Unit 7

E-commerce

A. Discuss these questions.

1. Do you use the internet? If so, what do you use it for?
2. What goods or services have you bought over the net? What would you prefer not to
buy over the Net?
3. What kind of products or services are best sold on the Net?
4. ‘The e-commerce revolution will be as significant as the industrial revolution or
perhaps even more so... . Do you agree?

B.

C. Complete the beginning of sentences below with the appropriate endings.

1 An intranet operates a Outside a company or organisation and is open to

the the public.
2 The Internet operates b Inside a company or organisation.
3 An extranet operates c Outside a company or organisation, but is not open
to the public.

D. Match sentences 1 – 12 to the six headings below.

Promise invitation / request speculating about the future
Bargaining reflecting on the past advice / warning / threat

1. They would’ve gone bust if they’d taken his advice.

2. If I were you, I’d redesign your website.
3. We’ll deliver within 24 hours if you order online.
4. We’ll be able to expand if they come up with the finance.
5. If you reduced your price by 8%, we’d increase our order substantially.
6. Your money back if not 100% satisfied.
7. If we go online our overheads will fall.
8. If you would like to apply, call Human Resources on 02077533420.
9. If you order by the end of the month we can give you a discount.
10. I wouldn’t do that If I were you.
11. If we’d had a better website, we’d have attacted more customers.
12. I would be grateful if you would advise your staff as soon as possible.
CASE STUDY 7 KGV Europe
Background
KGV is a traditional high-street music retailer. Based in Amsterdam, it has 12 stores in
the Netherlands, three of which are megastores. Some years ago, it expanded into the rest of
Europe and now owns 65 stores – eight of these are megastores.
The company is at present going through a difficult period. Over, the last three years,
profits have steadily fallen, from €450m to €290m. The megastores’ sales have risen by 8%,
accounting for 55% of the company’s turnover, but the increased revenue has been achieved
only by heavy expenditure on advertising and promotion. Fierce competition, a narrow
product range and a lack of innovation are some of the reasons for KGV’s poor perfomance.
The management are concerned, especially, that they are not exploiting the opportunities
offered by selling through the Internet.

Market study
A study by KGV’s Marketing Departement was recently carried out and it produced the
following findings:
1 It is estimated that, in five years’ time, 50% of all music products will be bought through
the Internet.
2 65% of consumers under the age of 30 prefer to do their shopping on the Internet.
3 KGV’s customers would like stores to provide a wider product range (see chart I).
4 Average spending per month in KGV’s medium-sized stores is highest among the 41-60
age group (see chart 2).
5 Spending on music products by the over 60 age group will increase significantly in the
next ten years in Europe.
6 The various age groups have clear preferences as to the type of music they enjoy and
purchase (see chart 3).
Listen to a conversation between Michael Johnson, a director of KGV, and Hanna
Driessen, the recently appointed Financial Director of the company. They are discussing
the company’s strategy before a forthcoming management meeting about KGV’s
future. Make short notes on the opinions they express.
Chart 1: Preferences for additional products / services
(% of respondents for each category)

Age 18-40 Age 41 +

spoken word (talking books) 4 44
computer games 62 15
holiday information 35 48
computer software 58 32
banking services 25 12
concert tickets 70 75
 Chart 2: Average spending per month in a medium-sized store
70
60
50
Axis Title

40
30
20
10
0
18 - 25 26 - 40 41 - 60 60+
Age

Task

You are member of KGV’s management. Hold a

meeting with other managers and discuss
these agenda items. Decide what action KGV
should take concerning their future startegy.

1 Should KGV keep some of their stores but

sell at least 50% of their goods through
the internet?
2 Should they close all their stores and offer
a total on-line services? If so:
a) what risks would be involved?
b) how would the costs of the business
change?
c) what organisational changes would
the company have to make?
3 Should KGV stay as it is, but follow
Hanna’s advice:
a) outsource advertising and promotion
b) hire a consultant to look at the
product mix
c) consider targeting new segments of
the market.
Writing
4 What are the consequance of the
You are the Managing Director of KGV. Write a memo to a director of the company who was
unable to attend the management meeting. In the memo, summarise the discussion and
decisions of the meeting and ask the director for his/her coments.
Case Study
KGV Europe
A traditional retailer studies the possibility of getting into e-commerce.

Stage 1: Background
Company type
Stores

Profits
Megastore sales

Problems / Weaknesses

Lembar Evaluasi Tugas Praktik Unit 7

Apakah semua pertanyaan Tugas Teori Unit 7 dijawab dengan benar dengan waktu yang
telah ditentukan? Semua kesalahan harus diperbaiki terlebih dahulu sebelum paraf.
1. WRITTING

No Benar Salah Paraf Paraf

Dosen/Asdos Mahasiswa/i
A
B
C
D

2. Reading (Case Study)

No Benar Salah Paraf Paraf

Dosen/Asdos Mahasiswa/i
E

3. Listening

No Benar Salah Paraf Paraf

Dosen/Asdos Mahasiswa/i
F

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