Chapter 12

Case Study

1.       If you were a small chemical company, what concerns would you have about joining Elemica?

Entering into a B2B system can provide many benefits to small businesses, but can also hurt themselves due to the size of their competition. A small firm that does not have their own enterprise system must operate through a closed-loop process, end to end, from the purchase order, to acknowledgements, load tenders and responses, carrier status updates, and dock scheduling. These firms may also not have the capital that is required to invest in the operating system. They would also be putting their products on the B2B website that possesses a market advantage can quickly lose it due to the R&D of other larger companies. One way that this platform may be viewed is that it is an idea center for these larger companies to steal smaller companies ideas and expand their product line.

2.       Elemica provides a community for participants where they can transact, coordinate, and cooperate to produce products for less. Yet these firms also compete with one another when they sell chemicals to end-user firms in the automobile, airline, and manufacturing industries. How is this possible?

Elemica is a process where businesses can exchange, order, and sell products which is helping the industry expand their revenues at a fast pace. These industries cooperate with each other to increase the frequency and transactions that are occurring in the community. These industries are seeking to automate the process which will make them more efficient, cost-effective, and secure. The firms are not necessary with individual sales to businesses because the exposure that they are receiving are drawing in new customers that will replace the old customers. They most likely believe this is a good platform to establish goodwill and obtain new product ideas that will benefit their company.

3.       How does the purchase of Elemica by Thoma Bravo, a private equity firm, change how Elemica fits into the B2B framework illustrated in Figure 12.10?

The purchase of Elemica by Thoma Bravo has allowed the business to obtain a straight forward focus that isnít being driven by multiple parties like other B2B programs are being driven. The company is still an E-procurement that provides access to hundreds of online suppliers offering millions of maintenance and repair parts to other businesses. The firm also focuses on Exchanges which connects hundreds to potentially thousands of suppliers and users in a dynamic, real-time environment. On Figure 12.10, the company would fit into the lower left hand corner of the figure.