Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

Ebusiness and Ecommerce Management 4th edition

Self assessment questions for students at the end of each chapter.

Note, that answers to in-chapter activities and other questions are only available
to lecturers who register via the Pearson site at www.pearsoned.co.uk/chaffey.

Chapter 1
Self-assessment questions
1. Distinguish between e-commerce and e-business.
This can best be explained by referring to different elements shown in Figure 1.1
i.e.

 sell-side e-commerce

 buy-side e-commerce

 internal use of electronic communications to support business processes.

E-business is generally understood to include all three elements. E-commerce is

commonly used to refer to either the first one or first two of these elements, but
less commonly the third. E-business is broader in scope than e-commerce.

2. Explain what is meant by buy-side and sell-side e-commerce.

Again refer to Figure 1.1. Buy-side e-commerce is using communications
technology to support the upstream supply chain from procurement to inbound
logistics. Sell-side refers to selling and distributing products and services from an
organization to its customers.

3. Describe the different services that can be offered to customers via a web
presence.
This is covered in more detail in Chapter 5 where stage models are referred to
(p214):

 outline information services on company and products

 detailed information services on products, e.g. technical infosheets

 transactional e-commerce – purchases can be made online

 transactional customer service – questions can be asked and answers supplied online

4. Summarize the consumer and business adoption levels in your country. What
seem to be the main barriers to adoption
Clickz (www.clickz.com/stats) is a good source of country information. For
business, the main barriers are highlighted by the DTI (2000) survey:
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 lack of imperative;

 security risks.

For consumers, the Which report highlights fears about security and privacy as
well as the lack of a perceived need.

5. Outline the reasons why a business may wish to adopt e-commerce.

The 6Cs are a good framework here:

 Cost reduction – less use of physical resources and staff.

 New Capability – e.g. to sell into an overseas market.

 Improved communication – internal and external.

 Control – better visibility/information for managers of trading relationships.

 Customer service – more detailed information, faster response can be provided 24 hours,
and 7 days a week.

 Competitive advantage – any of the above factors may provide this, but it is likely to be
short lived.

6. What are the main differences between business-to-business and business-to-

consumer e-commerce?

Refer also to the section in Chapter 2 (p43). In terms of volume of transactions

B2B dwarfs B2C. B2C transactions will typically be smaller and less frequent for
a trading relationship, but this is a generalization.

7. Summarize the impact of the introduction of e-business on different aspects of an

organization.

The McKinsey 7S model is a useful framework for looking at the different aspects of a
business that may be affected by the move to e-business.

 Strategy – new strategic responses are required

 Structure – new structures and responsibilities may be required

 Systems – new information systems and new processes will be required

 Style – less likely to change, but some organizational styles are more responsive to
change

 Staff – new responsibilities

 Skills – new skills

 Superordinate goals – higher level aims may be updated depending on the business.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

8. What is the relevance of intermediary sites such as Kelkoo (www.kelkoo.com) to

the B2C company?

Companies must think about whether they are represented on such

intermediaries. If they are not, they may lose potential business. They also need
to consider the positioning of their products relative to competitors who also use
the intermediary.

Note that Mondus wound down operations in 2002. Another example is Clearly
Business, a joint venture between Barclays and Freeserve.

Chapter 2
1. Outline the main options for trading between businesses and consumers.
These are:

 B2C – retail to consumers

 B2B – interorganizational

 C2C – consumer interactions e.g. auctions

 C2B – customer make offers to businesses, e.g. Priceline

2. Explain the concept of disintermediation and reintermediation with reference to a

particular industry; what are the implications for a company operating in this industry?

Example air travel. A carrier has the option of:

 distintermediation – selling direct from its web site

 reintermediation – selling via new online intermediaries with new pricing models such as
Priceline, Lastminute or Expedia

3. Describe the three main alternative locations for trading within the electronic marketplace.

 From company’s own web site

 From an intermediary web site or marketplace

 By making bids after reviewing customers’ web sites

4. What are the main types of commercial transactions that can occur through the Internet or
in traditional commerce?

See Table 2.5:

Commercial (trading) mechanism

1. Negotiated deal

2. Brokered deal

3. Auction
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

4. Fixed-price sale

5. Pure markets

6. Barter

5. E-business involves re-evaluating value-chain activities. What types of changes can be

introduced to the value chain through e-business?

 Improve speed of information flow between primary activities of value chain

 Increase depth of information shared between activities

 Reduce costs of information processing

6. List the different business models identified by Timmers (1999).

Timmers (1999) identifies no less than 11 different types of business model that can be
facilitated by the web as follows:

1. E-shop – marketing of a company or shop via web.

2. E-procurement – electronic tendering and procurement of goods and services.

3. E-malls – a collection of e-shops such as Barclays Square (www.barclays-

square.com).

4. E-auctions – these can be both for B2C and B2B as is the case with eBay.

5. Virtual communities – these can be B2C communities such as Xoom

(www.xoom.com) or B2B communities such as Vertical Net (www.vertical.net); these
are important for their potential in e-marketing and are described in the Focus on
Online Communities section in Chapter 9.

6. Collaboration platforms – these enable collaboration between businesses or

individuals e.g. E-groups (www.egroups.com), now part of Yahoo! (www.yahoo.com)
services.

7. Third-party marketplaces – Marketplaces are described in the Focus On section of

Chapter 7.

8. Value-chain integrators – offer a range of services across the value chain.

9. Value-chain service providers – specialize in providing functions for a specific part of

the value chain such as the logistics company UPS (www.ups.com).

10. Information brokerage – providing information for consumers and businesses, often to
assist in making the buying decision or for business operations or leisure.

11. Trust and other services – examples of trust services include Which Web Trader
(www.which.net/webtrader) or TRUSTE (www.truste.org) that authenticate the quality
of service provided by companies trading on the web.

Timmers, P. (1999) Electronic commerce strategies and models for business-to-business

trading John Wiley series in information systems. Chichester, England.

These can grouped as shown in Figure 2.11.

7. Describe some alternative revenue models for a web site from a magazine publisher.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

See Figure 2.11.

Subscription: per-month payment

Pay per view: pay for each article, or articles up to a value

Advertising revenue – for advertising space on site

Affiliate revenue – for referral to other sites leading to sale

8. Draw a diagram summarizing the different types of online marketplace

Refer to Figure 2.9.

Chapter 3

1. What is the difference between the Internet and the World Wide Web?

Use TV analogy: Internet is the network for transmitting data globally, web is the method of
delivering the content (channels).

The Internet

The Internet refers to the physical network that links computers across the globe. It consists
of the infrastructure of network servers and communication links between them that are used
to hold and transport information between the client PCs and web servers.

2. Describe the two main functions of an Internet Service Provider (ISP). How do they differ
from Applications Service Providers?
Internet Service Provider (ISP)
A provider enabling home or business users a connection to access the Internet (1). They can
also host web-based applications.

ASPs can host specific business applications.

Application server

An application server provides a business application on a server remote from the user.

3. Distinguish between intranets, extranets and the Internet.

Internet is public, intranet restricted to organizations employees, extranet has restricted

access beyond company.

Intranet

A private network within a single company using Internet standards to enable employees to
share information using e-mail and web publishing.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

Extranet

Formed by extending the intranet beyond a company to customers, suppliers and

collaborators.

4. Describe the standards involved when a web page is served from a web server to a
user’s web browser.

Request page and deliver page (HTTP), transfer request and information (TCP/IP), render
page in browser (HTML).

TCP/IP

The Transmission Control Protocol is a transport layer protocol that moves data between
applications. The Internet protocol is a network layer protocol that moves data between host
computers.

HTTP (Hypertext transfer protocol)

HTTP or Hypertext transfer protocol is a standard which defines the way information is
transmitted across the Internet between web browsers and web servers.

HTML (Hypertext Markup Language)

HTML is a standard format used to define the text and layout of web pages. HTML files
usually have the extension .HTML or .HTM.

5. What are the management issues involved with enabling staff access to a web site.

 Cost of access.

 Time spent in access lost from main activities.

 Access to illegal material.

6. Explain the following terms:

 HTML

 HTTP

 XML

 FTP

HTML (Hypertext Markup Language)

HTML is a standard format used to define the text and layout of web pages. HTML files
usually have the extension .HTML or .HTM.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

HTTP (Hypertext transfer protocol)

HTTP or Hypertext transfer protocol is a standard which defines the way information is
transmitted across the Internet between web browsers and web servers.

XML or eXtensible Markup Language

A standard for transferring structured data, unlike HTML which is purely presentational.

File Transfer Protocol (FTP)

Standard used for uploading and downloading files to and from web servers

7. What is the difference between static web content written in HTML and dynamic content
developed using a scripting language such as JavaScript?

Static content appears the same to all users. Dynamic content can be updated to reflect the
environment, e.g. time or personal preferences.

8. What software and hardware are required to access the Internet from home?

Software: web browser, operating system, TCP/IP stack.

Hardware: PC plus modem

Chapter 4
1. Why is environmental scanning necessary?

It is necessary at a macro-level to understand new constraints on conducting business such

as legal and technical constraints. These may also present opportunities. On a micro-level it
is important to be responsive to customers’ needs and competitors’ actions.

2. Give an example how each of the macro-environment factors may directly drive the
content and services provided by a web site.

 social – localized content for different cultures

 legal – privacy statement

 economic – funding and awards may be possible from governmental sources

 political – same as above

 technological – the incorporation of personalization

3. Summarize the social factors that govern consumer access to the Internet. How can
companies overcome these influences once people venture online?

 Cost of access technology

 Cost of online access per minute

 Peer pressure
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 Security fears

 Perception of need for online access

Companies should clearly communicate the benefits of online trading and make reassurances
about the threats.

4. What actions can e-commerce managers take to safeguard consumer privacy and
security?

Privacy statements should explain the actions taken to the customers. Firewalls should be
maintained to minimize the risk of unauthorized access to customer data. The relevant data
protection act should be followed.

5. What are the general legal constraints that a company acts under in any country?
See Table 4.2. Includes

 Consumer data protection and privacy laws

 Copy promoting goods

 Sales of goods/returns

 Trademark law

 Intellectual property law

 Disability and discrimination

6. How do governments attempt to control the use of the Internet?

They control through policies to promote its use and through monitoring messages through
ISPs.

7. Summarize adoption patterns across the continents.

Refer to a source such as the International Telecommunications Union (www.itu.int) for the
latest statistics.

8. How should innovation be managed?

It should be managed by frequent review of new opportunities, achieving
balance between adopting all new technologies and conservative non-adoption
and careful selection of technologies that will achieve competitive advantage.

Chapter 5
1. What are the key characteristics of an e-business strategy model?

All strategy models should:

 Be based on assessment of internal and external environment

 Have clearly defined SMART objectives backed up by vision

 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 Have strategies, tactics and implementation that select the best techniques to achieve
these strategies

 Have monitoring and control that assess whether the objectives are being achieved and a
feedback loop to ensure corrective action occurs.

For e-business in particular, the strategy objectives should define the balance of online and
offline trading with customers, suppliers and distributors. The tactics should look at how
investment in information systems and revising business processes should occur to hit these
targets.

2. Select a retailer or manufacturer of your choice and describe what the main elements of
its situation analysis should comprise.

Situation analysis is summarized in Figure 5.6, p213. It includes evaluation of the external
environment as described in Chapter 4 (SLEPT or PEST) and internal resources using
techniques such as SWOT, application portfolio analysis and also demand and competitor
analysis.

3. For the same retailer or manufacturer suggest different methods and metrics for defining
e-business objectives.

Objectives should be SMART (Chapter 12). Examples of metrics are in Table 5.4, p227, e.g.

 Revenue amount

 Revenue source (which geographical markets, segments and products)

 Acquisition and retention of particular segments

 New product development

 Cost and lead-times that are part of the supply chain

4. For the same retailer or manufacturer assess different strategic options to adopt for e-
business.

This refers to the types of decisions outlined in the strategy section of this chapter. i.e.

 Decision 1 E-business channel priorities

 Decision 2 Organizational restructuring and capabilities

 Decision 3 Business, service and revenue models

 Decision 4 Marketplace restructuring

 Decision 5 Market and product development strategies

 Decision 6 Positioning and differentiation strategies

Chapter 6
1. Define supply chain management, how does it relate to:
 logistics;
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 the value chain concept;

 value networks?

Supply chain management (SCM)

The coordination of all supply activities of an organization from its suppliers and partners to its
customers.

Logistics – large overlap according to definition from Institute of Logistics and Transport:

‘Logistics is the time-related positioning of resource, or the strategic management of the total
supply chain. The supply chain is a sequence of events intended to satisfy a customer. It can
include procurement, manufacture, distribution and waste disposal, together with associated
transport, storage and information technology.’

Value chain concept – has similar components such as inbound and outbound logistics,
production and sales and marketing. Different orientation which is how to deliver customer
value. Plus separate identification of secondary activities such as HR and IS.

Value networks – interactions between different value chains of a range of organizations.

2. What is the difference between a push orientation to the value chain and pull orientation.

A change in supply chain thinking, and also in marketing communications thinking is the move
from push models of selling to pull models or combined push-pull approaches. The push
model is illustrated by a manufacture who perhaps develops an innovative product and then
identifies a suitable target market. A distribution channel is then created to push the product
to the market. This situation is shown in Figure 6.3 (a) where it can be characterized by the
statement ‘This is a great product, now who shall we sell it to?’ or the quip about the original
model T Ford – ‘you can have any colour, so long as it is black’. The typical motivation for a
push approach is to optimize the production process for cost and efficiency.

3. How can information systems support the supply chain?

Information systems are used to increase the efficiency of information flow by:

 delivering more information (e.g. sales data in Tesco TIE system)

 analysing information (e.g. alerting a large order)

 delivering it more rapidly (e.g. reduced lead times in e-procurement)

4. What are the key strategic options in supply chain management?

 How to restructure supply chain (vertical integration/disintegration/virtual integration)

 How to restructure (disintermediation, reintermediation, countermediation)

 How to restructure relationships in a value network

New procurement models e.g. auctions and B2B exchanges

Chapter 7
1 Outline the two main methods how companies purchase supplies and the two broad
divisions of supplies needed.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

‘There are two broad categories of procurement; those that relate to manufacturing of
products (production-related procurement) and operating or non-production-related
procurement that supports the operations of the whole business and includes office supplies,
furniture, information systems, MRO goods and a range of services from catering, buying
travel or professional services such as consulting and training. Raw materials for the
production of goods and MRO goods are particularly important since they are critical to the
operation of a business’.

2 Taking your answer from one, give examples of B2B exchanges that have been created
to meet these purchasing needs.

Production-related procurement examples include Vertical Net (www.vertical.net), sites such

as www.oilandgas.com, Industry-to-Industry (www.itoi.com) which trades petrochemicals, and
in pharmaceuticals (www.chemdex.com).

MRO type sites include the Staples example from Schlumberger.

3 Draw a sketch that shows the main stages and people involved in traditional procurement
and e-procurement.

This is Figure 7.1 on p289.

4 Outline the main reasons for e-procurement.

 Cost reduction

 Reduced lead time

 Better quality

See also the five rights of procurement on p289.

5 What is maverick purchasing? What safeguards need to be introduced into e-

procurement to avoid this?

This is where purchasing is poorly controlled and users within departments may order
products that are not from a favoured supplier, do not meet company standards (e.g. of
software) or are unnecessary. E-procurement enables checks such as limits on purchasing or
from preferred sources.

6 Explain the differences between the buy-side, sell-side and marketplace options for e-
procurement.

 Buy-side – Buyer invites bids through tender placed on its own site.

 Sell-side – Buyer goes to supplier web site to purchase.

 Marketplace – Buyer goes to a neutral marketplace to purchase.

7 Outline the benefits and disadvantages of each of the options in 6.

 Buy-side – Only suits really large buyers, but displaces work to suppliers. Key suppliers
may be missed if unaware of tender. Can specify integration with IT systems.

 Sell-side – Effort placed on buyer to find sources. Integration with IT systems potentially
more difficult.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 Marketplace – Theoretically gives widest range of suppliers and if integrated with a

standard exchange which gives a standard method of data exchange and flexibility to
move suppliers. Difficulty in choosing exchange with critical mass.

8 What are the organizational implications of introducing e-procurement?

 Less staff time involved with procurement requires making staff redundant or re skilling.

 Education and training needed to sell system to the staff using it.
Better control of purchasing (reduce maverick purchasing).

Chapter 8
1 Explain the link between e-marketing and e-business and why they may be considered
separately.

E-marketing is a subset of e-business focusing on sell-side e-commerce and delivering value

to customers. Adding value does also need to consider the upstream supply chain since this
influences cycle time and product quality.

2 Outline the stages in a strategic e-marketing planning processes, for each stage noting
two aspects that are of particular importance for e-marketing.

 Situation – where are we now? 1. External (customers, competitors, PEST), 2. Internal

resources

 Objectives – where do we want to be? Online revenue contribution, complementary vs.

replacement

 Strategy – how do we get there? Market and product positioning

 Tactics – how exactly do we get there? 6Ps, in particular, promotion and place

 Action – what is our plan? Project planning and resourcing

 Control – did we get there? Marketing research

3 What is the Internet contribution and what is its relevance to e-marketing strategy?

Can consider a direct and indirect form:

Direct – Online revenue contribution

An assessment of the direct contribution of the Internet or other digital media to sales, usually
expressed as a percentage of overall sales revenue.

Indirect – Online promotion contribution

An assessment of the proportion of customers (new or retained) who use the online
information sources and are influenced as a result

This is useful for objective setting, highlighting the importance of the new channel.

4 What factors will govern the Internet contribution that is set for a given organization?

Deciding on the objective can use a form of Kumar or de Kare-Silver test i.e.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

Kumar: high if:

1 customer access to the Internet is high;
2 the Internet can offer a better value proposition than other media (i.e. propensity to
purchase online is high);
3 the product can be delivered over the Internet (it can be argued that this is not
essential for replacement, so it is not shown in the figure);
4 the product can be standardized (user does not usually need to view to purchase).

De Kare-Silver: high if:

1 Product characteristics
2 Familiarity and confidence
3 Consumer attributes

5 Why and how should a company approach benchmarking of online competitors?

Why – rapidly evolving marketplace – new entrants and new services give competitive
advantage.

Approaches – companies should review:

 well known local competitors (e.g. UK/European competitors for British companies);

 well known international competitors;

 new Internet companies local and worldwide (within sector and out of sector).

Can use three-criteria test:

1 Business effectiveness (online revenue, profitability).
2 Marketing effectiveness. Outcomes such as leads and sales.
3 Internet effectiveness. Effectiveness of web site as a communications tool.

6 Describe what is meant by a complementary and replacement Internet channel strategy

and give examples of products for which companies follow a particular approach.

 Complementary – Internet is additional channel, but less significant than others – high
value products and services with complex buying decision or strong channel.

 Replacement – Internet becomes main channel to market for sales and support – typically
lower value product, or straightforward buying decision (commodities).

7 Summarize new opportunities to vary the marketing mix that arise through deploying the
Internet.

Use 6Ps as framework

 Product (New digital products and value-adds)

 Price (Price reduction, new pricing models)

 Place (New representation on intermediaries, direct-selling)

 Promotion (Integration of online and off-line techniques)

 People, Processes and Physical evidence (New forms of service delivery)

8 How can online and off-line techniques be used in the control stage of strategy?

This question is about marketing research aspect of control. Refer to Chapter 12.

Online techniques – server log file analysis, pop-up surveys, e-mail audits
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

Off-line techniques – traditional surveys of customer service.

Chapter 9
1. What are the goals of acquisition and retention in an online context?

Customer acquisition

Techniques used to gain new customers

Obtain leads via e-mail, qualify via profiling and convert to sales

Customer retention

Maintain relationships with existing customers through maintaining a dialogue via e-mail and
web-site

2. Outline the differences between permission marketing and interruption marketing

including reference to the terms opt-in and opt-out.

Permission marketing

Customers agree (opt-in) to be involved in an organization’s marketing activities usually as a

result of an incentive

Interruption marketing

Marketing communications that disrupt customers’ activities, for example, telesales call, and
is not explicitly opt-in.

3. Summarize the main types of online marketing communications for traffic building.
 Search engine registration
 Link building
 Banner advertising and sponsorship
 PR
 E-mail
 Affiliate marketing

4. Explain why mixed-mode buying needs to be understood by those managing an e-

commerce site.

Many buying decisions are complex – they are not only made online, but using a combination
of online and offline. To influence the decision companies need to be active both online and
offline in influencing a range of mixed-mode buying scenarios.

5. Explain a range of techniques for attracting repeat visits to a web site.

 Direct e-mail with incentive/offer
 Personalization
 Community/news
 Competitions and promotions

6. What is the difference between personalization and mass customization?

 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

Personalization is generally considered to be one-to-one marketing where the customer

selects their choices. Mass customization also involves tailoring, but from a limited number of
options. There is overlap between the two concepts.

7. How can an e-commerce site be used to achieve extension in CRM?

Customer extension

Techniques to encourage customers to increase their involvement with an organization

See Question 5.

8. What are the management issues in managing data and applications integration in CRM?
 Cost of integration
 Disruption to service during integration
 Data transfer from legacy to new systems
 Single vendor or multi-vendor sourcing

Chapter 10
1. Summarize the main types of change that need to be managed during introduction of e-
business.

 Business level change – new business processes

 Technological change – new systems

 Organizational structure change

 Organizational culture change

 Organizational strategy change

 People change – new roles and working practices

2. What approaches must managers take to successfully achieve change management?

 Support from senior management

 Education – explain why the system is required by the business and its impact on staff

 Involvement –involve employees in specification and testing

 Training – explain new procedures and operation of software

 Risk management – assessing problems and putting solutions in place

3. Outline the main stages of a sell-side e-commerce implementation.

 Initiation

 Analysis/market research

 Specification of business objectives and application requirements

 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 Design of solution including selecting implementation platform

 Integrate different applications and build interface

 Migrate data about customers and products to the system

 Test

 System live

 Maintenance

4. Explain the role of prototyping in developing a sell-side e-commerce solution.

Prototyping

Prototyping is an iterative process where web site users suggest modifications before further
prototypes and the live version of the site is developed.

The main benefits are as follows:

 It prevents major design or functional errors being made during the
construction of the ‘web site’ that may be costly and time consuming to fix once the
site becomes live and may also damage the brand. Such errors will hopefully be
identified early on and then corrected.
 It involves the team responsible for the web site and ideally the potential
audience of the web site in proactively shaping the ‘web site’. This should result in a
site that more closely meets the needs of the users.

The iterative approach is intended to be rapid and a site can be produced in a period of
months or weeks.

5. Describe four different approaches to retaining staff.

Various elements of a benefits package

 Increase remuneration
 Training and reskilling
 Share options
 Pensions, etc.

6. What alternative approaches are there to structuring e-commerce within an organization?

1. A separate operating company. Example Prudential and Egg (www.egg.com).

2. A separate business unit with independent budgets. Example RS Components

Internet Trading Company (www.rswww.com)

3. A separate committee or department manages and coordinates e-commerce.

Example, Derbyshire Building Society (www.derbyshire.co.uk).

4. No formal structure for e-commerce. Examples: Many small businesses and the
Retail and Engineering Company.

7. Which type of organizational culture is most amenable to e-business related change?

The four types of culture described in the text are as follows:

 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

1. Survival (outward-looking, flexible) – the external environment plays a significant role

(an open system) in governing company strategy. The company will likely be driven
by customer demands and will be an innovator. It may have a relatively flat structure.
2. Productivity (outward-looking, ordered) – interfaces with the external environment are
well structured and the company is typically sales-driven and is likely to have a
hierarchical structure.
3. Human relations (inward-looking, flexible) – this is the organization as family, with
interpersonal relations more important than reporting channels, a flatter structure and
staff development and empowerment are thought of important by managers.
4. Stability (inward-looking, ordered) – the environment is essentially ignored with
managers concentrating on internal efficiency and again managed through a
hierarchical structure.

Of these, 1 and 3 are the preferred approaches

7. What are some of the risks of e-business change, and how can they be managed.

8. See table (above in Activity 10.5 answer) for a suggested solution

Chapter 11
1 What are the risks if analysis and design are not completed adequately?

For an e-commerce service

 Poor user interface

 Wrong type of customer services (content and data)

 Slow performance

 Business processes inefficient

 Poor security

2 Distinguish between process analysis and data analysis.

Process analysis reviews the sequence and speed of events in a business transaction such
as ordering or customer service. Data analysis reviews the data requirements and structure
needed to support this process.

3 What are workflow analysis and workflow management systems?

Workflow Management
Workflow Management (WFM) is the automation of information flows and provides tools for
processing the information according to a set of procedural rules.

4 What is legacy data and what are the options for incorporation into an e-commerce
system.

Legacy data is typically from ageing financial, order entry and accounting systems. This old
data is often not integrated and it is difficult to get a single view of customer or financial data.
It is incorporated into e-commerce systems using middleware or enterprise application
integration.

5 What are the four requirements of a secure e-commerce site?

 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

1. Authentication (customer needs to avoid fraud from customer, alternatively customer

needs to check reputable company)
2. Privacy and confidentiality (main aspect is to protect customer privacy)
3. Integrity (applies equally to both)
4. Non-repudiability (required by company)
6 Explain the concepts of digital keys and digital signatures and how they relate.

Digital certificates (keys)

Consist of keys made up of large numbers that are used to uniquely identify individuals.
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

Digital signatures

A method of identifying individuals or companies using public key encryption.

Digital certificates are used to encrypt digital signatures to achieve identification of individuals.

7 Explain the notation used for use-case analysis.

Figure 11.8 shows the notation for actors (people) and use-cases (activities in a sequence).

8 Summarize the characteristics of a usable web site according to Jakob Nielsen

(www.useit.com).

 Customer orientation

 Site navigation and structure

 Page design

 Content design

Chapter 12
1 Summarize how the activities involved with implementation and maintenance relate to
analysis and design activities in previous chapters.

Figure 12.1 on p514 explains this. For a prototyping approach, analysis precedes design
which precedes implementation and maintenance. However, these are repeated
consecutively in the iterative approach of prototyping.

2 What are the risks of launching a new e-commerce site if implementation is not conducted
effectively?

 Low conversion rate to outcomes, high attrition rate (due to inadequate testing of design)

 Low repeat visits (due to inadequate testing of design)

 Data errors

 Errors and site downtime

 Security breaches

3 Distinguish between static and dynamic content and methods of achieving them.

Static web content

It is a web page view that is identical every time it is loaded. This is typically achieved through
static HTML.

Dynamic web content

It is a web page view that varies according to user preferences or environment constraints.
This is typically achieved through dynamic access of databases according to user
requirements.

4 What are the objectives of testing? How do these relate to an e-commerce site?
 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

 Identify errors in requirements analysis, e.g. poor interface design, wrong information or
services available

 Identify technical errors (bugs), e.g. financial transactions

5 Summarize the advantages and disadvantages of the different changeover methods.

Table Advantages and disadvantages of the different methods of implementation

Method Main advantages Main disadvantages

1 Immediate cutover
Straight from old system to new
system on a single date
2 Parallel running
Old system and new system
run side-by-side for a period
3 Phased implementation
Different modules of the system
are introduced sequentially
4 Pilot system
Trial implementation occurs
before widespread deployment
Rapid, lowest cost
Lower risk than immediate
cutover
Good compromise between
methods 1 and 2
Essential for multinational or
national rollouts
High risk. Major disruption if
serious errors with system
Slower and higher cost than
immediate cutover
Difficult to achieve
technically due to
interdependencies between
modules
Has to be used in
combination with the other
methods

6 What are the issues for managers of content management?

 Frequency of update or event that prompts update

 Checking quality of update (review process)

 Tools used for update

7 What are the main elements of an e-commerce site measurement plan?

The framework described in the text is:

 Channel promotion

 Channel behaviour

 Channel satisfaction

 Channel outcomes

 Channel profitability

8 What are the elements of a budget for an e-commerce site enhancement?

Tangible business benefits:

1 Reduced costs

2 Increased revenue

Intangible business benefits:

 Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual

3 Faster time to market

4 Improved customer satisfaction/brand equity

Tangible costs:

1 Physical costs

2 Planning costs

3 Implementation costs including staff, hardware and software

4 Operational costs including staff, hardware and software