Chapter (6): E-Bu usiness an E-Comm nd merce

:: Rev view Questions ::

1. D Define e-co ommerce and pure vs. partia ones. e al
Elect tronic commerce (EC or e-comm merce) des scribes the process of buying, f sellin transferring, serv ng, ving, or exc changing products, se ervices, or informatio on via c computer networks, in n ncluding th Internet he t. In pu EC all dimensions are digita where the product, its deliver paymen ure d s al ry, nt, and transfer ag gent are all done online like buy ying softwa online. Partial EC is are n he tion is phys sical like bu uying a book on Ama azon and when part of th transact havin the boo physicall delivered ng ok ly d.

2. L List the ma ajor types of EC (by transact s y tion).

B2 where both the buyer and s 2B, seller are business org ganizations s B2 where the sellers are organizations an the buye are con 2C, nd ers nsumers C2 where both partie are cons 2C, es sumers C2 where consumers make the need for a product known and suppliers 2B, s eir r t s co ompete to provide the product p e G2 where the Govern 2C, nment prov vides services to its c citizens B2 where an organization uses EC interna to impr 2E, a ally rove its operations c-commerce, where bu usiness par rtners collaborate elec ctronically e, in ss ment. m-commerce where EC is done i a wireles environm

3. D Distinguis betwee busines sh en ss-to-cons sumer, bu usiness-to o-business s,

and intra-bus siness EC. Business-to B o-consumer commerce involves transactions between a consum r n mer and a corporation; busine ess-to-busi iness comm merce involves transa actions among usinesses. Intra-busin ness EC ref fers to a business using EC two or more bu inter rnally to im mprove its o operations. A special case of thi is B2E (b . is business to o employees).

Chapter 6: E-Business and E-Com s mmerce

4. D Define soc cial comme erce and d distinguis it from e-comme sh erce.
Social comm S merce is co oncerned w with the cre eation of places where people ca e an collaborate online, solicit advice from trusted individuals and avail themselve s, es oods and services. EC deals bas C sically with buying an selling w nd without the of go socia interactio al on.

5. D Define a bu usiness m model and list five E busines models EC ss s.

A busine model is the method by which a comp ess pany gener rates reven nue to sustain itself. m e: Five EC Business models are ng Barterin online Deep discounters your-own-p price Name-y Online a auctions Product customiza ation

6. R Relate EC to bloggin and wikis. t ng

ECs are abo buying and selling online. W E out g Wikis and bl logs are pa of EC art wher in addit re, tion to buying and selling, they provide a social netw work for pe eople to sh hare ideas and thoughts about p products and services s.

7. D Describe th scope of EC and list its major parti he icipants.

EC E applicati ions are su upported by an infrast y tructure, w which includ hardwa des are, softw ware, and networks, ranging fro browsers to multimedia, and also by th n om d he follow wing five support are s eas, people public po e, olicy, marke eting and a advertizing g, supp port service and business partn es nerships.

8. D Describe electronic markets. e c .

An A electronic market i a virtual marketpla in which sellers an buyers is ace nd meet an conduct different t nd types of tra ansactions. The funct . tions of e-m market are the same as those of a physical marketplac howeve comput s ce; er, terized systems make e markets much mo efficient by provid s ore t ding more u updated inf formation t buyers a to and sellers.
Chapter 6: E-Business and E-Com s mmerce

9. D Define forw ward and reverse a auctions.

Forward auc ctions are used to allow selling companies to post ite s ems they w want to se and buying companies to com ell mpete for t the best pr rices acceptable by th he sellin companies for those items, w ng with the winning bidd ders obligat ted to buy the items. Reverse auctions a fixed-duration bid e are dding events hosted b a single by e er, h suppliers compete to fulfil the n needs of the buyer. buye in which multiple s

10. How are forward a auctions u used as a selling ch hannel?

Usually, item are placed at a sp U ms pecial site f auction, and buye will bid for ers continuo ously for th items. T he The highest bidder wins the item Sellers and buyer t ms. rs can be i individuals or busines sses. The p popular auc ction site e eBay.com is conductin s ng mostly f forward au uctions.

11. Describe the proce of usin reverse auctions for purc ess ng e s chasing.

In reverse auctions, th n a here is one buyer, us e sually an or rganization that want to n ts buy a product or a service. Supplier are invit o rs ted to subm bids. On mit nline biddin is ng much faster than convent tional bidding, and it usually att tracts man more ny ers. The re everse auct tion is the most comm mon auctio model fo large on or bidde purchases. Eve erything els being eq se qual, the lo owest-price bidder wins the e nd rporations frequently mandate this approa y ach, auction. Governments an large cor ch derable sav vings. whic may provide consid

12. Define electronic b bartering. .

An A electronic form of b barter is w where organ nizations and people exchange services and go oods via an electronic bulletin b n c board or we ebsite with hout the use of n trade. money. This is the logical extension of one of the oldest forms of t

13. Describe electronic storefro onts and m malls.

Electronic storefronts are the entry point in one of the hundre of E nto eds thousands of specialized (selling only one or a very few related items) or gen neral (selli ing many items) stor on the I res Internet. A electronic mall, als known a a An so as cybe ermall, is an electronic site that is a shared entry poi for a nu d int umber of comm mercial businesses or electronic storefronts. Some c r c cybermalls allow for shop pping carts to be wielded across the comm s mercial businesses wit a single th chec ckout point and often supply too for the c ols creation of the individ f dual store efronts.

Chapter 6: E-Business and E-Com s mmerce

14. What are some general feat e tures (crit tical succe ess factor that m rs) make
the delivery of online s o services (e e.g., cybe er-banking securiti g, ies trading g, job hunting, travel serv t vices) suc ccessful fo both se or ellers and buyers?

Selling book toys, co S ks, omputers, and most o other products on the Internet may e reduce vendors selling co s osts by 20 to 40 perc cent. Delive of services, such as ery ng ne r tocks or ins surance on nline, can b done 100 be buyin an airlin ticket or buying st percent electro onically, wit consider th rable cost reduction p potential. T Therefore, ne s ng pidly, with m millions of new onlin delivery of services is growin very rap custo omers bein added annually. ng

15. Describe how cust tomer serv vice is pro ovided online and list its fou ur
phas ses. Customer se C ervice can be provide online in several w ed n ways. A few examples w s inclu ude FAQs and online s submission of technic question n cal ns/concern ns. Cust tomer service should be approached as a b business lif cycle pro fe ocess, with h the f following fo phases: our Phas 1: Requ se uirements Assist th custome to determ s. he er mine needs by provid s ding phot tographs of a product video pre f t, esentations textual d s, descriptions, articles o or revie ews, sound bites on a CD, and d d downloadable demonstration files. Also us se intelligent agen to make requirem nts e ments sugge estions. se uisition. H Help the customer to acquire a p product or service Phas 2: Acqu (online order entry, nego otiations, closing of sa ale, and de elivery). se nership. Support the customer on an ong e going basis (interactiv ve Phas 3: Own onlin user gro ne oups, online technical support, F e FAQs [frequ uently aske questions] ed and answers, resource lib r braries, new wsletters, a and online renewal of scriptions). subs Phas 4: Reti se irement. H Help the client to disp pose of a se ervice or product (online resale, classifie ads). ed

16. List the major issu relatin to e-tailing. m ues ng

Despite e-ta D ailings ong going growth, many e e-tailers co ontinue to f face some majo issues. or - R Resolving channel con nflict. - R Resolving co onflicts wit thin click-and-mortar organizati ions. - O Organizing order fulfilment and logistics. - D Determining viability a g and risk of online e-ta ailers. - Id dentifying appropriate revenue models.

Chapter 6: E-Business and E-Com s mmerce

17. Briefly di ifferentiat betwee the sell te en l-side mar rketplace and the b buy
side marketplace. e In th sell-side marketpla model, organizati he e ace ions attempt to sell their products or se ervices to other organ o nizations electronically from the own priv eir vate emark ketplace an nd/or from a third-pa arty site. The buy-side marketplace is a mode in which organizati m e el ions attempt to buy need ded produc or servic from other organ cts ces nizations electronically y.

18. Explain how forwa and re h ard everse auc ctions are used in B e B2B

com mmerce. Forward auc ctions are used to allow selling companies to post ite s ems they w want ell mpete for t the best pr rices acceptable by th he to se and buying companies to com sellin companies for those items, w ng with the winning bidd ders obligat ted to buy the items. Reverse auctions a fixed-duration bid e are dding events hosted b a single by e buye in which multiple s er, h suppliers compete to fulfill the n needs of th buyer. he Thes types of auctions c se can be used in a number of way as businesses buy and d ys sell f from each other.

19. List and compare t c the variou method of e-pro us ds ocuremen nt.
Reve erse auctions, group purchasing and desk g, ktop purcha asing are t three forms s. Reve erse auctions, the buy places a RFQ on i website or a bidding yer its e mark ketplace, after which sellers will electronic a cally submi bids, with the winner it notif fied of the accepted o offer via e-mail. Grou purchases are used to allow the aggreg up gation of a number of small buy f yers orders to total a larger vo olume, thus ensuring lower purc chase costs. Desk ktop purcha asing is a s system by which supp pliers cata alogs are se erved up together within one mast catalog, with purc n ter , chases bein ordered via the end ng s. tem allows a purchasing agent t coordina to ate users desktop computers The syst the e entire organizations order easily and to ensure max ximum price savings, e whic would no be accom ch ot mplished if each depa f artment ord dered sepa arately.

Chapter 6: E-Business and E-Com s mmerce

20. What is the role of exchang in B2B t f ges B?

Public and private exc p changes oft ten exist al longside ea ach other a as comp plementary factors, s y such as wit e-enable trade relationships between th ed s manufacturers and retaile ers. They a e-mark are ketplaces usually man naged by th hird ies t many buyers and selle ers. They include sys stematic parti where there are m sourcing, which fosters lo h ong-term re elationship between the suppli ps iers of dire ect the m materials and the use a ers; spot so ourcing or items supp plied as-needed; syste emic sourc cing type ex xchanges f indirect materials; and funct for t ; tional exch hanges of temporary services traded as n needed. Th collabor he ration and fulfilment capabilities of e each will se erve to enh hance the b business re elationships s betw ween buyer and selle rs ers.

21. Describe intra-bus siness EC and list it major ty ts ypes.

In ntra-busine describ electron busines transact ess bes nic ss tions over a an organizations intranet lik the orde ke ering of sup pplies and the dissem mination of infor rmation. It also refer to busine betwee different divisions of an t rs ess en t organization, in ncluding th transfer or sale of materials a he and produc cts, wledge, or services. T This term a also extend to includ the elec ds de ctronic know exch hange of inf formation, transactio ons, and co ollaboration between an ns n organization an its deale nd ers, license ees, or fran nchisees. I Intra-busin ness focuse es on business pro ocesses an procedures that ad value to the enterp nd dd o prise and it ts omers. custo

n 22. What EC is done in B2E? Employees can manag their benefit packa E ge ages and ta ake training classes elect tronically. In addition employee can use the corporate intranet to purch I n, es hase disco ounted corporate products and services, in nsurance, t travel pack kages, and ticke to events. They ca also elec ets an ctronically order supp plies and m material need ded for their work. e mmerce. 23. Describe the activities done in e-com The major activities do T a one in e-co ommerce a EC intra are abusiness ( (commerce e done within org e ganizations collabor s), rative comm merce (wit thin and am mong organizations), e-governm , ment, and consumer-to-consum EC. mer

Chapter 6: E-Business and E-Com s mmerce

24. Define e-governme ent and it various transacti ts ion types. .

E-go overnment is the use of Internet technolog and ecommerce to deliver t gy o infor rmation and public se ervices to c citizens, business part tners and s suppliers o of gove ernment en ntities, and people wh work in the public sector. ho Ther are three categorie G2C, G2B and G2G re e esIn G2C (Govern nment to C Consumer), governme agencies use the Internet to ent o prov vide service to citizen such as Social Sec es ns curity and p pension pa ayments, direc ctly to recip pients ban accounts or to sma cards. nk s art In G2B (Govern nment to B Business), governmen use the Internet t sell to or nts e to buy from busin nesses to ensure the best price for government procurement of good and serv ds vices. G2G includes in ntragovern nment EC (transaction between different governments) ns n well as services among different governme g ental agenc cies. as w

25. What are typical G e G2B activit ties?

Electronic te E endering sy ystems usi ing reverse auctions are becoming e mandatory, to ensure the best price for gover e e rnment pro ocurement of goods a and i ment EC (transactions between different services. G2G includes intragovernm gove ernments) as well as services am mong different gover rnmental ag gencies.

26. D Define C2C EC and list some types of C2C activities

Consumer-t C to-consume (C2C) e-commerce refers to e-commer in which er e rce both the buyer and the se r eller are individuals. C2C is con nducted in s several wa ays he t, he own C2C activities are auctions. Other on th Internet where th best-kno cons sumer to co onsumer tr ransactions also include e-barte s ering, online classified d ads, and personal service exchanges. Revers auctions like ewan es se s, nted.com, a are also represente ed.

Chapter 6: E-Business and E-Com s mmerce

27. What are the vario e ous electronic paym ment mech hanisms? Which of f
thes are mos often u se st used for B2B payme ents? E Electronic fu unds transf fer- Popula for payin bills onli ar ng ine where money is trans sferred electronically from paye ers account to the recipients. E Electronic checks- Dig gitally signe e-check is encrypt ed ted and mo oved from t the buyin customer to the m ng merchant. E Electronic credit cards Paying w swith regular credit car (encryp r rds pted numbe ers) Purchasing e-cards- C Corporate c credit cards with limits, work lik regular s, ke credit cards, bu must be paid quick ut e ker e-Cash-stor red-value- Prepaid ca can be used for tr ard ransportation, making g copie in the lib es brary, park king, teleph hone calls, etc. e-Cash- smart cards- Cards that contain co t onsiderable informati e ion can be manipulated as needed and used fo several p s or purposes, including tr ransfer of money. e-Cash- (pe erson-to-pe erson) - Sp pecial online account from which funds can be h n sent to others. E Electronic bill presentm b ment- Bills are presented for pa s ayers appr roval. Pay at ATMs ATM allo sows you to pay month bills (e. hly .g., to utilit companies) ty by tr ransferring money fro your ac om ccount to th biller. he M Micropayme ents- Paym ments are to small to be paid w oo o with credit c cards. Can be paid with store ed-value money cards or with s s, special payment meth hods, includ ding ments from cell phone m es. paym B B2B special methods- Enterprise invoice pr e resentment and paym ment, wire trans sfer, and electronic le etter of cre edit are pop pular meth hods.

28. List the security re s equiremen for EC nts C.

Auth hentication- The buye the selle and the paying ins er, er, e stitutions m must be assured of the identity of the partie with who they are dealing. f es om Integ grity- It is necessary to ensure that data a and inform mation trans smitted in EC, such as orders, replies to queries, a h , o and payment authoriz zations, are not e accid dentally or maliciously altered o destroye during tr or ed ransmission. Nonr repudiation Merchan need pr nnts rotection ag gainst the customers unjustifie s ed denia of placin an order On the o al ng r. other hand, customers need pro , otection again mercha nst ants unjus stified denia of payments made (Such de al e. enials, of bo oth types, are calle repudiat ed tion.) Priva acy- Many customers want their identity to be secured. They w r want to make sure others do not know what they buy. Some prefer complete ano e onymity, as is sible with cash payme ents. poss Safety- Custom mers want t be sure that it is s to safe to prov vide a cred card dit number on the Internet. T They also w want prote ection again fraud b sellers o by nst by or criminals posing as seller rs.
Chapter 6: E-Business and E-Com s mmerce

Order fulfilm O ment, the a of putting a physical product in a box a act t and prepar ring it for shipping, is just a small part o an effect r of tive fulfilme cycle. A e-tailer ent An typic cally fills sm mall, customized, and even sing item ord d gle ders, and d delivers the em anyw where in th world. M he Most are un nprepared to deal wit real-time or near-t th time inven ntory statu shipping and logis us, g stics, customer servic and retu ce, urns.

29. Describe the issue in EC or es rder fulfill lment

30. List the nine steps of the or n s rder fulfillment process A Assurance of custome payment o er t C Check of in-stock avai ilability. S Shipment arrangemen If the product is a ntavailable, it can be sh t hipped to th he

custo omer In nsurance- Sometimes the conte s ents of a sh hipment ne eed to be in nsured R Replenishment- Custo omized orde will alw ers ways trigge a need fo some er or manufacturing or assemb operatio bly on In n-house pr roduction- In-house p production needs to b planned be C Contractor use- A man u nufacturer may opt to buy prod o ducts from contractor rs C Contacts with custome ers- Sales representa atives need to keep in contact w d n with custo omers R Returns- In some case custom es, mers want to exchange or return items n

31. What is the meaning of Inte t ernet mar rket resea arch?

The goal of market res T search is to find infor o rmation and knowledge that desc cribe the re elationships among co s onsumers, products, marketing methods, and mark keters. Inte ernet mark researc is simply conductin these fu ket ch y ng unctions ov ver the I Internet.

32. Identify the driver of Inter t rs rnet adver rtisement t. T most co The ommon for of Inter rm rnet advert tising is ban nner ads, w which are

elect tronic billbo oards, ofte containin video clips or soun bites, in addition t en ng nd n to text and graphics. Pop-ups and pop-unde are ads that launc automatically whe you ente or d ers s ch en er exit a site, app pearing eith in front of or behi her t ind the active window w. E E-mail adve ertising is t the use of l lists of e-m mail addresses, placed in a d database, to se end advertisements. M Many companies are n now produc cing electro onic catalogs, some o which ar of re highly customiz zed to the recipients tastes. C Classified ad posting in chat r ds, gs rooms or newsgroups and listin s, ngs sent to or poste to comm ed munity site or collec es cted (regist tered) e-mail address are use as ses ed well.

Chapter 6: E-Business and E-Com s mmerce

33. What are some of the online advertis e e sement strategies? Affiliate market ting is the revenue m model by which an org ganization refers cons sumers to the selling companys Web site. t s Sear rch Engine Advertisem ment. Most search en t ngines allow companie to subm w es mit their Internet addresses f free so that peopl can sear r a for le rch them electronicall ly. With the ads-as-a-commo odity appro oach, peop are paid for time s ple d spent viewing an ad. Viral marketing or advert g tising refers to word-o of-mouth m marketing in which custo omers prom mote a pro oduct or service by te elling others about it
e EC. 34. List some ethical issues in E Privac and info cy ormation pr rotection is one of the biggest p s problems. W What happ pens to inf formation collected if the e-business goes under? Is it sold as a c assets? Wh if hat it is a acquired or merges w r with another organizat tion? Wher are the e re ethics in selling your mai iling list? use ools like co ookies and page track kers has to be The u of web tracking to consid dered. A co ookie is a f placed on a user's hard driv usually without his or file s ve, s her knowledge or permission, to trac his or he use of th Internet o ck er he t. ethical to ig gnore the p possible los of jobs t ss through the introduct e tion of eIs it e comm merce and disinterme ediation?

Besides Inte B ernet fraud and Inter d rnet identit theft, oth major legal issue ty her es inclu ude failure of sellers t collect sa to ales taxes, cybersqua , atting and the accompanying domain na ame proble ems, and co opyright an patent infringements. nd

35. List the major lega issues o EC. m al of

36. Describe buyer pro otection in EC. n

Protection of the buye o ers identity and perso y onal inform mation is of absolute f impo ortance, no only duri ot ing transm mission of th information over t he the Interne et, but a after the re eceipt. The key to pr e revention is for businesses to es s stablish responsible info ormation-h handling. A Although th use of S he SSL and other protoco ols protect info ormation w while it is in transmiss n sion, the bu usinesses s still need to o will p estab blish regula ations for t the storage or destru e uction of the informat tion after receipt.

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Chapter 6: E-Business and E-Com s mmerce

37. Describe seller pro otection in EC. n

The seller must be pro T m otected aga ainst consu umers who refuse to pay or who o o pay w with bad checks and from buye ers claims that the m merchandise did not e arriv They als have the right to p ve. so protect aga ainst the us of their name by se others as well as to prote the use of their un a ect nique word and phra ds ases, slogans, and web address (tradem mark protec ction). Security features such as s authentication, nonrepudiation, and escrow se , d ervices pro ovide some needed prote ections. An nother selle protectio applies particularly to electro er on y onic media: Selle have legal recours against customers who down ers se s nload witho permiss out sion copy yrighted software and d/or knowle edge and u it or sell it to othe use ers.

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Chapter 6: E-Business and E-Com s mmerce