Business Strategies In E-Business's Supply And Distribution Chain

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2.2 Supply and Distribution Chain

Objectives can be achieved in e-business’s supply and distribution chain because it has obvious competitive advantages compared to traditional business with a shorter cycle period of e-procurement, adequate fulfillments and distribution supporting, diversify payment ways and efficient supply chain management. Also with comparison of Amazon, eBay and Alibaba’s strategies in supply and distribution chains, it is clear to know why they enable to remain growth in both domestic and international market in the future.

Supply chain plays an important role whatever the industry is. In e-commerce, the supply chain can generally contain the following activities: procurement, fulfillment, logistics, making payment
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However, e-procurement is used more commonly in the e-business which is defined the process integrating all procurement activities electronically between Business to Business, Business to Customers and Business to Government business (Mi 2010). Honestly, process of traditional procurement always have at least 5 steps, including select stock channel, inform purchasing department, request for price and terms, create purchase order, receive invoice, make payment and so on (Nader and Maged 2015 and BusinessDictionary 2011). Thus Chaffey (2004) said that normally completion time of whole process is about one week. Particularly, require employees’ coordination to get approval in paper-based in each stage (Noraizah et al., 2016). Comparatively, the process of e-procurement is less complex and the main activities of e-procurement is always with supplier, material and services selection (Deise et al., 2000). For e-business, it is adoptable the simplified procurement process to reduce the cycle time within two days (Nader and Maged 2015). There are a wide range of potential advantages of having e-procurement: reduced transaction cycle (T and Shanthi 2012), reduced costs effectively, increase productivity (Cunningham, 2001), better management control (nextenders 2014) and controlled the inventory level in time (Armor, …show more content…
Amazon has its own Fulfillment Centers Network which has 96 fulfillment centers around the world (MWPVL international 2016). In the year ended 31 December 2015, Amazon spent $12928m mainly in North America and international fulfillment operating and staffing, which increase by 25% comparing to last year (2015 Annual Report). Though, fulfillment centers’ costs continue ascend every year, yet they help businesses scale logistics and reach more customers (Market Realist 2016). In transaction aspect, Amazon not only has long-term relationship with domestic parcel companies, including FedEx, UPS and DHL, also build up its own delivery and logistics business (Business Insider 2016). By contrary, Alibaba is the new entrant to expand into United States, so have to sign the partnership agreement with local logistic suppliers. Alibaba’s logistic strategy is different compared to Amazon which which does not own any warehouses and distribution center (IndustryWeek 2014). Alibaba focus on third party logistics providers (3PLs) as their delivery network (Forbes 2014). Meanwhile, in order to improve the logistic capability in the worldwide, Alibaba spent $249 million in Singapore’s main postal service in 2014 (The Wall Street Journal 2016). Similarly, eBay develops its logistics by using its Global Shipping Program which enable to sell goods to international buyers. In 2014, the strategic agreement

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