B2B online platforms for Value Networking:

Implications for Automotive and Semiconductor

Industries
 Abstract
• Shift from supply to value chain
• Challenges of networking and collaboration
• Opportunities of online business platforms
• The case of Covisint in B2B
• The case of semiconductor industry in Taiwan
• The paper also try to learn successful lessons
from these cases
 value co-creation& networking
• Organizations strive to maximize value through collaboration
with partners in a value network by integrating their resources
and value co-creation
• a network of actors do a pattern of activities to co-create a
value through resource constellations or a platform to
facilitate resource integration, relationships management and
value co-creation activities.
• The extent of this value is determined by the capabilities of
the member firms trying to integrate their resources as well as
the nature of win-win relationships to facilitate value co-
creation in the network.
• It is important to assess and find the suitable and qualified
partner due to high transaction cost and high risk, therefore E-
business can minimize such costs.
• Entrepreneurs should first accurately identify the type and
nature of resources each potential actor can bring to the co-
creation process, and base the value proposition on this
identification. At the same time, entrepreneurs must be
aware of the potential divergences in interests and
expectations of those involved that could negatively impact
the main value proposition and value capture of the
business model.
• The ability to monitor the value co-creation process
constantly and learn from experiments and tests becomes
vital.
• Figure 1 represents and evaluates the perceived value
dynamics for all actors involved in a co-creation process.
The focal firm is the key provider of multisided platform and
owner in the business model, based on which the different
• It also defines the strategies for engaging stakeholders in the
co-creation process. Finally, the co-creation process must be
monitored by the local firm in order to substantiate
incremental improvements on value propositions and value
capture structures or even total redesigns of the business
Covisint
 Marketing a single value proposition
• Paul and his executive team customized a set of techniques for marketing high-tech
products and created a nine point scorecard (exhibit4) to identify markets to serve
as well as products and services to offer in order to maintain Covisint sustainable
proprietary advantage. The process also enabled them to define businesses to exit
or to avoid in the future.
 Deliver a complete solution
• Paul believed that Covisint needed to expand its portal offerings and creating a
vision perception in customer minds by adding a messaging hub , and get red of
distracter or noncore products that exhausted energy and resources.
• The data communication messaging hub addressed the critical problem of
automotive supply chain around data flow and communication. GM alone sent
nearly 50 million electronic data interchange documents to its suppliers annually
costing around $8 us dollars per transaction, and it is getting harder and harder to
cope especially for Tier 1 companies.
• Covisint developed its messaging hub by forming a consortium of stakeholders
including the big 3 OEMs and Johnson Controls, Lear, and Delphi, in which they all
invest in such cooperation business framework to solve the problem and change
business model of how companies can work together in the future.
 Creating a common vision
One of most successful remaining products by Covisint was a single platform for •
companies to communicate and collaborate with their customers and suppliers.
This platform composed of 3 products supporting machine-to-machine connections
for data messeging and people-to-people communication and collaboration via the
portal. It also provide an infrasturcture for common access to different applications
(see Exhibit 8)
 TSMC
TSMC’ VF is composed of 3 major parts to sustain production
:flexibility, efficiency and relationships with customers
shop floor system -1
.business& admin operations -2
.realtime information service transmission with customers -3
In July 1999 TSMC replace their customer service website with
:TSMC online with the following capabilities
.review technical documents& processes*
.submit customers’ requirements, requests and orders*
.production monitoring (i.e. WIP status)*
review other technical progress data (i.e. quality, R&D, *
.product yield and forecasting)
• TSMC constructed its VF through:
• Reengineering its business model and strategy to be
customer oriented organization.
• Migrating to VF using appropriate IT and infrastructure.

• the method of e-commerce employed by TSMC, or more

specifically TSMC-Online, acts as a portal providing
comprehensive support for its customers’ major operational
tasks, ranging from prototyping and design, to engineering
and logistics.
• In terms of design, aided by its B2B Internet applications,
TSMC has drawn on a portfolio of design solutions from
third parties to help itss customers to achieve better
designs, more reliable design reuse and faster time-to-
market, leading to virtual integration of a network of firms.
 Online B2B collaboration across semiconductor companies

• Firm S is a Chinese company established in 1998 with the ambition of

developing circuit analysis services and software and helping IC Design
Company promote competitive ability and protect IC intellectual property.
• The firm has extensive levels of involvement across a variety of foreign
markets. Market coverage is extensive due to their internationalization
efforts and strategies for expansion. Since its first joint venture in France
in October 2004, the firm subsequently acquired a Russian firm as the
first overseas R&D centre and established another in Taiwan. The firm has
expanded its global activities in North America, South Korea and Japan
through wholly-owed enterprises and joint ventures.
• By collaborating with a Taiwan-based semiconductor material analysis
firm, the strategic alliance provides an online platform for sales and
business consultation in the failure analysis, circuit analysis and EDA tools.
By 2007, Firm S had grown to 140 employees globally, with sales of
US$1.5 M with over 125 per cent of sales growth rate due to international
expansion.
• Implications for Semiconductor industry
• Covisint was an IT company offering digital services to the big
American automotive industry players and later on, Covisint
was acquired by Compuware, a bigger American IT company
to strengthen their differentiation and competitive advantage
over the Japanese and Asian automotive competitors. The
same approach is applicable to semiconductor industry .