Freemarkets Case Analysis
Individual Case Analysis
FREEMARKETS, Inc.
Electronic Commerce
Contents
I. Introduction
II. Description of the Company
III. Description of the Industry
IV. Description of FreeMarkets Auctions
V. Analysis of Porter?s Five Forces
VI. STEEP and SWOT Analysis
VII. Business Model
VIII. Target Markets
IX. Company Core Competencies
X. Company and Industry Financial Information
XI. Key Company Challenges
XII. Problem Statement
XIII. Strategies and Recommended Actions
XIV. Summary
XV. References
INTRODUCTION
Electronic commerce (e-commerce) has traditionally been separated into two main categories: Business to Business (B2B) and Business to Consumer (B2C). B2B e-commerce is broadly defined as sales of goods and services between firms, transacted over the Internet. B2B e-commerce is by far the largest segment of the Internet economy, accounting for 92% of all electronic commerce worldwide and $450 billion of economic activity in the U.S. last year. B2B
E-commerce is expected to grow at a compound annual rate of 61% and by 2004 will account for 25% of national GDP.
The success of e-commerce generally ? and B2B e-commerce in particular ? stems from its ability to make markets more efficient in an economic sense. B2B has been successful in creating more efficient markets by reducing market risks caused by informational asymmetries and by adding more liquidity to markets.
Added liquidity is a result of an electronic market?s ability to aggregate buyers and sellers at a very low cost, especially when they are spread
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