E-Commerce S2

Question 1

Please enumerate the Advantages of E-Commerce. (6 Statements)

Answer 1

• *Can increase sales and decrease costs** (if advertising done well on the web).
• But is not for every business. Small Businesses like a tomato stand can be not profitable.

Can get a firm’s promotional message out to potential customers in every country.

• *Using e-commerce sales support and order taking processes a business can**
• Reduce costs of handling sales inquiries
• provide price quotes

Increases purchasing opportunities for buyer

Negotiating price and delivery terms is easier

• *The following cost less to issue and arrive securely and quickly**
• Electronic payments of tax refunds
• public retirement
• welfare support

Question 2

Please enumerate the advantages of E-Commerce (7 Statements)

Answer 2

Perishable goods, high cost products, are much harder to sell online

Difficult to
- Calculate return-on investment
- integrate existing databases and transaction-processing software into software that enables e-commerce
Cultural and legal obstacles also exist
Difference part of the world has different culture acceptance

Lack of Trust

Language

Culture

• *Infrastructure issues
• **Internet infrastructure includes computers and software

Question 3

Economic forces influences ecommerce please define Economic and explain the two conditions of a market.

Answer 3

• *Economics**
• Study of how people allocate scarce (knappe) resources
• Study of the production, distribution and consumption of goods and services and their management
• *Two conditions of a market**
• Potential sellers of a good come into contact with potential buyers
• A medium exchange is available

Question 4

The role of e-commerce in competitive strategy include four statements, please explain.

Answer 4

**1. Reduced administration/transaction cost **

• Since things can be done electronically, so infrastructure or overhead cost (cost
• of building, staff, stationary etc) is reduced. Similarly, you can sell directly to
• your customers and it eliminates the cut/revenue payable to intermediaries or
• dealers.

**2. Improved logistics supply chain **

• Just in time delivery of the material is possible. It helps in reducing inventory
• and overall production cost and achieving cost leadership/differentiation.

3. Customization

• With the help of EC, customer data can be gathered and analyzing it customers
• can be served in a better manner according to their needs. One can, thus,
• implement differentiation and focus strategy.

4. **Differentiate a product in terms of quality of service **

• It is possible that delivery time and transaction cost is saved as customers can
• directly download the product from the web site, thus, it helps in achieving cost
• leadership and differentiation.

Question 5

Please define the term **Supply Chain. **Also define the three parts of Supply Chain activities: Upstream activities, Internal activities and downstream activities.

Answer 5

1. Supply chain includes all the activities associated with the flow and transformation of goods from the raw materials stage all the way to the end user.
2. Upstream activities relate to materials/services or the input from suppliers. I
3. Internal activities relate to manufacturing and packaging of goods.
4. Downstream activities relate to distribution and sale of goods to distributors/customers.

Question 6

What can be benefits of using Internet technologies in the supply chain? Enumerate 5 benefits.

Answer 6

**Using internet technology: **

1.  Suppliers can share any information about changes in the customer demand;
2.  suppliers can have immediate notice of any changes in product design;
3.  Drawings/specifications of a product can be quickly provided to the suppliers and vice versa;
4.  Processing speed of a transaction can be increased; cost of handling a transaction **can be reduced; **
5.  Chances of errors in entering transaction data are reduced;

Question 7

Please explain shortly the following terms:

1. E-marketing
2. Promotions
3. Discounts
4. Free-trials
5. E-Business Advertising
6. Banner Advertising
7. Web casting
8. Interactive advertising

Answer 7

1. E-marketing
   Include direct-marketing, SEO Advertising and Email Newsletter
2. Promotions
   Activities to attract visitors to your site and induce them to purchase
3. Discounts
   Discount advertisements through magazines, newspapers, web sites etc. can attract new and repeat customers.
4. Free-trials
   Customers sign up for a free service, which is limited to a time.
5. E-Business Advertising
   Advertisement to influence a buyer-seller transaction.
6. **Banner Advertising **
   Webpage banner ads are small billboards containing graphics and an advertising message.
7. **Web casting **
   Web casting is a term used to refer to internet-based broadcasting of audio and video content.
8. Interactive advertising
   It uses a combination of rich media (such as audio, video, animations) and traditional forms (such as print, TV or radio ads) in order to involve customers in advertising process to increase brand recognition.