B2B E-Marketplaces—Strategic Archetypes
Nanyang Business School
Nanyang Technology University
M. Lynne Markus
Waltham, MA USA
B2B E-Marketplaces—Strategic Archetypes
Business to business (B2B) e-marketplaces are practically and theoretically interesting.
They enable business process changes that potentially affect organizational performance, and they
are linked to structural shifts from hierarchical to market relationships, with resulting impacts on
product prices. The impacts, however, are likely to depend on the types of e-marketplaces
This paper integrates prior research on e-marketplace attributes, with electronic markets
theory (Malone et al., 1987), strategic positioning theory (Porter, 1985), and the literature on
strategic archetypes (Miller, 1988), to provide a parsimonious theoretical framework for
analyzing e-marketplaces and understanding their impacts. Two broad archetypes (thematically
related sets of attributes that are likely to occur together) are posited from the literature—the
brokerage archetype and the integration archetype.
The framework is applied to two empirical e-marketplaces to illustrate how it can be used
to surface the different configurations of attributes in e-marketplaces. The distinctions we
observed between the e-marketplace configurations, when we applied the framework, were
theoretically based, fine-grained (based on multiple attributes), and parsimonious (thematically
related). We believe therefore, that the framework offers considerable benefits to researchers in
their investigations of e-marketplace performance and impacts.
Business to business (B2B) electronic marketplaces are practically interesting, because
they enable business process changes with potential performance impacts. E-marketplaces are
also theoretically interesting, because they have been linked with shifts from hierarchical to
market-like business relationships (Malone, 1987) and with lower prices for purchased products
The impacts of e-marketplaces, however, are likely to depend on the types of e-
marketplace deployed. There have been several prior attempts to identify essential B2B e-
marketplace attributes (Bakos, 1997; Kaplan and Sawhney, 1999; Davenport, et al., 2001).
Generally, these efforts have captured only a few relevant e-marketplace attributes, and they have
captured different attributes. Consequently, the field lacks a holistic perspective and explicit
guidance about which e-marketplace attributes are most relevant for particular research needs.
This paper unifies prior analyses of e-marketplace attributes into a parsimonious
theoretical framework based on Porter’s (1985, 2001) theory of strategic positioning, Miller’s
(1988) concept of strategic archetypes, and Malone et al.’s (1987) theory of e-marketplace
impacts. We illustrate the framework with examples of actual e-marketplaces. The framework
should be useful in future studies of e-marketplace performance and impacts.
Prior analyses of electronic marketplaces have identified a variety of differentiating
characteristics. Bakos (1997), for example, examined the types of products traded on e-
marketplaces (commodity vs. differentiated), the ownership of e-marketplaces (by intermediaries,
buyers, or sellers), and their communication activities (price vs. product information). Kaplan and
Sawhney (1999) considered type of products traded (direct vs. indirect goods), type of trading
activities (systematic vs. spot sourcing; catalogs, negotiated prices, auctions), and bias (seller-
biased, buyer-biased, or neutral). Wise and Morrison (2000) discussed product attributes
(complexity vs. standardization), product cost, and fragmentation of buyer or supplier base.
Davenport et al. (2001) contrasted e-marketplaces that focus on aggregation of buyers and sellers
(for discovery and matching) and those that focused on integration (for better transaction
efficiency); they note that there may be fundamental trade-offs between these two value
propositions. Finally, Lennstrand et al. (2001) identified value-added contribution (competition
vs. cooperation; disintermediation vs. facilitation of integration), trading mechanisms (catalogs,
auctions, reverse auctions, exchange), sources of revenues (transaction fees, membership fees,
etc.), and ownership structure.
Unfortunately, applying some of these classification schemes can be challenging, since
some empirical e-marketplaces exhibit more than one attribute value on supposedly exclusive
categories. For example, whereas Kaplan and Sawhney (1999) differentiated between e-
marketplaces with catalog mechanisms and e-marketplaces with auction capabilities, Nunes et al.
(2000) noted that many “all-in-one” e-marketplaces provide both catalog and auction services.
Further, while there is clearly some overlap among different e-marketplace classification
schemes, there is also considerable divergence (see Table 1). No one framework encompasses all
attributes identified in the others. Consequently, these frameworks give researchers no consistent
guidance about how the attributes relate to each other and how to select attributes most
appropriate for various research purposes.
We observed that the range of attributes identified in prior analyses can be usefully
classified within the conceptual categories of Porter’s (1985) strategic positioning theory. Doing
so provides a theoretical rationale for hypotheses about the relationships among the attributes and
helps researchers assess the conceptual limitations of selecting certain e-marketplace attributes
over others. Further, using Porter’s framework in combination with Miller’s (1988) concept of
strategic archetypes provides a solid theoretical basis for classifying e-marketplaces in empirical
studies of e-marketplace impacts.
To justify these claims, we first briefly describe Porter’s theory of strategic positioning as
it relates to e-marketplace attributes. Next, we show how Miller’s concept of strategic archetypes
can be used to identify a parsimonious set of e-marketplace types and to differentiate among
Strategic positioning theory
Michael Porter’s (1985) theory of strategic positioning is the dominant perspective on
business strategy. Using it to classify e-marketplace attributes is theoretically advantageous,
because strategic position is theoretically linked to firm performance. Therefore, e-marketplace
types derived from strategic positioning theory can be expected to exhibit relationships with e-
marketplace performance. Further, as we show below, because a strategic positioning analysis of
e-marketplaces encompasses the different “interconnection effects” (communication, brokerage,
and integration effects) of electronic markets theory (Malone et al. 1987), e-marketplace types
derived from strategic positioning theory can also be expected to exhibit relationships with e-
marketplace impacts (e.g., changes in industry structure).
The three key concepts of strategic positioning theory are value proposition, product-
market focus, and value added activities (Porter, 1985; 1996). Briefly, value proposition is the set
of benefits a firm offers its customers. Product-market focus is the way the firm targets its
customer segments and selects its product offerings. Value activities are the things a firm does to
deliver the value proposition to the target product-market segments. Strategic positioning theory
holds that superior performance comes from tight linkages among a distinctive value proposition,
a carefully crafted product-market focus, and a set of unique value activities that cannot be easily
imitated by other firms.
It takes a bit of invention to adapt Porter’s three strategic positioning concepts to e-
marketplaces. First, as intermediaries, e-marketplaces have two types of customers—buyers and
sellers. Buyers and sellers may have very different needs, requiring different value propositions.
For example, the value proposition of brokerage (Malone et al., 1987) may appeal to buyers
through the promise of lower product prices, but may antagonize sellers (Bakos, 1997),
prompting them to avoid an e-marketplace, contributing to its failure. Similarly, the product-
market focus of an e-marketplace may be different for buyers than for sellers. The e-marketplace
may, for example, target large global retailers and small Asian suppliers. Finally, because e-
marketplaces are IT-enabled intermediaries, analysis of their value activities must include
different IT-enabled features for product buying and selling, payment, logistics facilitation, etc.
Table 2 summarizes definitions of Porter’s strategic positioning concepts, their
application to e-marketplaces, and our operationalization of these concepts. A few points bear
We operationalize e-marketplace value proposition in terms of the three electronic
interconnection effect types posited by Malone et al. (1987) to be related to e-marketplace
impacts. The three types are: communication (ability to transmit and access large amounts of
information quickly and at low cost), brokerage (access to large numbers of buyers and
suppliers; ability to search and evaluate many alternatives quickly and at low cost), and
integration (tight coupling of buyers’ and suppliers’ processes, enabling lower inventory
levels and greater responsiveness). It is important to differentiate among these e-marketplace
value propositions, since Davenport et al. (2001) have noted that there may be fundamental
trade-offs among them.
We operationalize e-marketplace product segments in terms of the range of industry
segments (called verticals) in which an e-marketplace participates and the nature of the
products traded (commodity, standardized, differentiated etc.). These attributes have been
identified as important in prior analyses of e-marketplaces (Bakos, 1997; Kaplan and
Sawhney, 2000). We operationalize e-marketplace market segments as the size and
geographic location of buyers and suppliers (Porter, 1985), as well as the e-marketplace
neutrality/bias towards buyers and suppliers. Independently owned e-marketplaces are most
likely to be neutral, while those owed by a single buyer or supplier or by a consortium of
buyers or suppliers are likely to be biased towards the owners’ interests (Bakos, 1997; Wise
and Morrison, 2000; Kaplan and Sawhney, 1999).
While prior research has largely focused on matchmaking activities (Kaplan and Sawheny,
1999; Wise and Morrison, 2000; Lennstand et al.; 2001), we operationalize value activities in
terms of six broad categories of IT-based e-marketplace functionality reflecting the stage of
the procurement cycle being supported (Weller 2000): 1) Content provision (industry news
and discussion forums); 2) Matchmaking (catalogs, request for quote/proposal (RFQ/RFP),
auctions, negotiation); 3) Post-sale transaction automation (online purchase order, invoices,
and payment); 4) Logistics facilitation (warehousing, transportation); 5) Collaboration
support (supply chain management, sharing of inventory information, sharing of design
information; and 6) Other (software implementation services, consulting, training).
Overall, the strategic positioning framework of value proposition, product-market focus,
and value activities encompasses the e-marketplace attributes identified in prior analyses (see
Table 1) as well as electronic markets theory (Malone et al., 1987). In addition, it provides a
theoretical link between e-marketplace attributes and e-marketplace performance and impacts.
One problem remains: The number of distinct e-marketplace strategic positions is
potentially quite large. How can they be clustered for empirical studies of e-marketplace
performance and impacts? The concept of strategic archetypes, developed precisely for this
purpose, is discussed next.
The literature on strategic alignment focuses on the fit between a firm’s strategy and its
environment, because fit is believed to have positive implications for firm performance (Miller,
1988; Venkatraman, 1990; Zajac, 2000). Strategic fit can be understood in two ways—as the
bivariate alignment between pairs of strategic attributes or as the holistic alignment of a
comprehensive set of strategy attributes (Venkatraman, 1990). In recent years, the holistic
approach has been favored, because the concurrent alignment of numerous important attributes is
believed to be more predictive of the performance of empirical firms than the fit between any
particular pair of attributes.
One holistic strategic alignment approach aims to isolate a limited number of strategic
archetypes and to assess the similarity or difference between the archetypes and the
configurations of individual firms. Archetypes are gestalts of frequently recurring clusters of
attributes (Miller, 1988). Archetypes are believed most useful when they posit how and why the
attributes are related. However, when archetypes are derived inductively, theoretical relationships
among attributes are not clear (Miller 1996). Therefore, Miller advocates a process of surfacing
the major theoretical theme(s) that tie the attributes of archetypes together. We use the three
main concepts of Porter’s strategic positioning theory as the theoretical starting point for our
identification of e-marketplace strategic archetypes.
Based on prior e-marketplaces literature, we propose at least two1 broad e-marketplaces
archetypes—brokerage2 and integration. Each archetype exhibits a logical fit among value
proposition, product-market focus, and value activities. The brokerage archetype focuses on
providing buyers and suppliers with improved access to each other for the purpose of better
matching of needs (Malone et al., 1987). The brokerage value proposition fits best with products
An e-marketplace archetype based solely on the communication effect (Malone, 1987) does not appear to
be commercially viable today.
Finer discriminations are possible. Thus, the brokerage archetype may come in single vertical industry
and multiple vertical industry flavors.
that are low cost, commodity or standardized (Bakos, 1997), and markets that are fragmented,
resulting in e-marketplaces that are unbiased or buyer biased. The value activities that closely
support brokerage are aggregated catalogs and/or auctions (Kaplan and Sawhney, 1999). The
integration archetype focuses on improving the efficiency of buyer-supplier interactions through
tighter coupling of their processes. Since integration requires cooperation and standardization of
formats and processes among buyer and seller companies (Davenport et al., 2001), it fits best with
high price differentiated products (Wise and Morrison, 2000) in markets that may be consolidated
on either the supply side (Bakos, 1997) or on demand side. The activities that are required to
support integration include post-transaction automation, logistics facilitation and other
collaboration support (Weller, 2000). Figure 1a and 1b graphically represents the archetypes.
Figure 1a and 1b
We further propose—based on Porter’s strategic positioning theory and the e-marketplace
arguments of Bakos (1997), Davenport et al. (2001), and others—that empirical e-marketplaces
with configurations that more closely match the archetypes will perform better than those whose
configurations exhibit weaker fit. It is beyond the scope of this article to test these propositions.
However, we illustrate our framework’s usability and utility by employing it below to identify
and differentiate the configurations of two empirical e-marketplaces.
The goal of understanding how and why organizations differ (and the potential impacts of
these differences) is best met by rich, qualitative case studies (Miller, 1996). To facilitate valid
comparisons, we selected e-marketplaces that trade in the same category of goods (electronics
components used as direct material inputs for the assembly of electronic products). Within this
sector, we selected two e-marketplaces (Global Sources and Converge) that differ in their market
focus (multi-vertical industry and single vertical industry, respectively), because Porter’s theory
states that market focus is an important aspect of strategic positioning that is associated with
differences in value proposition and value activities, thereby revealing clearly different
Global Sources is an independent e-marketplace that operates in multiple verticals
(electronics being one of the most important). Given its origins as a publisher of trade directories,
we expected it to have a brokerage value proposition. Converge is owned by a consortium of
OEMs and contract manufacturers, and it is narrowly focused on the electronics vertical only.
Many consortium e-marketplaces have integration value propositions, because consortium owners
seek to reduce costs through improving the efficiency of interactions with their buyers or
suppliers. We therefore expected Converge to emphasize the integration value proposition. Table
3 summarizes the key characteristics and histories of the two companies.
Data for the study were obtained from company websites, annual reports, analyst reports
and press articles. The data were read by two independent coders, who assigned codes to each
paragraph, following definitions summarized in Table 2. The Global Sources case was used to
train the coders. The level of agreement between the two independent coders (number of
paragraphs with assigned the same code by both coders divided by the total number of
paragraphs) for the Converge case was 85%.
After coding, within-case analysis was performed by summarizing and classifying the
statements on value proposition, product-market focus, and value activities for each e-
marketplace. The results of the within case analysis are shown in Tables 4 and 5. Configuration
diagrams (Figures 2 and 3) were also prepared from these tables to provide a clearer picture of the
configuration of elements for each e-marketplace.
Global Sources provides information and intermediary services to bring together buyers
and suppliers in global trade who might otherwise have difficulty finding each other—a
communication and brokerage value proposition. (See Table 4 for details.) Although Global
Sources serves many vertical industry segments, it has two main product categories—electronics
and general merchandise—offered by small, Asian suppliers to a limited number of buyer types—
global OEMS and large Western retailers (e.g., JC Penny and Sears). Global Sources performs a
unique service by acting as a neutral, “honest broker” in these target market segments.
Global Sources’ value activities closely fit its value proposition of communication and
brokerage between large Western retailers and OEMs and small Asian suppliers. The company’s
online communication activities are extensive, befitting its 25-year history as a print catalog and
magazine publisher; they are supplemented by its traditional print offerings and CD-ROMs. Its
matchmaking services include online product catalogs (“electronic showrooms”) that suppliers
can customize to better feature their products, a request for information (RFI) feature, product
alerts for buyers, and searching by product, supplier, and country. The Global Sources site does
not, however, support searching on price, nor does it actually enable fully automated online
purchasing. (In 2000, the company began piloting online transaction capability.) However, the
company does provide tools to enable large buyers to manage orders and information about
relevant products and suppliers. And, since many small Asian suppliers have limited IT
knowledge and skills, Global Sources helps them get online. The company has several hundred
sales representatives who visit suppliers and, with the aid of digital cameras and standard
templates on their laptops, help suppliers create and upload their product and company
We characterize Global Sources as a “broad-simple brokerage” configuration, since it
targets many verticals and has few (but well developed) brokerage mechanisms focused on
catalogs, searching, and RFIs. Its value proposition has a good fit with its product-market
segments (standard products, fragmented supplier base, and geographically remote buyers), and is
also well aligned with its primary value activities of content management and matchmaking.
Global Sources’ configuration is depicted in Figure 2.
Because Converge is owned by a consortium of OEMS and first tier electronics suppliers,
we expected it to have an integration value proposition, and, when we first examined Converge, it
did. Today, after its Feb 2001 acquisition (from VerticalNet3, an independent e-marketplace that
operates in multiple verticals, including electronics), of NECX—a well-established and active
electronics exchange—Converge has evolved a value proposition restricted to brokerage and
communication. Having added to NECX’s brokerage functionality, Converge is leveraging
NECX’s exchange expertise, leaving VerticalNet to pursue the integration solutions business
arena. (See Table 5 for details.)
Although Converge has a brokerage value proposition apparently similar to that of
Global Sources, Converge’s configuration looks quite different. (See Figure 3.) First, Converge’s
product-market segmentation is more focused. Converge operates solely in electronics
components and computer products, whereas Global Sources operates in 27 verticals and offers
much general merchandise. Also, whereas Global Sources caters to small Asian suppliers and
large global buyers, Converge appears to be targeting large global buyers and suppliers.
Converge’s greater product-market focus, as well as the relative sophistication of its
customer base, explains Converge’s more extensive brokerage value activities. Compared to
Global Sources, Converge plays a more active role in matching buyers and sellers—for example,
by providing hourly automated searches of unmatched RFQ/RFS (request for quote/requests for
sale) against updated supplier inventory lists and new buyer demand and by having a team of
sourcing specialists locate the products and buyers/suppliers and help in price negotiations.
Converge also offers a wide range of matching activities, including different types of forward and
reverse auctions. Finally, it offers significant logistical facilitation, having its own product
inspection and sanitization facilities, as well as shipment tracking. Overall, we characterize
Converge’s configuration as “focused-complex brokerage”, because it targets a single vertical and
has a comprehensive range of matching and post-matching services.
The strategic archetypes framework enables making distinctions among empirical e-
marketplaces that are theoretically based and simultaneously both fine-grained (that is, based on
multiple important attributes) and parsimonious. Because the framework is theoretically based, it
shows how e-marketplace attributes are related to each other and conceptually linked to
performance and impacts. Because the framework enables fine-grained distinctions, it reveals
VerticalNet, in return, took an equity position in Converge.
interesting observations such as Converge’s radical shift of strategy following the NECX
acquisition. And because the framework enables parsimonious distinctions, strategic
configurations and archetypes can be used successfully in empirical investigations of e-
marketplace performance and impacts.
For example, the high degree of fit between Global Sources’ configuration and that of the
brokerage archetype stands in sharp contrast to the lower degree of fit exhibited by VerticalNet
(Soh and Markus, in press) and helps explain why Global Sources is so much more successful
than VerticalNet. Similarly, the surprising finding of this study that Converge, a consortium e-
marketplace expected to have an integration value proposition, actually has a brokerage value
proposition, might help explain any observed differences in performance between Converge and
other consortium e-marketplaces. In addition, strategic archetypes analysis supports making and
testing predictions about the kinds of impacts e-marketplaces will have. Converge, for example, is
much more likely to drive down prices than Global Sources, since the former has more price
transparency in its matching services. Furthermore, Converge’s strategic bundling of specialized
sourcing and logistics services is better able to support procurement outsourcing by buyers than is
Global Sources’ configuration.
E-marketplaces are interesting—both practically and theoretically—as evidenced by the
growing literature analyzing their attributes and types. In this paper, our contribution is a
parsimonious integration of various prior analyses of e-marketplace attributes with electronic
markets theory (Malone et al., 1987), strategic positioning theory (Porter, 1985), and the literature
on strategic archetypes. This integration involves several elements: identification of important
attributes, operationalizations of these attributes in the specific context of e-marketplaces, and the
positing of theoretical linkages both among the attributes and between the configurations and
such outcomes as performance and impacts. We have illustrated the usability and utility of our
framework with case data. While much work remains to extend the framework and test its
theoretical propositions, we believe that the framework offers considerable benefits to future e-
marketplace theorists and empirical investigators.
Table 1: E-Marketplace Attributes Mapped to Strategic Positioning Theory
Bakos Kaplan & Wise & Davenport Lenn-
(1997) Sawhney Morrison et al. strand et
(1999) (2000) (2001) al.(2001)
Product-Market Focus (Product)
Product-Market Focus (Market)
Ownership – third party,
buyers or sellers
Neutral, buyer or seller
buyers or sellers
Price & Product/ Product
Table 2. Operationalizing Strategic Positioning Concepts for E-Marketplaces
Construct Key Attributes Applied to e- Operationalization in This Study
(Porter, 1985) Marketplaces
Value • Benefits offered • Includes Website statements about benefits to
Proposition to customers communication, buyers and to sellers in three
• Uniqueness of brokerage, and categories:
value integration benefits 1. Communication—ability to
proposition • Uniqueness may transmit and access large amounts
important for a arise from mix of of information quickly and at low
strong strategic types of benefits, as cost
position well as the extent 2. Brokerage—access to large
of the benefits numbers of buyers and suppliers,
consideration of many
alternatives and selection of best
alternative at quickly and at low
3. Integration—tight coupling of
buyer and supplier processes
enabling lower inventory levels,
Product- • Segmentation • E-Marketplaces can Website statements and observed
market based on product be focused capabilities for:
Focus and customer narrowly on few 1. Product segments—
characteristics industries or • Verticals that the e-marketplace is
• Choice of being broadly on multiple in.
broadly targeted industries • Whether the products traded are
(many segments) • The E-marketplace commodity/standardized, (eg. oil,
or narrowly focus refers to agricultural products, standard
focused serving single or electronic components, etc.) or
• Product multiple verticals. differentiated (eg. fashion items,
characteristics • Products can be healthcare services, etc.).
include size, commodity/standar 2. Buyer and seller segments
price features, dized, or • Neutral towards buyers and
performance, differentiated. sellers, or biased (eg. owned by
etc. • Customers include consortium of buyers or sellers).
• Customer both e-marketplace • Size of buyer and seller firms (eg.
characteristics buyers and large multinational corporations,
include industry, suppliers. small and medium enterprises)
buyer strategy, • Buyer and supplier • Geographic location of buyers
technology focus can be and sellers by region—North
sophistication, neutral, buyer or America, Asia, Europe, Middle
size, ownership, seller biased. East
geography, etc. • Buyers/sellers can
be large and few, or
small and many
• Buyers/sellers can
Value • Activities • Value activities Observed website capabilities for:
Activities performed by offered by e- 1. Content provision—industry news,
the firm in marketplace can discussion forums
order to be broadly 2. Matchmaking—aggregated catalogs
provide value classified as: and sellers’ public storefronts,
to customers content capabilities for supplier/product search,
• Distinctive provision, RFP/RFQ, auction/reverse auction, and
value activities matchmaking, online negotiation
contribute to transaction 3. Post-sale transaction automation—
strong strategic processing, buyer’s catalogs and portals, online
position physical P.O., invoicing, payment
• Distinctiveness facilitation, 4. Logistical facilitation—warehousing,
comes from collaboration transportation, quality assurance
different value support 5. Collaboration support—private
activities or sellers’ extranets with pricing
from doing personalized to individual customers,
value activities inventory visibility, design sharing
differently 6. Other—e.g., software licensing,
Table 3: Case Background Data
Global Sources Converge
Key Independent, neutral Consortium-owned
Charac- Multi-vertical industries, including Focused on electronics vertical
teristics electronics. Primarily direct goods
Primarily direct goods
Company • 1971: Began as Asian Sources – a trade • May 2000: Founded with $100m funding
Evolu- directory publication company based in from 15 founders – AMD, Agilent,
tion Hong Kong. Canon, Compaq, Gateway, Hitach, HP,
• 1980s: Separate trade publications for Maxtor, NEC, Samsung, SCI Systems,
electronics, hardware, timepieces, Solectron, Synnex, Tatung, Western
fashion accessories. Digital.
• 1993: Largest trade publisher in Asia • Aim to “deliver supply chain efficiencies”
with 1,300 staff in 29 countries, and “reduce founders’ $200m annual cost
particular strong presence in China. of direct materials by 5 to 10% over the
• Had added CD-ROM versions of next 3 years.”
directories, Chinese language • Jan 2001: Completes acquisition of
trade/executive magazines. NECX from VerticalNet, a global
• 1995: Launched e-marketplace, electronics trading exchange with $1b in
bringing traditional base of Asian annual trades in U.S., Asia and Europe.
suppliers online. Large buyers such as • Enters into a 3 year software licensing
Dell, Compaq also used its marketplace. and services agreement with VerticalNet
• Main revenue source from storefront for VerticalNet’s Solutions platform to
hosting and product listings. form backbone of Converge’s trading
• 1999: Renamed Global Sources. operations.
• 2000-2001: Set up geographically • April 2001: AMR Research’s top trading
focused e-marketplaces for Korea, exchange for the Electronics industry.
Thailand, Singapore, Turkey, India and • June 2001: Announces comprehensive
Malaysia. end-to-end suite of supply chain and
• Piloted online transaction software. collaborative services.
Table 4: Global Sources’ Attributes
Proposi- • “Helping to make global merchandise trade more efficient and effective through integrated cataloging, messaging”
tion • “provider of information to electronics engineers, exporters and executives throughout the Asian region.”
• “enabler of global merchandize trade”
• “allows buyers to efficiently search for goods, either by product or geographic areas,…”
• “present suppliers’ product and company information in a consistent, easily searchable manner…”
• Suppliers get “direct access to more than 259,000 buyers worldwide including a wide selection from the worlds largest buyers”
• “Highly promoted to buyers worldwide” in “print media, on the internet and at trade shows”
Product- Product verticals
Market • 27 industry verticals, 7 sectors (electronics, computers, telecommunications, general merchandise, fashion)
Focus Buyers and suppliers
• Neutral towards buyers and suppliers.
• Large global buyers “that purchase in volume for resale”. “International export suppliers”.
• Mostly smaller, Asian (90%) suppliers
Activities • Daily news reports, industry news, product surveys, special reports, shipping schedules, inspection services, links to travel guide
• Listing of products and suppliers
• Search by product, supplier, country
• New product alerts for buyers
• Supplier marketing websites (storefronts) supported by a “Private Supplier Catalog” content management tool
• Request for Information (RFI)
Post-sale Transaction Automation:
• Private Buyer Catalog tool for large buyers to maintain personalized product and supplier information
• Tools to support management of procurement document flow across departments in multiple languages and currencies
Logistical Facilitation: None
Collaboration Support: None
• Services for suppliers to photograph products, set up catalogs, etc.
• Website software
• Monthly print trade magazines & CD ROMs
• Trade shows
Table 5: Converge’s Attributes
Proposi- • “ generates and publishes a robust set of market information tools and services to help you make more informed purchasing, sourcing and
tion selling services.”
• “systematically and confidentially matches the supply and demand records of more than 6500 Converge trading partners globally,…”
• “Reach a broad supply based to uncover buying opportunities…”, “Reach a broad global customer base to uncover new selling opportunities”
• “Site Market Analyst…sits at customer site,..proactively seeking open market opportunities”
• “…leverage the expertise of Converge Market Specialists…”
• “The overall size of the Converge auction network combined with the guaranteed prominence and credibility of each auction participants,
enables auction to close at optimal market prices.”
• “Strategic sourcing and selling events..to enables buyer and sellers to find and award long-term contractual agreements…proven to get 15-20%
reductions for manufacturers and distributors”
Product- Product verticals
Market • electronic components, computer products and networking equipment
Focus Buyers and suppliers
• Large, well known global buyers and suppliers in the U.S., Asia and Europe
Activities • Pricing trends (spot market pricing), industry news, trading floor news, commodity insight reports, newsletter.
• View results of past auctions
• Master part reference database of 7m unique manufacturer part numbers.
Matchmaking: spot and systematic sourcing
• RFQ/RFS with automated hourly matching against new inventory and demand listings
• On-site market analyst using expertise to with Converge traders and market intelligence team to source or sell.
• Forward and reverse auctions, either open or closed, with/without anonymity of originator.
• Forward to reverse auctions for long-term contracts.
Post-sale Transaction Automation: None
• Product inspection by Converge quality control
• Removing buyer/seller identification from product packaging
• Converge shipment tracking capabilities
• Network of proven 3rd party logistics provides
Collaboration Support: None
Other Activities: None
Figure 1a: Brokerage Archetype
access and matching of
buyers and suppliers
Product-Market Focus Brokerage Value Activities
Low price, Content Management and
Markets: Catalogs and auctions
Fragmented, unbiased or
Figure 1b: Integration Archetype
Lower coordination costs
via tighter coupling of
Product-Market Focus Integration Value Activities
Products: Post transaction
High price, automation, logistics
differentiated/complex facilitation, collaboration
Figure 2: Global Sources’ Configuration
Brokerage and Communications:
Enable global merchandize trade
by providing access to information
on products, buyers and suppliers
Product-Market Value Activities
Moderately specifiable products: Global Content Management:
General merchandize and standard Online industry new, print
electronic components magazines, CD ROM
Many buyers and sellers:
Neutral Brokerage Matchmaking:
Large western buyers Extensive product catalogs
Many smaller Asian suppliers and support for small
Figure 3: Converge’s Configuration
Brokerage and Communications
Access to many buyers and sellers, providing
strong support for matching.
Providing information on electronics
commodity pricing trends and industry trends.
Product-Market Content Management
Commodity pricing reports, part
Focused on single electronics
Converge Comprehensive range of services
Focused – from automated hourly matching of
components such as memory,
Complex RFQ/RFS, Auction (forward/reverse,
Brokerage open/closed, known/anonymous,
Many buyers and sellers within
specialist sourcing services
Neutral towards buyers and sellers.
Large, well known global buyers
Conducts product inspection and
and sellers, OEMS, component
handling, and shipment tracking.
Third-party escrow services
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