a common platform for the buying and selling of fuels, which is sponsored by top leaders of the marine fuel industry.
Give what you have learned about the success and failures of exchanges; identify the success factors of this exchange.
In order to say an e-market or exchange is a successful one, it should have some qualities. “Effective communications are a necessary tool in managing this complexity. And it’s important to remember that price is not the top priority in complex B2B relationships; quality and availability are generally valued higher than price.” (Collaborative Communications Provide the Final and Perhaps most Critical Leg in this Three Legged Stool, p.2). This kind of exchange helps to save time and money as there is no physical meeting of the parties. They can do the auction at the places which are convenient to them. The exchange should be able to accommodate large number of buyers and suppliers in the bidding process. “Online auctions are computerized version of traditional auctions where prices are set by buyers bidding against each other.” (E Markets, Online Auctions and Exchanges). There should be a mechanism to fix a price which is acceptable to the buyers and suppliers. There should be a strong back support or consortium for an exchange; otherwise the exchange may end in failure. To be successful, an exchange must make sure that main suppliers of the particular product are trading in that exchange. There must be a very good business-to-business relationship between the parties who participate in the auction. There should be a proper system of conducting and managing the auctions. The trading fees should be fixed in such a way that the parties who are participating in the auction feel it affordable. Otherwise the exchange may become a failure. The service provided by a good online exchange includes, which might be the reasons for their success, “information exchange, digital catalogs, online auctions, logistics services, supply chain planning, and design collaboration.” (Laseter and Capers 2009).
The oceanconnect.com is having all the qualities required for an online exchange. Mostly the marine fuels are traded on auction basis; the e-market place oceanconnect.com can easily attract the suppliers and buyers of marine fuels as it saves time and money of the buyers and suppliers. Oceanconnect.com allows the users to interact with each other to decide upon the quality, time, place and price. It also gives all the details of the product. The exchange provides facility to compare the prices of different parties and finally reaching an accepted price for both the parties. There are more than 700 members or users from all over the world in this exchange which is the clear proof of the success story of the exchange. (Real-World Case, Chapter Ten: Dynamic Trading: E- Auctions, Bartering, and Negotiations, p.505). They succeeded as they implemented all the requirements needed for an online exchange.
Do you think that the negotiated parameters can be incorporated into the electronic bidding process someday? Why or why not?
I think there is a good scope for incorporating negotiated parameters in the electronic bidding process. It is a commonly known fact that any kind of auction or bidding involves negotiation. So negotiation parameters must be included in the online version (e-market place) of bidding. If negotiation parameters are included in the bidding process, it can ensure a trusted and crystal clear e-marketplace. There are different negotiation models that can be implemented in the auction. They are:
- One-to-one negotiation: Under this model of negotiation, for example, a trader who wants to sell a product first starts negotiation with another trader. The trader who started the negotiation will be having the control over the negotiation process. In an e-marketplace like oceanconnect.com, the website can include parameters for one-to-one negotiation by adding some features to their website, like instant messaging which enables the trader to negotiate with the other trader.
- One-to-many negotiation: Here a trader, who starts the negotiation process, negotiates with more than one supplier. This can be included in an online exchange by way of a video conferencing.
- Many-to-many negotiation: Here many traders negotiate with each other. The electronic market place can provide facility for many-to-many negotiations by incorporating a tool in their websites which enables instant communication between many traders. (Mont and Yearworth 2001).
Some criteria should be fixed to be eligible for participating in the negotiation process, so that it can ensure that only prospective or potential traders participate in the negotiation process.
To conclude, to be a successful e-marketplace, there should be some unique qualities which attract traders. And also, the online exchange should include more and more parameters in their e-market place, so that it will improve their efficiency and thereby attract new traders to that exchange.
Bibliography
Collaborative Communications Provide the Final and Perhaps most Critical Leg in this Three Legged Stool. [online]. P.2. 2009. Web.
E Markets, Online Auctions and Exchanges. [online]. Business Link. 2009. Web.
LASETER, Tim., and CAPERS, Christopher. (2009). E Market Place Survival Strategies: When We Started. [online]. Web.
MONT, Marco Casassa., and YEARWORTH, Mike. (2001). Negotiated Revealing of Trader Credentials in e Market Places Mediated by Trusted and Privacy Aware Admittance Controlled. [online]. Hp Invent. Web.
Real-World Case, Chapter Ten: Dynamic Trading: E- Auctions, Bartering, and Negotiations. DYNAMIC TRADING AT OCEANCONNECT.COM. P.505 (Provided by the student).