Introduction
Prehistoric Computers has built a business of refurbishing laptops and selling them to small and medium sized companies. Now the company is looking into becoming a B-to-B exchange, thus increasing its efficiency and position on the market. According to Managing B-to-B Relationships simulation (2005), "B2B solutions enable businesses to save costs by reducing inventories, lead-time, and demand forecasting errors". Prehistoric Computers must decide whether adopting this strategy would benefit the company and support its primary goals and objectives. Below are pros and cons for making this decision.
Argument "For" a Prehistoric Computer B-to-B Strategy
The B-to-B exchange model is clearly relevant to Prehistoric Computers operations. The exchange is ideal for bringing together the different links of the supply and delivery chain. Exchanges work best for companies placing and receiving multiple small orders, which is exactly what Prehistoric Computers does. It operates with multiple supplies, buying used computers and parts, refurbishing them, and then reselling the refurbished goods to other companies.
A digital exchange has great potential for reducing overhead and maximizing profits by enabling just in time ordering which is very important for an organization such as Prehistoric dealing in technology that becomes obsolete quickly and thus has a very short shelf life. It will also open up new suppliers to Prehistoric and help ensure they are getting the best price possible.
The exchange will not only help on the supply side, but also on the demand side of equation. Taking part in an exchange will grant greater visibility to Prehistoric growing its customer base. This is much more effective than other forms of advertising since it reaches a ...