Elemica Case Study
1. Why is Elemica described as an example of an industry consortia net marketplace? How does it differ from other types of net marketplaces like ChemConnect? Elemica is described as a consortia net marketplace because Elemica is owned by particular members of the industry and not third parties. Their goal is intended to provide long-term market place relationships to supply direct inputs to the manufacturing process.
ChemConnect on the other hand is privately owned by a person. They have a third-party firm which offers a bidding platform for chemical firms, and provides software to coordinate communications among participants in the platform. . If you were the owner of a small chemical company, what concerns would you have about joining Elemica? Some of the concerns about joining Elemica if I were a small business owner would be being concerned that their ability to be able to respond to requests for large quantities of commodities that might be requested by partners. Being with Elemica do require some level of knowledge to use their system.
However, Elemica offers a Web portal for companies that haven’t fully transitioned as like the larger global chemical companies. Overall, Elemica reduces the burden of having IT employees on hand. 3.
Elemica claims to provide a community for participants in which 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? The chemical industry has a history of working with companies both buying and selling items. The Elemica hub is perceived as a neutral trading platform where all can benefit from lower cost to serve, greater efficiencies, and overall more efficient operations that can serve customers better.
By keeping bids and quotations unknown to potential buyers, and the community pool large, members can get a sense of market price and available quantities quite easily without revealing their names. 4. Review the concept of an industry wide private industrial network and describe how Elemica illustrates many of the features of such a network. Elemica as a whole is focused on building long term relationships with partners in order to reduce costs for the firm overall.
While with a private industrial network, they have just a single firm that usually controls their network, although it may be owned by some members.