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MARKET DYNAMICS

Market dynamics will drive industries through the e-business continuum. These powerful, rather unpredictable forces will also be a major factor in how quickly online trade will develop within any given industry segment. The speed of e-business adoption will vary from one industry to another. Market space structural factors and available e-business technology adoptions will be the ultimate determining factors. For instance, industries that are more innovative yet agile will forge new ways to accommodate customer demands for online buying.

Table 10.1 describes some examples of industrial supply chains and their gradual adoptions of e-commerce solutions.

Table 10.1 Vertical markets with centralized needs

Industry

What's Included

What Moves to E-commerce

Computers and electronics

Semiconductors, manufacturing, wholesale and business retail of hardware, software products

Wholesale, business retail, and manufacturer supply chains

Motor vehicles

Auto components, manufacturing, distribution

Vehicle wholesale, subassembly supply chain, spare parts wholesale

Petrochemicals

Equipment, extraction and refining, manufacturing, distribution

Wholesale and distribution of petroleum, chemicals, and plastics

Utilities

Gas and electric industry equipment, exploration, production, distribution

Transmission and wholesale distribution of gas and electricity, equipment, spare parts

Paper and office products

Paper and furniture manufacturing and supplies, distribution

Distribution and replenishment, manufacturing supply chains

Shipping and warehousing

All modes of transport, warehousing, and logistics

Load tendering commitments, contract bids, dead-load auctions

Food and agriculture

Farm equipment and supplies, farm products, food processing, distribution

Equipment supply chains, grocery and farm supplies distribution, machinery spare parts

Consumer and goods

Manufacture and distribution of appliances, home electronics, leisure goods, furniture, and apparel

Consumer goods wholesale, manufacturing supply chains

Pharmaceutical and medical

R&D, manufacture and wholesale of pharmaceuticals, medical equipment, and supplies

Pharmaceutical distribution, supplies replenishment, medical manufacturing supply chains

Aerospace and defense

Manufacture and wholesale of aircraft, space vehicles, and defense materials

Commercial aircraft spare parts, military replenishment, some manufacturing supply chains

Construction

Logging, construction materials and machinery, fixtures, engineers, contractors, and architects

Project and subcontractor bidding, materials wholesale, replenishment

Heavy industries

Mining, minerals, steel production and wholesale, infrastructure construction

Raw materials and steel wholesale spot markets, construction bidding

Industrial equipment

Industrial machinery and equipment, manufacture and wholesale, industrial supplies

Spare parts and supplies, some wholesale and some supply chain

Source: Forrester Research, November 1998

The current trends in technology, telecommunications, and media markets highlight an increasing interest in e-commerce solutions by supply chain enterprises across many industrial segments. This growth is beginning to gather a great deal of momentum. In fact, some investment analysts believe that the success rate will reach high speeds during the next few years. There are several reasons for this somewhat rapid growth; it is a technologically-focused change. Continuous management of innovation and evolutionary change are also very fundamental to fostering the growth.

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