Best exams techniques

This is what it all comes down to; you’re sitting in the exam hall, waiting to get your hands on that
anticipated piece of paper. You’ve jammed a ton of information into your brain and your fingernails are
non-existent – it’s time to get down to business!

Yes the exam environment may be different across disciplines. Computing students will sit some tests
in front of a computer with their fingers poised to code. A practical element will contribute to science
student’s final grade. It doesn’t matter if you’re studying English, Economics, Psychology or History,
every exam can be approached in much the same way with these exam writing tips.

We’re here to give you some help answering and writing exam questions that will show your knowledge
to the person who reads your paper.

How to Answer Exam Questions

Pay attention! These quick tips should be common sense but many students who are under exam
stress fail to see their mistakes. We’re going to help you avoid a major exam disaster by pointing you
in the right direction.

Here’s our top exam writing tips to help you understand how to answer exam questions:

1. Practice Past Papers

First of all don’t confuse the method or the words changing on any kind of question. Pick the main
theme and objective of the question and forget related question wording. In this point mostly student
get confused about the answer which is in there mind. There really is no better way to get exam ready
than by attempting past papers. Most exam bodies should have past papers available online but your
teacher will get you started on these in class.

This process isn’t just about preparing an answer for a specific question, it’s about understanding how
you approach a question in an exam, how to structure your answer, the timings you should assign and
what information will get marks.

If you want to create an easy way to test yourself with past papers and feeling some psychological
issues about your mental level then try the to concern Kashaan Academy for taking some useful
guidance regarding your exams:

2. Read All Questions Carefully

The stress of the situation can cause you to misread a question, plan your answer out, start writing
your response and then realize you made a mistake and wasted vital time. Even though you generally

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won’t be writing answers to every question on the paper, reading all questions thoroughly will ensure
you make the right choices and can highlight how much you know about the topic.

Don’t forget to attempt all questions that you have selected. However, be careful of MCQ questions
with negative marking. If you’re not sure of the answer you could cost yourself some valuable marks.

3. Manage Your Time

This is where you need to be strict on yourself. Once you have assigned a time limit for each question,
you MUST move on once you hit it or you won’t be able to give the next question your full attention.

Remember to leave yourself some time at the end to go back over your answers and add in little notes
or pieces of information about the topic. You never know, this could help bump you up a grade!

4. Structure Your Answer

Write to maintain heading and points in your answer. In this style of writing your question getting
perfect and looking good. As you give heading to your answer your opinion and vocabulary getting
sharp and sharp in your mind.

Exam Writing Tips Don’t just jump into writing your answer. Take the first few minutes to plan the
structure of your essay which will save you time when you are delving into meaty parts. Always stay
on topic; if you’re discussing the role of women in society as portrayed by the author in Of Mice and
Men, don’t digress and start outlining other themes in the book for example. Most essays should have
an introduction, three main points and a conclusion. A lot of students see a conclusion as a final
sentence to finish the piece off. A strong conclusion give an A grade student the chance to shine by
bringing everything together and fortifying their opinion.

5. Explore Both Sides of an Argument

Building your argument in the main body of your exam answer will give your overall opinion credibility.
English language questions, for example, encourage you to explore both sides of an argument and
then conclude with a critical analysis of your answer.

Many questions you approach will look as though they seek a straightforward answer but in reality they
want you to fully outline a structured essay. Don’t fall into the trap of providing a one-sided view, get
your hands dirty and open your mind to other possibilities.

6. Review Your Answers Thoroughly

Smart students can still make the mistake of handing their answer book in without checking through
what they have written. Proofread your answers as much as you can to correct any spelling mistakes
and add any extra comments you think are worth mentioning. You will be surprised what you can spot
in those last few minutes. This is your last chance to throw in that quotation, list other relevant points
or even draw a quick diagram. Now is not the time to drop your game, show the examiner what you’re
made of!

Remember, the exams are not designed to trick you. Don’t panic on the day of your exam or this brain
freeze could mean that you get a lower grade that you truly deserve. Convince yourself that you know
how to answer exam questions and your almost there.

Let’s start to prepare your exams. We hope

you will find out a better Student Regarding
your study and exams, Kashaan Academy
wishes for you and to all the best for your
exams and upcoming life.
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 Solved Guess paper
E-COMMERCE (8554) MBA/M. Com
Q. 1 Elaborate the steps required to transform business to e-business? How can electronic
commerce help to reduce the production cycle time? (20)

Making the decision to change from traditional business methods to ebusiness is a big step, but one
that can lead to tremendous business growth if handled properly. While many of your business
processes and operations may remain the same, there are certain things you will need to consider if
your business is to make a successful transition. Many companies find the shift from the high overhead
costs of running a traditional business to the much lower expenses involved in running an ebusiness to
be reason enough to make the change.

Operating Procedures

The first step in changing from one type of system to another is to document all of the company’s
operations, in detail. Base your ebusiness procedures on your current methods, adapting them
wherever necessary to fit the new way of doing things. Plan out each step in the process, starting with
how you will receive orders, fill them and ship the completed orders to your customers. Don’t forget to
build in customer service and procedures for returns and refunds. Much of ebusiness can be
automated, so you often need fewer people to handle the same number of orders as before, though
you may want to include plans for handling expanding quantities of orders, since an ebusiness is open
for business 24 hours a day, seven days a week.

Website

When transitioning a conventional business to an ebusiness, your website becomes the face of your
company in the minds of your customers. Just as you wouldn’t want to be located in a dirty, shabby
store, your ebusiness should operate from an attractive, easy-to-navigate and highly functional
website. The pages should load quickly and contain all necessary information, but not be so crowded
that potential customers are overwhelmed when they see your site. While you can use some of the
low-cost business systems available in the marketplace that allow you to design your own pages, if at
all possible hire a designer and invest in a site that has a look that is unique to you and your business.
This sets your business apart from those using cookie-cutter websites and makes your site more
memorable.

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Advertising

As in traditional business, advertising is an important means of customer acquisition in ebusiness; the

only difference between the two is the method. Investigate the different marketing options available
and determine which ones you feel will fit your business best. One commonly used method of bringing
customers to your website is pay-per-click advertising, where you pay each time someone clicks on
your ad. Small text ads, similar to classified ads in the newspaper, work this way, as do the larger
banner ads that appear in different places on many pages. Other ways of bringing in customers include
providing useful content in the form of articles and blogs. The content should be optimized for the
search engine, which means that the text contains keywords related to the business as a whole to help
the search engines catalog the pages as highly relevant to the search topic. Search engine optimization
is a combination of art and science, and if you are inexperienced in this area you can hire a consultant
to help you optimize your pages.

Changeover

Once you have everything in place, it’s time to make the change from running a traditional business to
operating an ebusiness. You can choose to do this in increments, phasing in the new and phasing out
the old, or you can make the switch all at once, cutting off all the old procedures and depending
completely on the ebusiness for your company’s survival. An abrupt switch may be the best way to go,
especially if you are focusing on a different market share for your business. According to Walt Geer,
who switched his company from a small promotional products business that operated nationwide to an
online business in one abrupt move, it is scary to make such a change but rewarding in the long run.
Entrepreneur magazine reports that the change ultimately moved Greer’s tiny company, now known as
the eCompany Store, into a position where it was able to compete for – and land – national accounts.
You have to decide what works best for your particular situation, but sometimes a complete break with
the old way may be the best, allowing you to focus exclusively on ebusiness.

The pros and cons of opening a traditional business vs. an e-business are similar in scope to the
competitive coexistence that authors and readers see between print vs. electronic book publication.
Although a brick-and-mortar shop and an online marketplace are both "real," they appeal to different
demographics, showcase their goods through different methods and offer consumers different levels of
pricing, service and convenience.

Needs Assessment

The nature of your small business and the type and amount of customer interaction it requires to be
successful dictate whether you need a physical address or a virtual one. If, for example, you're
providing writing, copy-editing, consulting, accounting or billing services, the primary interface with
your clients is by phone, email and fax, negating the need for work space beyond a home office.
Conversely, a small business in which you sell apparel, cosmetics, jewelry, art, furniture or home
accessories will likely require display space, dressing rooms and appropriate storage.

Legalities and Expenses

Traditional businesses and e-businesses both require you to have a business license. Registering your
business name with the state registrar, acquiring a federal tax ID number, researching local zoning and
licensing regulations, purchasing insurance pertinent to your needs and establishing banking
relationships are critical steps in setting up shop in either venue. While telecommunications equipment,
office supplies and a marketing/advertising budget are necessary expenses in both traditional and
electronic commerce, a traditional business model has the added overhead of a monthly lease, utilities,
staff salaries and benefits, exterior/interior maintenance costs and security systems. An e-business run
from a home office utilizes resources that already exist and which are then prorated as deductions for
tax purposes.

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Customer Convenience

If the weather is bad, the parking is a challenge or the hour is late when inspiration strikes to buy
something, an e-business that is open 24/7 often has more appeal to customers than a brick-and-
mortar shop located across town and only open five days a week from 10 to 4. Shopping for goods
electronically doesn't just save customers time and energy; it can also save them from paying sales
taxes, provide them with more outlets to comparison-shop and eliminate the feeling of being pressured
or followed around by a salesperson. Many customers, however, prefer the ability to personally inspect
the merchandise, ask for advice and assistance and be able to take their purchases home immediately
rather than having to pay shipping costs and wait for delivery. A traditional business satisfies those
needs in addition to fostering an environment of trust through personal conversation and face-time.

Home vs. Work

As a small business owner, you are just as likely to obsess about its well-being whether it's 10 miles
away or just down a hallway. Being able to separate your work life from your personal life is often a
greater challenge when you and your job live under the same roof. The 24/7 nature of e-business
makes it all too tempting to start perceiving yourself as accessible to your customers round-the-clock,
something that would not occur if you kept traditional hours at a store. Instead of the expected
freedom to manage time on your own terms as an e-entrepreneur, you could actually find yourself a
slave to your own computer. While emergencies can come up in either scenario that require flexibility
or "overtime," be mindful of your own needs to rest, spend time with family and pursue creative
outlets. In other words, recognize when it's time to lock that virtual door and call it a day.

Q. 2 What is meant by search engine? Write short notes on the major search engines
available on the internet. (20)

Search engines rank Web pages based on a variety of factors related to content quality and relevance.
Useful, well-written and trustworthy pages rank higher than self-serving pages filled with ads and thin
content. Good search engine optimization uses keywords, titles, meta tags and backlinks -- other sites'
links to your page -- to show search engines that your site is relevant to a particular search term, while
bad SEO uses deception that can harm your site's ranking.

Weighted Ranking Algorithm

Some factors count more toward your site's ranking than others. Content and backlink quality,
keyword relevance, locality and HTML title tags carry more weight than other important variables, such
as how fast your site loads and how many times a keyword appears on your page. Visit Search Engine
Land for a complete breakdown of each variable and its weight in a ranking algorithm (link in
Resources). Because SEO uses organic search ranking rather than paid advertising to increase
visibility, optimizing your site mostly involves making it more useful and engaging to visitors, which is
why quality and relevance matter more than HTML meta tags and URL keywords.

Web Spiders and HTML Text

While the visible part of your site must contain engaging content and well-researched keywords, your
site's HTML and architecture must also appeal to the spiders crawling it for information. These
programs, also called Internet bots, scan your HTML files for keyword-related title, description and
header tags, placing most importance on the title. If your site contains relevant images, video or audio,
spiders can't find them unless your HTML file describes them with text. Visit an SEO site, such as SEO
Browser, Browseo or SEO Text Browser, and search for your website to see a Web spider's view of your
HTML structure (links in Resources).

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High-Quality Backlinks

Backlinks tell Web spiders that other sites find your content useful enough to direct their visitors there,
and backlinks from well-established, trustworthy sites weigh more than those from low-ranking sites.
You can acquire backlinks organically by creating authoritative content that people genuinely want
their sites' visitors to see, but this process takes time. Submitting press releases to news sites such as
NYTimes.com or USAToday.com creates valuable backlinks, although the writing must be professional
and interesting to these sites' readers. Contacting administrators of other sites in your subject area to
exchange links can also raise your ranking.
Harmful SEO Practices

The two most harmful SEO practices are buying backlinks and cloaking your site from Internet bots.
While these methods can sometimes raise your site's ranking, if a search engine detects them, it may
penalize or blacklist your site. Web cloaking uses a program to detect when an Internet bot crawls your
site and shows it a different page than what your visitors see. Less harmful practices are spamming
blogs and social sites to create backlinks and awkwardly stuffing your content with keywords. The best
way to rank highly in search results is to understand how Internet bots crawl your site and to publish
useful content that is location-specific when applicable.
Search engine queries can produce 10 or more pages of results, depending on the topic you research.
If the search engine you access presents a long scrolling list of links, the behavior may point to the
way you use the search site, the browser you choose and how you set up both of these options. Search
engine options can affect the results format. The browser add-ons you choose to incorporate for
increased online capabilities can determine how your results appear.

Scrolling Results

Some search engines, including DuckDuckGo, present their results as a continuous, auto-loading
single-page scroll. Once you type in your search criteria and press "Enter," you see results that
continue to fill the browser page as you scroll down. If you press "End" to navigate to the bottom of
the set of results, thinking you'll find a series of numbered links that take you to subsequent pages,
you find an animated "Wait" graphic followed by additional search material.

Search Engine Settings

Most search engines include the ability to set a variety of preferences for how results are presented.
DuckDuckGo includes a Settings link in its More drop-down menu. If you disable its Auto-load
preference, DuckDuckGo switches from continuously scrolled results to displaying "More Links" links
that lead to additional pages. Google's default settings include its instant predictions, which load
prospective search terms as you type your query. Google allows you to control how many results it
displays per page, ranging from 10 to 100. If you set the per-page value to 100 and perform a search
that produces that many results or fewer, the page of links continues to scroll as you navigate through
it.
Browser Plug-ins

You can add auto-loading, auto-scrolling capabilities to search engines that lack the built-in ability to
return results in this fashion. Browser plug-ins can force search sites to load more items automatically
when you scroll to the bottom of a results page. Some of these plug-ins come in versions that support
multiple browsers, including Firefox, Safari and Chrome. Others target only Firefox. Because these
add-ons can affect the behavior of websites besides search engines, try them out on a variety of your
typical online destinations to assure that their behavior suits your needs.

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Other Considerations

Anti-malware protection increases in importance as the amount of time you devote to online research
rises. If you notice a change in the behavior of your Web browser -- or any software you use -- that
doesn't correlate with installing a new application version or plug-in whose new features explain the
behavior you see, verify that your symptoms don't point to a malware infestation. If you're
uncomfortable with the behavior of a browser add-on or any online-oriented software, uninstall it.
PPC Ad Basics

An advertiser pays a publisher or affiliated partner any time an Internet user clicks the advertiser’s PPC
ad on the publisher’s site. As a business owner, you might arrange for other businesses to post PPC
ads on your site or pay to place PPC ads on other websites to drive traffic back to your business
homepage or e-commerce store. Pay-per-click ads that appear on search engine result pages are also
known as sponsored ads. When an Internet user searches for a specific keyword or phrase, an
advertiser's relevant paid PPC ad appears with the search results.

SEO Basics
If you’re like many Internet searchers, you probably don’t often go past the first page of results. For
this reason, it’s critical to have your website’s listing appear on that page. Yet, search engine
algorithms rank websites based on a combination of factors, such as keywords, tags and site content
relevance and quality. With SEO, you set up your site in a way that naturally convinces the algorithms
that your listing is worthy of first page ranking. For example, you might analyze targeted search
tendencies and use the most relevant, commonly-searched keywords in your website content, or
partner with other sites to share links.

Page Layout Differences

On websites, pay-per-click ads appear as static or animated image-based banner ads or text links. On
search engine results pages, they’re usually labeled as advertising and appear above, below or next to
the regular search results in a short list that somewhat mimics the format of the regular search results
listings. Sometimes PPC listings are displayed inside of a box or displayed on a background that's a
different color than the rest of the page. On the other hand, organic SEO listings appear at the top of
the regular listings in the middle of the search results page.

PPC and SEO Tools

The Internet is overflowing with free, low-cost and paid high quality tools designed to help business
owners better understand this topic and succeed. For example, Google and Microsoft both offer PPC-
and SEO-related information and tools (links in Resources). Additionally, many website offer individual
tools for specific needs, such as keyword, tag or anchor text optimizers, duplicate content checkers and
Web traffic analyzers. For example, you can analyze keywords by word, niche or group with tools like
Wordtracker, Keyword Eye or Wordstream’s Free Keyword Tools (links in Resources).

Cost Considerations
With pay-per-click, you pay a publisher whenever someone clicks your ads or you pay a search engine
provider, such as Google or Microsoft, to place ads for your website on results pages. Given the many
free SEO tools online, you don’t have to pay anything extra for SEO, except for the time invested in
setting up your site and links, unless you need expert SEO assistance. As a result, SEO is often
considered more cost-effective than PPC advertising over time.

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Q. 3 What do you understand by HTML? Explain the structure of HTML document. (20)

Some websites online bring up-to-the-minute, customized content, from the latest sports scores to
updates from your friends on social media pages. Others have information that remains constant no
matter who's viewing the site and when they stop by. Sites that change over time are generally known
as dynamic sites, while sites that do not change are static.

Designing a website takes four necessary elements into account, including the website layout, the
individual pages, the navigational structure and the images. Any of these elements can be customized
for the particular website's needs, whether it's a personal website or a business website. Websites
convey information on the Internet in a visual manner, so these four elements contribute to an
interactive experience for the computer user.

Layout

The first necessary element that must be included in web design is the layout. Just as with a magazine
layout, Internet content is structured into sections. At the top of the layout is the header, which
contains the name of the website. The main content is displayed beneath the header, with navigational
elements in a column on the left. The footer spans horizontally across the bottom of the website. The
basic Web layout can be modified to suit a personal or business website's needs.

Pages

After the overall website design layout has been determined, multiple pages can be added. The first
page is called the "Home" page. Additional pages often include an "About" page, a "Contact" page and
additional information pages. Each page of the website uses the same layout to provide a coherent
look to the entire website. Web pages are personalized with their own text and images.

Navigational Structure

Computer users must have a way to navigate through a website. The navigational structure works best
for the computer user when it is easy to understand and clearly marked on each Web page in the
website. Navigational links can be placed underneath the header or alongside the main content on
either the left- or right-hand sides. Navigational links can be in alphabetical order or in order of most
likely used. The links themselves should be a different font color or use a graphic button to stand out.
The "Home" link is usually listed either first or last.

Images

The Internet is a visual medium, so images are necessary elements of website design. Images include
business logos, photos, drawings, background images, navigation buttons, social networking buttons
and other types of images. Images personalize the website design and add a cohesive graphic look to
the website. There should be visual images on each page of the website, in addition to graphics in the
header and the footer. Images can be simple or complex.

Dynamic Web Page Properties

Some of the most popular sites on the World Wide Web today are dynamic pages. Newspaper sites,
social media homepages and in-browser games all feature changing content, showing different text,
images and videos depending on who's visiting and when.
This lets them keep up to date with new content and customize information (and ads) depending on
who is visiting the site. Websites can use small text files, known as cookies, to monitor who is visiting
and display customized content in real time or just serve the latest content available no matter who
visits, such as new headlines or newly updated user submissions on a forum.
Some pages can generate dynamic content purely on a server, serving the current version of the site
as a whole, while others fetch bits and pieces of content from a server or various servers and splice
them together in the user's browser. Information can also be fetched over time or as a user interacts
with the site, using programming techniques that let the browser automatically request more data from
the server.

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Dynamic pages are necessary for many features of today's web, from online shopping to social media
to media streaming, but complex ones can take more time to load and more processing power and
memory to display on a user's machine. Some users may also object to sites that become overly
familiar with their browsing habits, logging too much of their activities or using them to serve highly
specific ads.

Static Site Properties

Static by definition means something that does not change. The first pages on the World Wide Web
were largely static and unchanged, delivering the same information about a particular topic to anyone
who visited. In some cases, sites may evolve slightly over time but are still largely static, meaning that
they only change when manually changed by their creators, not on a regular and automated basis.
Tools called static site generators can be used to splice together multiple files of web code and
formatting information to build a fast-loading, static site. Static sites can be relatively simple to code
and can often load more quickly than dynamic sites, since they don't have to use any sort of
algorithms to decide what data to display or pull in information from multiple servers. On the other
hand, they lack the flexibility of dynamic sites to deal with a wide variety of user interactions, so they
may not be suitable for every purpose.
Time for today's Latin lesson! The word multimedia comes from two Latin roots, multi and
media: multi-, meaning several or many, and media-, meaning in the middle. This multimedia
definition tells us that materials on the internet, or in your business presentations, involve several
forms of communication to connect (that is, to be in the middle of) the sender and receiver. As any
multimedia developer knows, a multimedia system consists of at least two, and perhaps all, of the
following types of communication.

Text Materials

Text takes us back to how the internet started, as a means of sending written messages back and forth
between researchers. Actually, it takes us back quite a bit further, as pretty much every office memo
ever written has mostly consisted of text with perhaps a smidgen of other media types thrown in. Text
is still a primary way to transmit information, although nowadays, it is also used to augment other
forms of communication, such as a text description of a photograph.

Photographs and Other Still Images

Illustrations are perhaps the oldest form of media, harking back at least as far as the prehistoric
paintings on cave walls found in various locations around the world. Gutenberg's printing press in the
1400's enabled mass distribution of multimedia works containing both text and images. The growth of
electronic communications has meant that older text-only forms of communication could be enhanced
with photographs and images as well. Small images such as thumbnails or icons are often used as a
visual "entry point" to larger images or more detailed information.
Text and images sometimes combine in a single form, as many software programs make it easy to
create text art, a form of lettering that combines a strong visual element as well.

Audio Files

Your website or presentation can add sound, from a musical background to a spoken explanation, by
including audio files. Even digital cameras, a quintessentially image-based technology, have been
engineered these days to record sound as well. Many sound files are compressed, which reduces the
file size without greatly sacrificing sound quality. Compressed files require less storage space and
stream faster when sent over the internet or transmitted to local systems.
Video Presentations
Video presents moving pictures and typically combines images and sound for a compelling multimedia
experience. Of course, videos can include text as well, which often appears as captioning for spoken
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words or as text in an image, as in the case of a slide presentation. Video files are some of the most
memory-intensive multimedia applications, but clever streaming methods makes their use practical in
everyday use.
GIFs and Other Forms of Animation
Animated files occupy a middle ground between still images and video. GIFs, which is an abbreviation
for graphic image files, in particular, are small files that present a single image or rapidly display a
sequence of a few images to give the appearance of motion.

Q.4 Explain the features of a good corporate website. How does it help the organization to
enhance its business activities? (20)

The client processes provide an interface for the customer that gather and present the data on the
computer of the customer. This part of the application is known as presentation layer. The server
processes provide an interface with the data store of the business.

This part of the application is known as data layer. The business logic, which validates data, monitors
security and permissions and performs other business rules, can be kept either on the client or the
server. The following Figure shows the e commerce system two-tier architecture diagram.

E- Commerce System Architecture: Three-tier architecture:

The three-tier architecture emerged in the 1990s to overcome the limitations of the two-tier
architecture. In three-tier architecture, the user interface and the business application logic, also
known as business rules and data storage and access, are developed and maintained as independent
modules. The three-tier architecture includes three tiers: top tier, middle tier and third tier.

The top tier includes a user interface where user services such as session, text input, and dialog and
display management reside. The middle tier provides process management services such as process
development, process monitoring and process resourcing that are shared by the multiple applications.
The third tier provides database management functionality. The data management component ensures
that the data is consistent throughout the distributed environment, the centralized process logic in this
architecture, which makes administration easier by localizing the system functionality, is placed on the
middle tier.

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The following Figure shows the outline of the e commerce system Three - tier architecture diagram.

The client server architecture advantages:

The client-server architecture provides standardized, abstract interfaces to establish communication

between multiple modules. When these modules are combined, they become an integrated business
application. Each module is a shareable and reusable object that can be included in another business
application. In the client-server architecture, the functions of a business application are isolated within
the smaller business application objects and so application logic can be modified easily. In "the client-
server architecture, each business application object works with its own encapsulated data structures
that correspond to a specific database. When business application objects communicate, they send the
data parameters as specified in the abstract interface rather than the entire database records. This
reduces the network traffic. In the client-server architecture, a programmer can develop presentation
components without knowing the business application logic.

Telecommunication Infrastructure Requirements

This mostly entails bandwidth and security. The requirement for bandwidth varies widely from one e-
commerce activity to another making it hard to generalize. Bandwidth usually becomes crucial for
service-based B2B e-commerce as opposed to product-based one and high-traffic B2C e-commerce as
opposed to low-traffic one. Two main components of security requirements for e-commerce are type of
firewall and encryption/algorithm mechanism. This also varies widely from one e-commerce activity to
the other. Ranging from protection against unwanted disclosure of client information to guarantee of
reliable electronic payment. Security requirements are a crucial part of e-commerce.

Hardware Requirements for E-commerce

Hardware requirements for high-traffic sites may be dependent on the following issues: number of
transactions per second; number of hits per second; number of queries per second; number of queries
done by RDBMS per second; number of pages served per second involving all of the above parameters.
Some other factors that need to be considered when setting up a high traffic e-commerce site include
clustering i.e. use of backup servers which automatically takes over operations in case of failure of
primary ones. Low-traffic sites can be easily served from a single machine depending on the needs of
the business. Pentium II/III based Intel server running Linux can serve hundreds of unique customers
each day.

Software Requirements for E-commerce

several software are available free on the Internet that can be used to build e-commerce exchanges.
Some examples are Apache Web Server, Apache-Jserv Servlet Engine, Linux Operating System,
mySQL database, postgresql etc. Many of these open source software may not be adequate for high-
traffic sites.

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Technical Skill Requirements

A systems administrator must have a good knowledge of computer hardware, must be able to maintain
and upgrade hardware including hard drive, processor and motherboard. He/she must also have the
skill to install and compile Apache, mySQL and Java servlet engine. A developer needs to be a high
level programmer with a few years of experience in the industry and must possess a clear
understanding of how an e-commerce system works. Understanding how information flows from one
end of the system to another and what modifications take place in between is essential. Specific
required skills include programming skills in C, PHP and Java and knowledge on SQL programming and
data architecture

Transform Web-based programs

A technical assistant can help transform Web-based programs into trouble-free, fast moving,
interactive technology that keeps learners involved and the instructor on track. Having a technical
assistant enables the instructor to stay focused on content while the assistant takes care of everything
else.

It is a common misperception that delivering courses online diminishes the personal connection
between students and teacher. On the contrary, online learning tools present a new universe of
possibilities for creating an individualized, highly effective environment that enhances and personalizes
the learning experience.

But can educational institutions make a profit from their online programs? People are still reluctant to
pay for online content and generally surfers do not see why anyone would pay. Other issues related to
students include their psychological reactions to the new way of learning. Some may have a fear of
technology. Others may have a low level of technology skills, though this is changing as more
universities are training students more thoroughly. Some students may struggle with independent
learning and feel insecure with an amorphous teacher.

Online teaching/learning are not fixed in time or space. Many students find the flexibility of online
learning a practical alternative to sitting in a campus classroom for hours on end. Students can interact
with the instructor and their classmates at any time from anywhere to seek clarification for issues they
encounter in their homework assignment, to discuss topics raised in the course contents, or to initiate
new discussions on related topics. A successful online discussion has the same synergistic effect as
group or in-class discussion, in which students build on one another's perspectives to gain a deeper
understanding of the materials form different perspectives.

Q.5 Define E-Commerce and discuss its impact on entire business world and predict likely
future directions of c-commerce. (20)

Information technology has transformed the way companies conduct business. Technology allows
businesses to automate manual operations and process information much faster. While business
technology often is used through personal computers, server storage and point-of-sale or cash register
systems, another major technological advancement is the Internet, which has created new
communication forms and other business methods that companies use when processing financial and
business information.

Facts

The Internet has created an entire business function commonly referred to as e-business or e-
commerce. E-business represents the use of Internet and business technology in a company’s
operations. Most companies in the business environment have implemented some form of Internet or
business technology into their business operations. While some companies faced the major changeover
when developing an e-business function, other companies may have been on the edge of this
technology before the widespread use of the Internet.

12
Features

A significant feature of e-business is the ability to communicate and transfer information via the
Internet. Many companies use e-mail servers that allow managers and employees to send internal
messages or information through e-mail communication mediums. Companies also have developed
business websites that allow consumers to review information about the company and its products
before making purchases. These websites also provide consumers with a means for communicating
with the company.

Function

The Internet also has allowed companies to find ways for lowering operational costs and saving capital
on production of goods or services. Companies often implement business software to track various
business operations and review the efficiency and effectiveness of each department. These business
software packages help managers review information in a real-time format and make better or more-
informed decisions regarding the efficiency of operations. Companies also can enhance their supply
chain by communicating information to the distributors, warehouses and retailers that handle the
company’s products.

Effects

Many companies in the traditional business environment were unable to directly sell goods or services
to consumers and other businesses. These companies, such as manufacturing and intermediate goods
producers, often needed a middleman to help sell goods in the business environment. The Internet
allows these companies to set up websites or other electronic order systems to sell products and
generate a pipeline for future business sales.

Misconceptions

The Internet is not an end-all, be-all solution for business. Many businesses, small and large, often
face significant upkeep charges for maintaining current technology in their business operations. Failing
to maintain current technology in business may allow a competitor to use new Internet-based
technology for creating a competitive advantage in the economic marketplace. Companies also must be
careful to invest in technology that will be supported and commonly used in the business environment.
The Internet has changed the way the world does business, and your company can take advantage of
the technology for its own benefit. E-business is the process of exchanging date or information over
the Internet while taking orders, placing orders or interacting with your own staff, according to online
business resource eCommerce Optimization. By understanding the benefits of e-commerce technology,
your company can be better equipped to use the Internet as a business tool.

Everyone is Equal

When you are interacting with your clients or vendors using e-business, it is difficult for them to tell
how big your business is. With a professionally developed and maintained website, any small business
can look as impressive on the Internet as the large corporations do. It is a level playing field that helps
create opportunity for small businesses.

Order Entry

An Internet order interface that is hooked directly into your real-time inventory software can allow
customers to order products from your company 24 hours a day, seven days a week. You can save
money on hiring a sales staff by opening up an order-entry section on your website for clients that
want to make smaller orders, or for those that only order a few times a year. That frees up your sales
professionals to go out and find new business.

Customer Service

E-Business can save you money on your customer service as well. By making your client's account
information available on the Internet, customers can check their accounts whenever they want. By
creating a customer service section on your website that allows customers to request return product
authorizations, you can increase your customer service levels while lowering your cost of doing
business.
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Marketing

In the first quarter of 2010, consumers bought $34 billion worth of products and services on the
Internet, according to Antone Gonsalves writing for InformationWeek.com. There was also 1.1 trillion
online advertisements created in the same period, according to InformationWeek.com. More
consumers are using the Internet to get their product information, find vendors and buy products. An
e-business presence can help put your company in touch with this growing retail sector.

When analyzing the Internet's effect on the global market and small business, it is important to
remember that the Internet carries information as well as commerce. The effects of instant information
can be as powerful as the ability to reach a worldwide audience. But small business still needs to
carefully examine the effects of the Internet on international markets to understand whether or not an
online presence is the right move.

Product Development

Prior to the advent of the Internet, information traveled around the world via telephone, television or
print. Large businesses that were working on advances in technology would have access to the newest
information, but small businesses would have to hunt for the information on their own. The Internet
has allowed small businesses instant access to any new product developments and technological
advances that can help improve their products and compete with larger companies.

Information Exchange

The way that small businesses exchange information has changed drastically since the Internet has
become popular. Small businesses did not have the financial resources to arrange large meetings with
suppliers or developers that would require air travel and accommodation expenses. Now, through
email, online video conferencing and document-exchange websites, small businesses can collaborate
with developers and vendors all over the world inexpensively and with a full exchange of necessary
information.

Marketing

One of the more significant effects that the Internet has on global markets for small business is the
ability for small businesses to reach an international audience for a very low cost. A corporate website
can become a marketing resource for a company that can be accessed by anyone in the world. Social
networking websites allow companies to interact with millions of potential clients worldwide at no cost.

Monitoring

The Internet allows small business owners to be more mobile by making it easier to manage a business
from anywhere. A small business owner on a business trip can stay in real-time contact with his office
through an online chat function and exchange important documents with anyone from any location in
the world. The Internet has allowed small business owners the freedom to pursue business
opportunities while still maintaining control over their businesses.

Q.6 write the short notes on following:

 Strategy roles and job positioning

In a competitive business world, companies should constantly examine their products and services to
better serve customers. What worked and yielded profits last year may not work as well this year.
Product differentiation and positioning are key parts of a company's marketing strategy and are
necessary to keep ahead of competition. They also require an innovative spirit coupled with careful
analysis.

Product positioning strategies are numerous, and the selection of one over another is crucial to how
your company will market its products or services. Selecting the wrong strategy can cost lost time and
a scarce marketing budget. The ramifications of a wrong choice will also probably adversely affect your
14
business's bottom line. Taking a logical approach in selecting a positioning strategy can ensure a good
choice.

Significance

Positioning a company's product or service is simply defining who you are in the customer's eye.
Marketers attempt to create an image or identity for a product, brand or company and usually express
positioning relative to other competitors in the market. For example, the position of a low-price paper
towel is expressed relative to the higher-priced brands.

Considerations

When positioning a product or service, the key is to decide what the sustainable competitive advantage
of the product is versus its chief competition. If a product has a sustainable advantage, meaning that
the product has some unique offering competitors do not have and that it can hold long term, the
product will have a better chance of success. For example, a glass cleaner made of environmentally
friendly and patented ingredients might have a sustainable advantage over competitors providing those
competitors do not develop their own eco-friendly products.

Solution

A simple tool a small business can use to develop a positioning strategy for its products or services is
to use the USP, or the unique selling proposition. The USP identifies and communicates the company's
most compelling offer and benefit in a way that answers the customer's question, "What's in it for me?"
Saying that a company has been in business for 15 years or that the company is dependable is
probably not unique enough to stand up to competitors. But, if the firm can say that it offers on-time
delivery service that is demonstrably better than competitors, then it has a USP.

Time Frame

Positioning strategies should not be considered static. If competitor offerings change, the business
environment changes or the positioning strategy proves to be marginal or unworkable, it is time to re-
think the strategy. However, changing it too often can confuse customers, so make sure it is
necessary.

Product Differentiation

Product differentiation is the incorporation of attributes, such as quality or price, into a product to
encourage the intended customers to perceive it as different and desirable. For example, if your
company sells seat belts to automotive manufacturers, perhaps your unique value is never-fail, on-
time delivery with no rejected belts. If other seat belt manufacturers are not meeting these desired
goals, you will have a unique advantage against your competition, and will have differentiated your
seat belts from those of your competitors.

Organizational structure is about definition and clarity. Think of structure as the skeleton supporting
the organization and giving it shape. Just as each bone in a skeleton has a function, so does each
branch and level of the organizational chart. The various departments and job roles that make up an
organizational structure are part of the plan to ensure the organization performs its vital tasks and
goals.

Purpose

Organizational structures help everyone know who does what. To have an efficient and properly
functioning business, you need to know that there are people to handle each kind of task. At the same
time, you want to make sure that people aren't running up against each other. Creating a structure
with clearly defined roles, functions, scopes of authority and systems help make sure your people are
working together to accomplish everything the business must do.

15
Function

To create a good structure, your business has to take inventory of its functions. You have to identify
the tasks to be accomplished. From these, you can map out functions. Usually, you translate these
functions into departments.

For example, you have to receive and collect money from clients, pay bills and vendors, and account
for your revenues and expenditures. These tasks are all financial and are usually organized into a
finance or accounting department. Selling your products, advertising, and participating in industry
trade shows are tasks that you can group under the umbrella of a marketing department. With
differing ways to organize the tasks, you can always choose something less traditional. But in all cases,
organizational structure brings order to the list of tasks.

Considerations

Employees do best when they know who to report to and who is responsible. Organizational structure
creates and makes known hierarchies. This can include the chain of command within an organization. A
good organizational chart will illustrate how many vice presidents report to a president or CEO and in
turn, how many directors report to a vice president and how many employees report to a director. In
this way, everyone knows who has say over what and where they are in the scope of decision-making
and responsibility.

Hierarchy can also include macro-level management. For example, one department may comprise
several teams. Perhaps several departments form one division of a company, and that division has a
vice president who oversees all the departments and teams within it.

Features

Organizational structure encompasses all the roles and types of jobs within an organization. A
complete organizational chart will show each type of position and how many of these there are at
present. When smaller organizations look at their organizational structures, they usually focus more on
job roles than hierarchy. Small businesses, particularly growing ones, often change quickly -- adding
positions and shifting people's responsibilities as they remain flexible enough to adapt as to go along.
For these businesses, having known definitions of people's roles can be useful, especially as things
change.

Types

Organizations that are very hierarchical are usually referred to as having vertical organizational
structures. Typically, these organizations want their employees having more limited scopes and
performing their jobs in particular ways with little variation. Therefore, they have many layers of
management to oversee that things are done correctly and uniformly. The banking industry is a good
example. Money must be handled carefully and responsibility, there is significant risk involved, and
rules and regulations dictate specific procedures.

Small businesses, innovation-based companies and professional organizations tend to use horizontal
structures. These involve fewer layers of management and more focus on peers and equality. The idea
is that each person takes on more responsibility and has more freedom to perform her work as she
sees fit. Group medical practices are a good example. Physicians don't oversee physicians. There may
be a managing partner who oversees the general operation, but otherwise, professionals are peers
each practicing in their style -- all contributing to the organization's success.

Product Positioning

Positioning is how you provide your product or service brand identification as you go to market. It is
the next step after you have determined how to differentiate your product or service. In the seat belt
example, the seat belt manufacturer can market itself on the premise that it does not miss delivery
times and that its products are free of flaws. The product is positioned against those of competitors on
the basis of timely delivery and excellence in manufacturing. All of the seat belt manufacturer's major
marketing efforts should emphasize this positioning in the marketplace.

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Positioning Statement

A positioning statement is a short sentence or phrase that conveys the essence of the differentiation
and positioning strategies and is developed after these have been set. This statement is used as a
marketing tool by which to judge all marketing materials to see if they are in keeping with the
strategies. A positioning statement for the seat belt manufacturer might be, "On-time delivery and
flawless manufacturing." This statement can, though it does not have to, appear in all of the seat belt
manufacturer's marketing materials. Rather, it is often used as a check to make sure all marketing
materials produced convey the essence of how the product is differentiated and positioned against
competitors.

Relationships among the Three

Product differentiation, positioning and positioning statements go together one after the other. Once
you have decided how best to differentiate your product based on customer needs and wants, the next
step is to determine how to position it in the marketplace. The positioning statement then follows the
positioning strategy.

The Importance of Imagination

Successful differentiation and positioning strategies depend on an imaginative approach to the

marketplace. For example, if you are a tennis racket manufacturer making high-performance rackets
for the serious tennis player, you might consider opening up an entirely new market segment. This
might be the creation of high-performance rackets for the average player, who can then benefit from
the technology previously only offered to pros.

 The generic approaches to strategic analysis

The small business owner's challenge is to create products and services the customer values and the
means to produce and deliver those products and services in ways that are exceptional compared to
the competition. To address these challenges, a company must define business objectives and address
operational issues based on its current situation and the factors that impact its financial and
operational goals. Such decision-making processes are frequently supported by structured
brainstorming, which, in turn, can be supported by a Strengths, Weaknesses, Opportunities and
Threats (SWOT) analysis. The advantages of the SWOT methodology, such as its appropriateness to
address a variety of business issues, make it a desirable tool to support some brainstorming sessions.
However, the tool's disadvantages, such as the subjective analysis of an issue, make it less desirable
for others.

SWOT Analysis Application

The SWOT method is not a process in itself, such as strategic planning, opportunity analysis or
competitive analysis. Instead it's a tool used to structure a particular brainstorming session. As a
result, a problem or process that's addressed using the SWOT tool may itself be thought of in terms of
phases or a life cycle. For example, strategic planning is a process consisting of multiple steps or
phases. However, the SWOT analysis, like a brainstorming session, is simply a tool that may be used
one or more times to gain a collection of ideas regarding a particular issue or problem. For example, a
business determines on each occasion, if a brainstorming session is appropriate to address a strategic
plan or competitive analysis. If so, the business then decides if it will use the SWOT method or an
alternative tool to facilitate the session.

Advantage: Problem Domain

SWOT analysis can be applied to an organization, organizational unit, individual or team. In addition,
the analysis can support a number of project objectives. For example, the SWOT method can be used
to evaluate a product or brand, an acquisition or partnership, or the outsourcing of a business function.
In addition, SWOT analysis can be beneficial in evaluating a particular supply source, a business
process, a product market or the implementation of a particular technology.

17
Advantage: Application Neutrality

SWOT analysis is conducted by specifying an objective and conducting a brainstorming session to

identify internal and external factors that are favorable and unfavorable to the objective's
achievement. This approach remains the same whether the analysis is used to support strategic
planning, opportunity analysis, competitive analysis, business development or product development
processes.

Advantage: Multi-Level Analysis

Valuable information about your objective's chances can be gained by viewing each of the four
elements of the SWOT analysis -- strengths, weaknesses, opportunities and threats -- independently or
in combination. For example, identified threats in the business environment, such as new government
regulations regarding a product design or the introduction of competing products, might alert the
business owner that a proposed investment in a new manufacturing production line should be more
carefully evaluated. In addition, an awareness of a company weakness such as a lack of qualified
employees might suggest a need to consider outsourcing particular functions. In turn, opportunities
such as the availability of low-interest loans for startups might encourage the entrepreneur to pursue
the development of a new product to meet a rising customer demand. In contrast, identified strengths,
such as extensive experience in an industry experiencing rapid international growth, might suggest the
need to partner with foreign companies.

Advantage: Data Integration

SWOT analysis requires that quantitative and qualitative information from a number of sources be
combined. Access to a range of data from multiple sources improves enterprise-level planning and
policy-making, enhances decision-making, improves communication and helps to coordinate
operations.

Advantage: Simplicity

SWOT analysis requires neither technical skills nor training. Instead, it can be performed by anyone
with knowledge about the business in question and the industry in which it operates. The process
involves a facilitated brainstorming session during which the four dimensions of the SWOT analysis are
discussed. As a result, individual participants’ beliefs and judgments are aggregated into collective
judgments endorsed by the group as a whole. In this way, the knowledge of each individual becomes
the knowledge of the group.

Advantage: Cost

Because SWOT analysis requires neither technical skills nor training, a company can select a staff
member to conduct the analysis rather than hire an external consultant. In addition, SWOT is a
somewhat simple method that can be performed in a fairly short time.

Disadvantage: No Weighting Factors

SWOT analysis leads to four individual lists of strengths, weaknesses, opportunities and threats.
However, the tool provides no mechanism to rank the significance of one factor versus another within
any list. As a result, any one factor's true impact on the objective can't be determined.

Disadvantage: Ambiguity

SWOT analysis creates a one-dimensional model in which each problem attribute is viewed as a
strength, weakness, opportunity or threat. As a result, each attribute is seen to have only one
influence on the problem being analyzed. However, one factor might be both a strength and a
weakness. For example, locating a chain of stores on well-traveled streets that grant easy access to
customers might be reflected in increased sales. However, the costs of operating high-visibility facilities
can make it difficult to compete on price without a large sales volume.

Disadvantage: Subjective Analysis

18
To significantly impact company performance, business decisions must be based on reliable, relevant
and comparable data. However, SWOT data collection and analysis entail a subjective process that
reflects the bias of the individuals who collect the data and participate in the brainstorming session. In
addition, the data input to the SWOT analysis can become outdated fairly quickly.

Q.7 Briefly explain the important steps of strategic management process. (20)

In business, your strategic perspective determines how your company views and solves important
issues. Putting the word "strategic" before the word "perspective" indicates a tactical, carefully
formulated approach. Say your business discusses withdrawing from a certain market. Your staff
discusses the possibilities. But, if you discuss a market withdrawal from a strategic perspective, you
will consider the possibilities in light of your predetermined business objectives. You exercise an
enlightened process, exploring how the withdrawal affects your business's priorities.

Why a Stronger Strategic Perspective Is Needed

Understanding the significance of a business's strategic perspective invariably encourages business

leaders to create a stronger strategic perspective in hopes of making better decisions. Carefully
consider the past, present and future of your business objectives. Once senior management clearly
envisions its goals and objectives, it makes better decisions in all areas. This can be applied to many
aspects of decision making. But, staying with the marketing example for now, establishing clear goals
allows effective, profitable marketing decisions -- for developing a branding strategy, generating
growth and other key issues. All decisions are viewed within the perspective of your most important
goals.

The Strategic Thinking Process

A strategic perspective, formulated by strategic thinkers, puts information into its proper context so it
resonates with insight that is relevant to the business's objectives. With the proper perspectives,
business analysis results in sometimes-powerful conclusions. Because a business often has many goals
and objectives, thinking from a strategic perspective takes all the goals into account, meaning the
strategic thinker must consider multiple perspectives. He must juggle objectives of all sorts -- not just
a single, overriding objective.

Organization by (Jaunch and Glueck, 1988)

Organizations are open systems that cannot exist and sustain themselves on their own. They must
continually interact with the environment and hence a relationship exists. The linkage between the
organization and the environment is the strategy Jaunch and Glueck, 1988). A number of
commentators have identified the dynamics of turbulence of the business environment as a key issue
affecting the processes of strategic thinking, planning, managing and decision making. Among them is
Igor Ansoff (1984) whose research concluded that organizations which fail to match their approach to
strategic management with the level of turbulence in the environment suffered business failure in the
proportion to the mismatch. Strategic response is the set of decisions and actions that result in the
formulation and implementation of plans designed to achieve a firm’s objectives Jaunch and Glueck,
1988). It is therefore a reaction to what is happening in the environment of the organizations. The
environment is rapidly changing making it imperative for organizations to continually adapt their
activities to succeed. To survive in a dynamic environment, their strategies need to focus on their
customers and deal with emerging environmental challenges. This is necessary because organizations
are environmental serving Jaunch and Glueck, 1988). Identifying the different strategic options is fairly
routine; the hard part is deciding which strategy option best fits the firm’s overall situation and, most
particularly, its industry environment and competitive position Jaunch and Glueck, 1988). Commenting
further on this subject, Jaunch and Glueck, 1988) state three analytical steps that influence strategic
response. The first analytical step is to diagnose the industry environment and the firm’s competitive
standing in the industry. The second step is to choose which of the three generic competitive
approaches to build the firm’s strategy around, that is, low cost producer becoming a cost leader,
differentiation or focus on selected market segments. The final step is to customer - 3 - tailor the
chosen generic approaches to fit both the industry and the firm’s standing vis-à-vis competitors.

19
Perspective

Visualize a square drawn on a piece of paper. If an artist added a few more strokes to the page, the
square becomes a cube. Suddenly, it has depth, height and width as viewed from a certain vantage
point. As a business makes decisions, it has to do more than crunch numbers. Strategic perspectives
view a challenge in such a way that succeeds in reaching business goals. Viewing business challenges
from multiple perspectives allows the decision maker choices in light of the way each optional solution
relates to the next when viewed side-by-side -- like two-dimensional cubes.

Digital Intelligence Perspective

In the world of business, a useful perspective requires good information. Since the 1950s, it has been a
commonly held strategy to gather information about your own business and about your competitors.
As the Business Centure website states, the way we gather information about our business and its
competitors today has moved to digitally interactive, customer-driven sources such as social media.
Business Centure predicts that with customer input from social media, the business's customers will
increasingly drive business decision making. A wise business today will not ignore customers with such
a public platform. Therefore, one strategic perspective for many businesses is the digital intelligence
perspective.

Good strategies generally pique the interest of corporate managers, especially if rivals have
successfully used them to gain market share or woo customers. However, experienced corporate
leaders may not flock to time-honored tactics without first analyzing the specifics of their businesses.
Strategic planning and organizational design are important topics that top leadership discusses in
business-management meetings.

Strategic Planning

Strategic planning deals with how an organization comes up with a strategy, allocates appropriate
resources to pursue it and makes effective decisions to pursue the action plan -- depending on internal
factors and external considerations. It looks at various work streams, from the way the firm
manufactures its products to how it manages talent processes. A key ingredient in strategic planning, a
talent process involves everything in the employee life cycle -- that is, from recruiting through
performance evaluation and management, compensation and succession planning.

Relevance

Strategy consultants know that businesses evolve in response to an array of forces. That's why they
often advise companies to chart a multi-dimensional strategy that covers not only core operating
needs, such as financial management as well as sales and marketing, but also non-operating
processes. Strategic planning helps a company address the relentless demands of the marketplace,
which run the gamut from customer needs and regulatory pressures to economics and rivals' moves.

Organizational Design

Organizational design attempts to align -- or realign -- a company's hierarchical structure, processes

and performance metrics with its commercial strategy. In a competitive landscape replete with
constant changes, a company must redesign its structure to adapt to current conditions and dodge
competitors' strategic bullets. To ensure that a newly introduced corporate design is a success, top
leadership focuses on specific issues. These include personal motivation and behavior, business
functions, geographical areas where the firm conducts business, product strategies and customer
tactics.

Importance

A cloud of uneasiness may emerge in the investment community if a firm has a good strategy but
cannot implement it. This may happen if investors believe the business doesn't have the proper
structure to execute its strategy and make the changes necessary for success. Without investor
money, the firm may be unable to reach its full potential, commercially speaking. To dissipate the
plume of investor discontent, corporate management can show external financiers the organizational-
design plan they've come up with and tell them how the blueprint will lead to profitability.

20
Connection

A company engages in strategic planning and organizational design to prevent market forces from
bringing its operations to a halt. Although both concepts are distinct, corporate management combines
them when making strategic, long-term decisions. Adequate planning helps the business put short-
term successes into perspective, focusing instead on long-term goals.

Types of managerial activity

Effective management and leadership involve creative problem solving, motivating employees and
making sure the organization accomplishes objectives and goals. There are five functions of
management and leadership: planning, organizing, staffing, coordinating and controlling. These
functions separate the management process from other business functions such as marketing,
accounting and finance.

Planning

The planning function of management controls all the planning that allows the organization to run
smoothly. Planning involves defining a goal and determining the most effective course of action needed
to reach that goal. Typically, planning involves flexibility, as the planner must coordinate with all levels
of management and leadership in the organization. Planning also involves knowledge of the company’s
resources and the future objectives of the business.

Organizing

The organizing function of leadership controls the overall structure of the company. The organizational
structure is the foundation of a company; without this structure, the day-to-day operation of the
business becomes difficult and unsuccessful. Organizing involves designating tasks and responsibilities
to employees with the specific skill sets needed to complete the tasks. Organizing also involves
developing the organizational structure and chain of command within the company.

Staffing

The staffing function of management controls all recruitment and personnel needs of the organization.
The main purpose of staffing is to hire the right people for the right jobs to achieve the objectives of
the organization. Staffing involves more than just recruitment; staffing also encompasses training and
development, performance appraisals, promotions and transfers. Without the staffing function, the
business would fail because the business would not be properly staffed to meet its goals.

Coordinating

The coordinating function of leadership controls all the organizing, planning and staffing activities of
the company and ensures all activities function together for the good of the organization. Coordinating
typically takes place in meetings and other planning sessions with the department heads of the
company to ensure all departments are on the same page in terms of objectives and goals.
Coordinating involves communication, supervision and direction by management.

Controlling

The controlling function of management is useful for ensuring all other functions of the organization are
in place and are operating successfully. Controlling involves establishing performance standards and
monitoring the output of employees to ensure each employee’s performance meets those standards.
The controlling process often leads to the identification of situations and problems that need to be
addressed by creating new performance standards. The level of performance affects the success of all
aspects of the organization.

Q. 8 Discuss the role of effective environment scanning in setting process. (20)

Strategies are guidelines for deciding the appropriate actions for attaining the organization's goals. The
essential difference between strategic planning and management control is that the strategic planning
process is unsystematic.

21
Strategic control occurs in three ways. First, strategic planning is itself a form of control. Second,
strategic plans are converted into reality not only by their influence on the management control activity
but also by the key decisions regarding allocation of resources.

Third, while capital budgeting systems can respond to requests for resources that are consistent with
the accepted strategic plan, the period between formal, comprehensive strategic planning exercises
can give rise to unanticipated changes in the environment or unexpected internal crises.

Anthony views management planning and control as the processes by which (1) organizational
objectives are achieved and (2) the use of resources is made effective and efficient.

"Management control is the process by which managers influence other members of the
organization to implement the organization's strategies."

Management control decisions are made within the guidance established by strategic planning.
Management control is a systematic process. It is done by managers at all levels; it is done on regular
basis; it involves the whole organization; and it involves a large amount of personal interaction and
relatively less judgment.

There are two somewhat different types of management control activities: (1) the management control
of operating activities, and (2) the control of operational projects.

Process for operating activities has four phases: programming, budget preparation, execution, and
evaluation.

Programming is the process of deciding on the major programs that the organization will undertake
to implement its strategies and the approximate amount of resources that will be devoted to each.

Budget preparation. An operating budget is the organization's financial plan for a specific period,
usually one year.

Execution and evaluation. During the year managers execute the program or part of a program for
which they are responsible. Reports on responsibility centers show both budgeted and actual
information. They are used as a basis for control. The process of evaluation is a comparison of actual
amounts with the amounts that should be expected of actual circumstances.

A projects is a set of activities intended to accomplish a specified end result of sufficient importance to
be of interest to management (for example: construction projects, research/development projects, and
motion picture productions).

In a project, and in each of its components, the focus is on three aspects: (1) its scope (that is, the
specifications for the end product), (2) its schedule (that is, the time required), and (3) its cost.

In actual operations, project managers engage in both planning activities and control activities. They
control when they act to improve effectiveness and efficiency.

Anthony views this third category of organizational planning and control as (1) focusing on specific,
discrete tasks and (2) the process of ensuring that those tasks are done effectively and efficiently.

"Task control is the process of ensuring that specific tasks are carried out effectively and
efficiently."

As the definition suggests, the focus of operational control is on individual tasks or transaction:
scheduling and controlling individual jobs through a shop, as contrasted with measuring the
performance of the shop as a whole; procuring specific items for inventory, as contrasted with
management of inventory as whole: and so on.

Task control is distinguished from management control in the following ways:

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  The management control system is basically of similar throughout the organization. Each type
task requires a different task control system.
 In management control, managers interact with other managers; in task control either humans
are not involved at all, or the interaction is between a manager and a nonmanager.
 In management control the focus is on organizational units called responsibility centers; in task
control the focus is on specific tasks.
 Management control relates to activities that are not specified; task control relates to specified
tasks.
 In management control the focus is equally on planning and on execution; in task control it is
primarily on execution.

An essential characteristic of the process is that the "standard" against which actual performance is
measured is consistent with the organization's strategies. Exhibit 6-3 outlines differences among the
three types of processes with respect to the nature of the problems that typically are addressed in each
process and the types of decisions that are relevant for these problems.

As another way of explaining the differences among the three processes, Exhibit 6-4 gives some
examples of activities associated with each.

Most commentators would agree with the definition of strategic control offered by Schendel and Hofer:

"Strategic control focuses on the dual questions of whether: (1) the strategy is being
implemented as planned; and (2) the results produced by the strategy are those intended."

This definition refers to the traditional review and feedback stages which constitutes the last step in the
strategic management process. Normative models of the strategic management process have depicted
it as including there primary stages: strategy formulation, strategy implementation, and strategy
evaluation (control).

Strategy evaluations concerned primarily with traditional controls processes which involves the review
and feedback of performance to determine if plans, strategies, and objectives are being achieved, with
the resulting information being used to solve problems or take corrective actions.

Recent conceptual contributors to the strategic control literature have argued for anticipatory
feedforward controls, that recognize a rapidly changing and uncertain external environment.

Schreyogg and Steinmann (1987) have made a preliminary effort, in developing new system to
operate on a continuous basis, checking and critically evaluating assumptions, strategies and results.
They refer to strategic control as "the critical evaluation of plans, activities, and results, thereby
providing information for the future action".

Schreyogg and Steinmann based on the shortcomings of feedback-control. Two central characteristics
if this feedback control is highly questionable for control purposes in strategic management:
(a) feedback control is post-action control and (b) standards are taken for granted.

Schreyogg and Steinmann proposed an alternative to the classical feedback model of control: a 3-step
model of strategic control which includes premise control, implementation control, and strategic
surveillance. Pearce and Robinson extended this model and added a component "special alert
control" to deal specifically with low probability, high impact threatening events.

The nature of these four strategic controls is summarized in Figure 6-4. Time (t ) marks the point
where strategy formulation starts. Premise control is established at the point in time of initial premising
(t ). From here on promise control accompanies all further selective steps of premising in planning and
implementing the strategy. The strategic surveillance of emerging events parallels the strategic
management process and runs continuously from time (t ) through (t ). When strategy implementation
begins (t ), the third control device, implementation controlis put into action and run through the end
of the planning cycle (t ). Special alert controls are conducted over the entire planning cycle.

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Planning premises/assumptions are established early on in the strategic planning process and act as a
basis for formulating strategies.

"Premise control has been designed to check systematically and continuously whether or
not the premises set during the planning and implementation process are still valid.

It involves the checking of environmental conditions. Premises are primarily concerned with two types
of factors:

 Environmental factors (for example, inflation, technology, interest rates, regulation, and
demographic/social changes).
 Industry factors (for example, competitors, suppliers, substitutes, and barriers to entry).

All premises may not require the same amount of control. Therefore, managers must select those
premises and variables that (a)are likely to change and (b) would a major impact on the company and
its strategy if the did.

Q. 9 How nature of strategy varies as we move to different hierarchical levels in an

organization. (20)

The strategic profit model, another name for the DuPont Equation, provides one method for calculating
the return on equity. Return on equity refers to a business’s profit relative to shareholder equity or, put
another way -- the effectiveness of the business at turning assets and investments into profit. The
strategic profit model employs three key components: profit margin, asset turnover and leverage.

Profit Margin

The first key component of the strategic profit model is profit margin. Determine profit margin by
subtracting total costs, such as materials, from the total sales to arrive at net income. Then divide your
net income by your sales revenue to arrive at a percentage. That percentage represents your net profit
margin. For example, say your company achieved $1.5 million in sales last year with total costs of $1
million. Your net income equals $1.5 million minus $1 million, or $500,000. Dividing that figure by $1.5
million leaves you with a profit margin of approximately 33 percent. Higher profit margins result in
higher return on equity.

Asset Turnover

The second key component, asset turnover, measures a business’s efficiency at creating revenue from
its assets. Calculate asset turnover by taking your sales revenue and dividing it by your total assets.
Say your company generates $1.2 million in sales with $4.6 million in assets. You divide $1.2 million
by $4.6 million to determine your asset turnover hovers around 26 percent. If asset turnover
decreases, the return on equity decreases.

Leverage

Leverage represents the final component of the strategic profit model. In essence, leverage refers to
the debt-to-equity ratio, or how much debt you take on relative to your business’s equity. Calculate
leverage by taking your total liabilities, such as mortgages and revolving lines of credit, and dividing
them by your total equity. If your business’s total liabilities equal $2.2 million and your business’s total
equity is $5.9 million, you wind up with leverage around 37 percent.

Return on Equity

Determine return on equity by multiplying your net profit margin, asset turnover and leverage. If your
company holds a 36 percent profit margin, a 40 percent asset turnover and 37 percent leverage, you
end up with a return on equity of approximately 5 percent. A return on equity of approximately 10
percent to 12 percent represents the norm.

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Other Considerations

The strategic profit model lends itself to a visual format, making it an excellent tool for demonstrating
how changes in profit margins, leverage or asset turnover impact the business. It also provides a
simple way to see and evaluate changes over time. The strategic business model suffers from the
problem that the results only prove as reliable as the original data. If your business does not maintain
accurate records, the numbers you get from the calculations provide little value.

Competitive Advantage

A competitive advantage is one gained over competitors by offering consumers better value. You
increase value by lowering prices or increasing benefits and services to justify the higher price.
Differentiation and cost leadership strategies search for competitive advantage on a broad scale, while
focus strategies work in a narrow market. Sometimes, businesses look for a combination strategy to
please customers looking for multiple factors such as quality, style, convenience and price.

Cost Leadership Strategy

To practice cost leadership, organizations compete for the largest number of customers through price.
Cost leadership works well when the goods or services are standardized. That way, the company can
sell generic acceptable goods at the lowest prices. They can minimize costs to the company in order to
minimize costs to the customer without decreasing profits. A company either sells its goods at average
industry prices to earn higher profits than its competitors or it sells at below-industry prices, trying to
profit by gaining the market share. Wal-Mart is an example of a company with a cost leadership
strategy.

Differentiation Strategy

Differentiation strategy calls for a company to provide a product or service with distinctive qualities
valued by customers. You draw customers because you set yourself apart from the competition. To
succeed at this strategy, your business should have access to leading scientific research (or perform
this research); a highly skilled and creative product development team; a strong sales and marketing
team; and a corporate reputation for quality and innovation. Apple, for example, uses differentiation
strategy.

Focus Strategy

Focus strategy is just what it sounds like: concentrate on a particular customer, product line,
geographical area, market niche, etc. The idea is to serve a limited group of customers better than
your competitors who serve a broader range of customers. A focus strategy works well for small but
aggressive businesses. Specifically, companies that do not have the ability or resources to engage in a
nationwide marketing effort will benefit from a focus strategy. Focus can be based on cost or
differentiation strategy. It involves focusing the cost leadership or differentiation on a small scale. The
idea is to make your company stand out within a specific market sector.

Integrated Cost Leadership-Differentiation Strategy

Companies that integrate strategies rather than relying on a single generic strategy are able to adapt
quickly and learn new technologies. The products produced under the integrated cost leadership-
differentiation strategy are less distinctive than differentiators and costs are not as low as the cost-
leader, but they combine the advantages of both approaches. A somewhat distinctive product that is
mid-range-priced can be a bigger draw to customers than a cheap generic product or an expensive
special one.

Q. 10 It is very necessary to have strategy in line with the Mission. Comment with
arguments. (20)

Most business owners want to make wise decisions, but they sometimes are at a loss of where to
begin. This is where strategic management comes into play. An important concept for business owners
and managers to grasp, strategic management entails evaluating business goals, objectives and plans
in light of your company focus on effectiveness and efficiency.

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Defining Strategic Management

Strategic management is an oft-used and sometimes ill-understood concept in business. It helps to

consider the two words separately first. Strategies are the initiatives a company takes to maximize its
resources and to grow its business. This might involve financial planning, human resources
management or focusing on a mission statement. Management is the process of operating the business
on a day-to-day basis and planning for future success. When you put the two words together, strategic
management is about driving the company's growth through effective management techniques focused
on goal-setting.

Corporate Governance

An effective organization is often one that has initiated programs and services within its structure that
ensure open communication, good management and effective leadership. Without these hallmarks of
corporate governance, it is difficult to manage strategically because the basic framework of goal-
setting and decision-making are missing. Setting up a control and reporting mechanism is also
important to strategic management as part of a wider corporate governance push. This allows the
organization to make changes when they are needed to constantly monitor its own progress.

Core Competencies

Strategic management can help your business to identify and capitalize on its core competencies --
things within your business that you do best. As Edward Russell-Walling notes in his book "50
Management Ideas You Really Need to Know," a core competency has three key factors: it is not easy
for competitors to duplicate, your business can use it in a number of different products or services and
it provides a benefit to your customers. For some companies, a core competency is the brand name:
People buy the products simply because they carry the organization's name, which is associated with
quality and prestige. For others, the core competency might be the cost of production. Whatever your
core competencies are, Russell-Walling is quick to note that most companies only have a few. If you
think your business has strengths in multiple areas, it's important to get at the root of what causes
these successes.

Setting Goals

Strategic management is vitally important even on the small scale within a business. However,
strategic management is difficult to accomplish without a clearly defined set of goals for the business'
operation. Knowing what your core competencies are is good from the standpoint of understanding
your strengths in the marketplace, but this also helps you to identify areas for improvement and set
goals and objectives based on those weaknesses. If you know, for instance, that your business is
lagging behind in utilizing the power of the Internet to sell its products, one of your goals can be to
introduce an online trading platform within the next six months. Importantly, the goals your business
sets should be measurable, specific and have a time frame attached to them. Setting goals in this way
helps you to strategically position your business for future success.

Strategic planning provides a road map to help your business get from where you are now to where
you want to be. Milestones are expressed in specific terms, as quantifiable objectives that measure
whether you're proceeding as planned and, if not, how far you've gone off path.

Long-Term Objectives

Long-term strategic objectives help you think in terms of big picture goals and overarching visions. The
farther in the future you're planning, the more difficult it is to set specific goals. You may project an
intention to open five stores in the next ten years without knowing what the real estate market or
demand for your product will look like that far into the future. This objective can still be useful because
it provides a general time frame, a schedule and a plan for ongoing growth. It will still be relevant,
even if you only open four stores in five years. Long-term objectives provide distant milestones that
help you orient your shorter term decisions. For example, if you plan to eventually open five stores,
you can build supply chain relationships based on your intention of eventually doing considerably more
business with these suppliers. Or, you may approach your branding as an effort that will start off small
but build on memes and themes over time.

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Short-Term Objectives

Align the short-term objectives in your strategic plan with your longer term goals. This syncing allows
you to make incremental steps while also proceeding in a clear direction. If you plan to open five stores
in ten years, you'll need to open them one by one, and the opening nearest at hand is your most
urgent goal. It's easier to be specific with shorter term objectives, and the more specific you are, the
better able you'll be to assess your progress. If you plan to open your next store in two years, you can
base your timeline on this objective, making plans to finalize your lease and financing in six months,
complete major construction after a year and half, and spend the final six months on finishing work,
furnishing, collecting inventory and training your staff.

Strategic Planning as a Team

Strategic planning is an important tool for bringing your team together and motivating them to work in
tandem. If your managers and staff know the company's short- and long-term goals, it's easier to stay
on task and rein in projects and individuals when they're veering off track. Strategic objectives provide
a shared sense of purpose, a shared language to gauge progress. They also provide milestones to
celebrate, once they have been achieved.

Strategic management lays out goals and objectives for pursuing a company's mission. Your small
business, from Day One, has had a strategic manager--you. If you have added managers since then,
they are most likely involved in finding strategies to help your business succeed. One of those
strategies may involve becoming more efficient. As the owner, you must weigh the balance between
management actions that are efficient and those that are effective for your small business.

Management Efficiency

Strategic management decisions that promote efficiency tend to be aimed at reducing the use of
resources through maximizing return. Any action taken to reduce inventory waste, for example, would
be a strategic management decision aimed at greater efficiency. Efforts to increase productivity would
be included in this category. Another strategic management decision that would be efficiency-oriented
would be having executives share an executive assistant, rather than hiring executive assistants for
each executive.

Management Effectiveness

Management effectiveness can be measured by results. Goals such as increasing market share,
improving customer satisfaction ratings and achieving desired revenue levels come under the heading
of management effectiveness. This is how you measure whether management decisions are actually
improving your business performance. For every decision that strategic managers make, you need to
set a date in the future when you will measure the effectiveness of those decisions. Better yet, tell
your managers to bring you data to show the effectiveness of their decisions.

Which is Best

You should look at all of your strategic management decisions and determine whether they are aimed
at effectiveness or efficiency. The reason you should do this is because most management metrics are
skewed toward efficiency. Because of this, you can forget to include management efforts designed to
show effectiveness. In practice, you need both types of strategic management decisions. Strive for a
balance between the two. That doesn't mean you need a 50/50 balance, but you should make sure you
don't have a 90/10 ratio.

Goals vs. Objectives

Goals are the long-term achievements you have planned. Objectives are the short-term steps to your
goals. Strategic management decisions aimed at being effective tend to be goal-oriented. That is, they
are considerations for the long haul. Efficiency measures tend to be about reaching objectives or short-
term improvements. You must make sure your objectives align with your goals. Another way of saying
this is that strategic managers must make sure they pursue efficiency in the name of effectiveness.
Otherwise your small business may be moving in conflicting directions.

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Q.11 Select different industries and identify the similarities and differences between
them, for example, contrast and compare them bye the type and no. of competeties,
industry structure number and verity of their products, entry and exit barriers, distribution
and supply chain, extent of horizontal and vertical integration etc. you can give your answer
in tabular, matrices , model and other creative understandable form.

"If you don't know where you're going, any road will take you there." These lyrics to George Harrison's
song "Any Road" are as true in business as in any other walk of life. Managers must define and
communicate a clear strategy if the company is to be successful. Vision and mission statements
summarize a company's business strategy in a form that can be communicated and understood easily
by stakeholders.

Vision Statement

A vision statement sets out a company's long-term goals and aspirations clearly and concisely. A vision
statement is intended to inspire and motivate the company's workforce by providing a picture of where
the organization is heading. It also provides a reality check for managers, who can compare their
strategic objectives and operational plans to the vision statement. If a planned course of action doesn't
move the company toward its vision, it may need to be revised.

Mission Statement

A mission statement defines the business sector in which a company operates and sets out its key
purpose. It summarizes what the company does and why. It also sets out how the company conducts
its business and identifies key stakeholders, such as shareholders, customers and employees. A
mission statement helps employees understand where their contribution fits into the company's
objectives. It also helps other stakeholders decide whether they want to do business with the
organization.

Strategic Management Process

The development of vision and mission statements is an essential part of the strategic management
process. Having clearly defined the vision and mission of the organization, managers then can set
strategic objectives that are aligned with the company's long-term goals. Managers translate these
strategic objectives into an operational strategy that can be implemented, monitored and evaluated.
The outcome of the evaluation will determine whether any revision of the vision statement, mission
statement, objectives or operational strategy is required.

Alignment

Well-written vision and mission statements ensure that each element of the strategic management
process is aligned to the company's long-term goals. Managers use clear and concise vision and
mission statements to communicate their aspirations to stakeholders. Employees understand where to
focus their efforts if they align their daily work with the vision and mission. Clear vision and mission
statements allow customers, suppliers and shareholders to choose whether or not they want to do
business with the company.

Mission Statement Purpose

A company's mission statement is essentially its statement of purpose. It serves as a guide for all of
the company's decision-making. Shareholders, leaders and employees are generally the target of the
mission. It should help workers within the organization know what decisions and tasks best align with
the mission of the company. A mission statement offers insight into what company leaders view as the
primary purpose for being in business. Some companies have profit-motivated missions, while others
make customers a focal point. Other firms use a mission to point out more altruistic intentions that
ultimately lead to profits.

Relationship to Organizational Strategy

Strategic planning is the process of developing company objectives, strategies and tactics to achieve
the mission of the organization. The company generates short and long-term objectives using the
mission statement. Objectives may include market-share targets, revenue or profit goals, customer
28
satisfaction scores and improved brand awareness. Next, it develops strategies to accomplish
objectives. For instance, better training and monitoring of feedback scores are strategies to achieve
higher customer satisfaction. Actionable steps or tactics are then developed. Hiring an outside training
consultant for a series of service training sessions is a tactic tied to the customer satisfaction goal and
the training strategy.

Vision Statement Purpose

Vision statements are sometimes confused or used synonymously with mission statements. However,
vision statements should offer more of a direction and include a perspective of corporate values. A
vision might provide a direction for the company for the next five to 10 years, while also noting a
commitment to integrity, transparency, openness and other such values. "Mind tools," indicates that a
vision statement takes your mission and adds an element of human values. It should inspire
employees and given them a sense of purpose.
Example

On its website, pharmaceutical company Merck includes product, customer, employee and investor
interests in its mission statement. It effectively conveys intentions to deliver desired results to each
entity. Its vision statement goes into more details about the company's values and includes the phrase
"make a difference in the lives of people." This phrase ultimately means that the company makes
helping the world with medicine a higher priority than profits in its organizational strategy. The
company's vision also notes a desire to be the best health care company in the world.

Critical success factors (CSFs) define key areas of performance that are essential for an organization to
accomplish its mission, whether that mission is to implement new software, complete a project or
define an organizational mission statement. When correctly targeted, CSFs allow stakeholders to track
the success of the mission. They vary based on the type of project, industry, product and overall
business model or strategy under which the project operates.

Software Implementations

Implementing a new software application can be a costly and resource-intensive proposition. A

strategy for the implementation should be clearly defined, with the metrics to measure success
concisely documented and measured before and throughout the project. Some common CSFs in
strategic software implementation can include metrics regarding end user support, training and
software uptime. CSFs should also measure criteria specific to the type of software. For example, if
implementing a new accounting program, measure if the program is fulfilling business requirements. If
the program should reduce the amount of time to record accounts receivable, then a CSF would be
time invested in that specific activity.

Project Management

Projects have a defined beginning and termination date, or at least criteria to determine when the
project is completed. Measuring the success of a project can be as simple as determining if the project
was completed on schedule, on time and within budget. CSFs for a project, however, are specific to the
goals of that particular project. They are the unique variables that are the essential elements for the
project to achieve success.

Mission Statements

A business must perform well in key areas that differentiate it from competitors to achieve its mission.
These key areas are unique to the organization and the industry in which it competes. For example, if a
company's mission is to serve fresh, organic orange juice, then CSFs would include measurements on
the amount of preservatives needed, times to get juice from the farm into the hands of customers or
tracking of the use of pesticides.

Product Strategy

When implemented correctly, CSFs will drive a product's strategy forward. For example, if a product's
goal is to allow a runner's feet to stay dry during long runs, then a critical success factor would apply
metrics to measuring the dryness of athletes' feet after runs of varying lengths. The CSF will keep the
vision of the product at the forefront.
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Strategic Direction Importance

A strategic direction is one of the most important forces in a business. It establishes the structure for
internal responsibilities that each department and worker takes on. A clear vision allows each worker to
know the company's purpose and objectives. Strategies and tactics allow each worker to understand
the part he plays in contributing to the achievement of the vision and objectives.

Resources and Evaluation

Allocation of resources and ongoing evaluation of progress toward strategic objectives are key features
of a well-directed company. Employees need the right equipment, tools and training to carry out their
assigned roles. Managers need adequate budgets and authority to direct and motivate the work of
subordinates. Evaluation of company, department and employee goals allows you to monitor and
adjust any facet of the business that isn't moving toward the right targets. Possible changes that result
from ongoing assessment include tactical adjustments and more training.

Objective Considerations

To establish a business objective, a company must first understand its current situation and
marketplace in relationship to where it started. It then establishes goals and objectives and the means
to attain them. Companies generally create a strategic plan that analyzes these factors and lays the
groundwork for its goals. All members and divisions of the organization are taken into account during
planning. This also allows the company to realize where it can cut costs and areas where it can
improve operations.

Goal Setting Misconceptions

Business objectives are tools that also require the awareness of the marketplace's evolution and how
that can affect the company's overall plans. No organization can foresee future events and issues that
arise outside of its control, such as an economy recession, for example. This is where innovation and
modification have become commonplace practices when establishing goals and objectives. Companies
must assume a certain amount of risk in the undertaken venture and be prepared for setbacks that
may occur. These events are worked into the timeline and cost of a company's goals and objectives by
defining its contingency plans.

Q. 12 How nature of strategy changes in different phases of product life cycle? Explain with
the help of examples. (20)

Organizational structure is the framework companies use to outline their authority and communication
processes. The framework usually includes policies, rules and responsibilities for each individual in the
organization. Several factors affect the organizational structure of a company. These factors can be
internal or external. Small business owners must be responsible for creating their companies
organizational structure framework. Business owners may use a management consultant or review
information from the Small Business Administration before setting up their organizational structure.

Size

Size is many times the driving factor for a company organizational structure. Smaller or home-based
businesses do not usually have a vast structure because the business owner is usually responsible for
all tasks. Larger business organizations usually require a more intense framework for their
organizational structure. Companies with more employees usually require more managers for
supervising these individuals. Highly specialized business operations can also require a more formal
organizational structure.

Product Life Cycle

The company life cycle also plays an important part in the development of an organizational structure.
Business owners attempting to grow and expand their company operations usually develop an
organizational structure to outline their company business mission and goals. Businesses reaching peak
performance usually become more mechanical in their organizational structure. This occurs as the
chain of command increases from the business owner down to frontline employees. Mature companies
30
usually focus on developing an organizational structure to improve efficiency and profitability. These
improvements may be the result of more competitors entering the economic marketplace.

Strategy

Business strategies can also be a factor in a company organizational structure development. High-
growth companies usually have smaller organizational structures so they can react to changes in the
business environment quicker than other companies. Business owners may also be reluctant to give up
managerial control in business operations. Small businesses still looking to define their business
strategy often delay creating an organizational structure. Business owners are usually more interested
in setting business strategies rather than developing and implementing an internal business structure.

Business Environment

The external business environment can also play an important part in a company organizational
structure. Dynamic environments with constantly changing consumer desires or behavior is often more
turbulent than stable environments. Companies attempting to meet consumer demand can struggle
when creating an organizational structure in a dynamic environment. More time and capital can also be
spent in dynamic environments attending to create and organizational structure. This additional capital
is usually a negative expense for many small businesses.

A business, like a person, goes through predictable stages in its life -- from birth to early growth, to
maturity and eventually decline. At each stage in the corporate life cycle different strategies are
required to maximize results and ensure success. Whether struggling to make an entry into an
established market as a new business or working hard to remain viable during the latter part of the
business's life, successful businesspeople will learn to navigate the various stages in a corporate life
cycle successfully.

Birth

The birth of an organization is both an exciting and a stressful time. Business owners are excited about
the possibilities, but also understandably concerned about the potential risk they face. They are
concerned about whether their business will be able to successfully compete with others in the market
or, if their product or service represents something new, whether consumers will respond positively.
During the birth phase, companies are focused on generating awareness and will focus on media
marketing and messages designed to attract attention and create buzz.
Growth

During the growth phase of a business, it is on an upward slope, attracting new customers, gaining
market share and realizing increasing revenue. Decisions during this phase involve whether and how
rapidly to continue expansion and how much to invest in expansion efforts. Advertising and other
awareness-building activities are still important, but communication does not have to be as aggressive
as it was during the birth phase of the organization.

Maturity

The maturity phase for a business is generally a comfortable place to be. The business has cemented a
place in the minds of consumers for its products or services, enjoys widespread recognition and steady
demand for what it has to offer. Many of the top brands in the country are at the growth stage of their
life cycles. These brands are highlighted every year in Interbrand's Top 100 Brands report. The top
three brands on the 2010 list were Coca-Cola, IBM and Microsoft.

Decline

While there are some businesses that have stood the test of time, many face eventual decline as
competitors emerge and demand changes among their target audiences. Businesses may also face
decline if they do not respond rapidly enough to technological or other changes that may make their
products obsolete. The video rental industry is a good example of this. Bookstores are facing a similar
fate. Businesses may emerge from decline and move back to the growth phase by reinventing
themselves through new product introductions or expansion into new and different markets.

Growth
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Once a business has survived the early stage and achieved viability, the next stage is growth. The
business is typically starting to show a profit and the owners start to think about planning for the
future.

Expansion

In the expansion phase the business starts to branch out. A larger or additional facility may be taken
on and additional staff may be added.

Maturity

When a business has reached maturity, it has also achieved a level of stability. It is financially sound
enough to where it can survive downturns, and it now has a stable of established clients.

Decline

When a business starts to lose steady clients that it cannot replace, it begins to decline. Profits will
begin to fall and the business will reach the point where it no longer can afford to operate, leading to
its ultimate demise.

Start-Up Phase

During the start-up phase, companies are working overtime just to get off the ground. Crucial
elements of strategy in the start-up phase include securing adequate financing and establishing a
marketing presence. Start-up strategies are centered on gaining a foothold in a specific market,
spreading the word about the company and its products, making sure the company has enough money
to survive into the growth stage and fine-tuning initial business plans to adjust for unforeseen issues.

Growth Phase

During the growth phase, companies consistently gain market share from their competitors. Top-line
growth through sales is balanced by consistently high marketing expenditures. Strategies in the growth
phase are centered on steadily — or rapidly — increasing sales and awareness of the company in the
marketplace. Businesses should fine-tune their strategies for repaying lenders in this stage as well,
balancing retained earnings with higher than minimum loan repayments.

Maturity Phase

In the maturity phase, demand for a company's products and services levels off. Mature companies are
well known in the marketplace, and they have established a solid, loyal customer base. Strategies in
the maturity phase can take two routes; companies can either attempt to re-enter the growth phase by
introducing new products and services or entering new markets, or they can employ strategies
designed to hold fast to their existing market share, boosting profit through cost-cutting rather than
revenue growth.

Decline Phase

In the decline phase, demand for a company's products steadily — or rapidly — decreases. Companies
in the decline phase lost market share to newer companies with unique value propositions or superior
products and services. As with the maturity phase, decline phase strategies can take two different
approaches; companies can either attempt to re-enter the growth phase, or they can prepare exit
strategies, such as selling the organization or liquidating the company's assets.

Goal-Setting

The purpose of goal-setting is to clarify the vision for your business. This stage consists of identifying
three key facets: First, define both short- and long-term objectives. Second, identify the process of
how to accomplish your objective. Finally, customize the process for your staff, give each person a task
with which he can succeed. Keep in mind during this process your goals to be detailed, realistic and

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match the values of your vision. Typically, the final step in this stage is to write a mission statement
that succinctly communicates your goals to both your shareholders and your staff.

Analysis

Analysis is a key stage because the information gained in this stage will shape the next two stages. In
this stage, gather as much information and data relevant to accomplishing your vision. The focus of the
analysis should be on understanding the needs of the business as a sustainable entity, its strategic
direction and identifying initiatives that will help your business grow. Examine any external or internal
issues that can affect your goals and objectives. Make sure to identify both the strengths and
weaknesses of your organization as well as any threats and opportunities that may arise along the
path.

Strategy Formulation

The first step in forming a strategy is to review the information gleaned from completing the analysis.
Determine what resources the business currently has that can help reach the defined goals and
objectives. Identify any areas of which the business must seek external resources. The issues facing
the company should be prioritized by their importance to your success. Once prioritized, begin
formulating the strategy. Because business and economic situations are fluid, it is critical in this stage
to develop alternative approaches that target each step of the plan.

Strategy Implementation

Successful strategy implementation is critical to the success of the business venture. This is the action
stage of the strategic management process. If the overall strategy does not work with the business'
current structure, a new structure should be installed at the beginning of this stage. Everyone within
the organization must be made clear of their responsibilities and duties, and how that fits in with the
overall goal. Additionally, any resources or funding for the venture must be secured at this point. Once
the funding is in place and the employees are ready, execute the plan.

Evaluation and Control

Strategy evaluation and control actions include performance measurements, consistent review of
internal and external issues and making corrective actions when necessary. Any successful evaluation
of the strategy begins with defining the parameters to be measured. These parameters should mirror
the goals set in Stage 1. Determine your progress by measuring the actual results versus the plan.
Monitoring internal and external issues will also enable you to react to any substantial change in your
business environment. If you determine that the strategy is not moving the company toward its goal,
take corrective actions. If those actions are not successful, then repeat the strategic management
process. Because internal and external issues are constantly evolving, any data gained in this stage
should be retained to help with any future strategies.

Emerging

Getting in on the ground floor with products and services in an emerging industry can prove profitable
for your business. In the start-up stages of an industry's growth, the risks are usually higher and the
failure rates exceptional. At the same time, the potential rewards are staggering when you're involved
in an emerging industry at the right time and place. Many emerging industries rely on venture
capitalists or investors' family money to fund growth because a track record doesn't exist for obtaining
traditional funding.

Successful

Rapid-growth industries enjoy exceptional sales and innovation. They are industries that emerge from
the start-up stages to a welcoming consumer base. More competitors emerge during this stage,
requiring you to step up marketing efforts in order to maintain the rapid growth you're experiencing. It
is also a crucial time for building consumer loyalty as you amass a base of repeat customers. Prices
tend to lower during the rapid growth period as vendors find cheaper ways to produce your products,
and this competition fuels price wars. Investors make lucrative decisions when they purchase rapid-
growth industry stocks, and banks freely continue financing the growth.

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Stable

Mature industries are considered more stable than emerging or rapid-growth industries. When you
enter the maturity stage in your industry most of the competition begins to wane, as consumers have
made their choices and continue supporting the companies that have served them well during the rapid
growth period. However, the companies that are left standing when an industry matures often face
grueling price wars that result in reduced margins. At the same time, companies in stable industries
typically have a wealth of reserves that can help them weather price adjustments and poor economic
climates.

Losing Ground

Declining industries are those that are on their way out of the market because the product or service
becomes obsolete or has been replaced with newer, more attractive options. Declining prices usually
indicate an industry is in the beginning stages of losing ground with consumers. Trends, loss of
consumer confidence and expansive declining economies often trigger the decline of an industry.
Companies struggling through a decline of popularity may continue operating for long periods of time
with periodic growth spurts, but on the whole, most eventually fold.

Q.13 What are the key ingredients (components) of e-commerce "business model"? Discuss
various "business models" of c-commerce with the help of examples from Pakistan.
(20)

Ecommerce is the process of selling products and services electronically, which can happen via the
Internet or mobile phone. With significant increases in technology, ecommerce has revolutionized the
way people do business. Ecommerce allows business transactions to flow easily between countries.
There are several types of ecommerce activities that transactions fall under.

Brokerage

An auction business model serves as a brokerage between buyers and sellers. According to
DigitalEnterprise.org, three types of transactions may occur between buyers and sellers in a web
marketplace: business-to-business, business-to-consumer and consumer-to-consumer.

In one example, eBay is a massive auction site in which consumers find products using a bidding
process. The eBay business includes all three types of transactions. As a brokerage, a site like eBay
charges a fee--to buyers, sellers or both--to cover the cost of bringing buyers and sellers together.

Advertising

An advertising model involves posting web ads onto websites. These ads are targeted for consumers.
For example, Double Click's DART for Advertisers provides a way to manage online advertising, serving
and reporting. A business uses DART for Advertisers to manage multiple digital advertising campaigns,
such as targeting a campaign to publish ads through channels like Yahoo. Serving refers to a server
that posts ads in appropriate locations, and reporting refers to providing performance information back
to an advertiser. With reports, an advertiser can decide which ads are having the most success, such
as getting clicked on the most by online consumers.

Affiliate

An affiliate business model is a model in which websites work as partners. For example, a pay-per-click
model means a merchant will receive compensation when one of its customers clicks on the website of
an affiliate (or partner). When a customer clicks that ad, he will be taken to the affiliate's website,
meaning the merchant will get paid for the click-through. The affiliate relationship may also work the
other way around. If a customer follows a link on an affiliate's website and ends up at a merchant's
website, the affiliate will receive compensation for that click-through.

As partners, both affiliates benefit in this relationship. They are reaching wider audiences on two
websites.

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Major components

A merchant model is perhaps easiest to understand. A business such as Barnes & Noble operates its
own website to sell products or services to customers. In this example, Barnes & Noble is a bookseller
that operates traditional stores, and it uses its website to sell more books. Other merchants may not
be storefronts, but they have another type of business model. For example, a mail-order catalog or a
winery could open its own online store and sell directly to customers. There is no intermediary (or go-
between) in this business model.

Business to Business, B2B

Business to business, B2B, ecommerce transactions happen between two companies. B2B activity is
not new, but the Internet has changed how everything is transacted. An example of B2B is a company
that outsources its bookkeeping activities to another company. Another example includes a business
that buys its products from a wholesale company. B2B transactions are usually handled with lines of
credit and companies often times have long-lasting relationships with one another. The seller has
responsibility of determining the buyer's creditworthiness.

Business to Consumer, B2C

Business to consumer, B2C, transactions deal with customers purchasing products and services from
companies through the Internet. Online shopping has increased significantly in recent years. Many
companies take extreme security measures to protect the sensitive financial information of consumers.
B2C ecommerce transactions are not strictly bound to retail shopping. Many customers purchase health
insurance, auto insurance and similar products online. One reason for the popularity of B2C
ecommerce is consumers enjoy the convenience of purchasing products and services online.

Consumer to Consumer, C2C

Consumer to Consumer, C2C, ecommerce activity is more recent, and usually requires a business to
play the middleman. Companies like ebay and Amazon have made C2C more popular. The way it works
is companies that have products to sell list them through a third-party site. Consumers looking to
purchase products visit the site and search the available products. The consumer purchases the
product and the seller is responsible for delivering the product. The business that plays the middleman
usually requires a transaction fee from either the seller or buyer.

Consumer to Business, B2C

Consumer to business, B2C, transactions occur when a company places a job online and businesses bid
on the project. For example, a consumer that needs a website designed will place the details of the job
on a bidding site along with his budget. Companies with experience in web design will submit bid
proposals to the consumer. The consumer chooses a company, submits the agreed upon payment to
the business and waits for the delivery of the website. Bidding companies act as the middleman
verifying that payment and service are delivered.

Mobile Commerce

Mobile commerce deals with business transactions that happen through mobile phones. Many
companies now offer mobile applications that customers can download to their phones. The
applications are typically a condensed version of the full version of the site. Many retail stores offer
mobile software applications to purchase items and have them shipped. Another common mobile
commerce transaction is mobile banking. Consumers can check account balances, transfer funds and
look at bank activity while mobile.

An eCommerce business model bears similarities to traditional business models. One of the major
features of an eCommerce model is how a company will maintain security in online transactions and
protect user information. Another feature is that an eCommerce business model will include defining
relationships between customers, providers and intermediaries. Before choosing a business model, an
entrepreneur must consider how to meet the challenges of security in eCommerce.

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E-Commerce in Pakistan

Firstly, there’s a significant lack of awareness among the masses regarding e-commerce. Most of us
still think of web transactions as a risky activity, while some think seeing is believing and one should
always have a physical dealing. This is not always applicable and as I mentioned, people in foreign
countries even get their groceries from online stores, so why can’t we port our activities to the web?

Most of us also experience hesitation while trying something new. In reality, e-commerce is quite
convenient. Since we haven’t tried it yet, we are always hesitant in doing so. All this is due to the fear
of being scammed over the web or not getting the right product without visiting the actual market, or
looking at the advantages of buying from a shop, instead of buying online.

Next, there’s the ultimate dilemma- if a business restricts itself to e-commerce only, it will be targeting
a relatively small group of people who are aware of the online buying & selling phenomenon (not to
mention, they’re a fraction of the total number of people who know how to use the internet). So that’s
why the transition to e-commerce is taking some time. once business will take initiative, customers will
be attracted towards it, and that’s how the use of e-commerce will rise.

Electronic commerce is fastest growing field in Information technology in Pakistan. After the invention
of plastic money, now people can able to purchase goods online. Internet becomes world largest
market space. Where amazon.com & alibaba.com become gaint estore. People all over the world are
buying products through internet. It’s very easy and user friendly. No need to dress up and go to the
market for shopping . Sometimes it become a hectic, specially in big cities where traffic jam problems
exists. In Pakistani prospective, huge potential and gap is discovered in this field. You can say latent
demand exists in marketing terminology.

Q.14 Explain in detail the technologies for web servers in internet resources for commerce.
(20)

E-commerce includes buying and selling activities conducted online and through other electronic media
and devices. The proliferation of online retail and e-commerce make the use of marketing tools
important to companies as they help attract and retain primary customers. Each tool offers distinct
advantages.

Websites and Blogs

Businesses commonly develop websites and blogs to promote their companies, products and services.
Blogs offer an interactive tool to communicate information to customers and receive feedback through
comments. Additionally, companies use sites and blogs as media for banner ads and other ad
placements. For instance, a sports retailer may pay to place banner ads on sports-rated websites and
blogs.

Email

Email marketing is used to attract new customers and maintain close relationships with existing ones.
Companies use lead generation tools and buy email lists to send out mass emails at a low cost. Many
companies offer sign-up forms on their websites for email newsletters. They also use email to target
loyal customers with information and special promotions. Email clubs allow customers to receive
weekly or monthly email promotions.

Search Engines

Search engine optimization, or SEO, has become a major marketing tool for small online companies in
the early 21st century. SEO is the development of a website that achieves high results in popular
search engines such as Google and Yahoo. Being a top listing in a popular product- or industry-related
search is a major source of site traffic. You can buy search placements as well to attract a certain
volume of visitors while your site grows.

Social Media

E-Commerce businesses also use social media tools, including Twitter, Facebook, Pinterest and
YouTube to create awareness, attract customers and interact directly with people. Companies can
make brand or product announcements to followers and monitor conversations about their businesses

36
using social media. The immediate interaction and affordability make social media tools appealing to
small businesses.

Virtual Communities

Virtual communities include an array of online meeting places for people who have shared interests,
such as gardening, video games and books. Forums, chat rooms and other interactive formats exist as
virtual comunities. These communities provide a good venue for e-Commerce ads because of the
specialized audience interest. For instance, a seed company might advertise on a gardening forum.

E-commerce Tools
1. Unbxd

Unbxd is a relatively new entry to the e-commerce marketer’s toolkit. Unbxd provides intelligent,
‘context-aware’ site search and personalized recommendations. Unbxd is a one-stop product discovery
solution and gives marketers and merchandisers the tools to optimize their site search and product
recommendations.

For e-commerce sites, site search is an incredibly important part of the customer experience.
According to econsultancy, over 30 percent of site visitors will use site search and according to one
study, visitors using site search converted at 4.63 percent compared to the site’s average of 2.77
percent — over 1.8 times more effective!

Here, Unbxd helps e-commerce sites by offering site search that understands visitor intent, is
personalized, error-tolerant (due to spellcheck and advanced autocomplete) offers filters and can be
merchandised based on business objectives.

Another area of product discovery that Unbxd solves is product recommendations. First made popular
by Amazon, product recommendations are now a mainstay on large and small e-commerce websites
alike, resulting in consistent conversion increases of 10 to 30 percent.
By offering personalized recommendations based on user behavior and other important signals, Unbxd
helps e-commerce sites personalize the customer journey and increase conversions by 17 percent to
22 percent.

2. Google AdWords

Organic search is an effective method for traffic acquisition and sales promotion, but its conversion
rates are not always high. Google AdWords is one tool that can help you promote your e-commerce
site more efficiently and also boost sales. You can create and run ads using this tool in Google’s Search
and advertising network.

Google Adwords displays your ads depending on their relevance to the keywords used by the
searcher(s). Your ads therefore will be transmitted to searchers interested in your products/brand.
Since this tools works on ‘Pay Per Click’ basis, it helps you to save on your advertising budget.
Furthermore, it provides in-depth insight to help you measure advertising effectiveness to assess the
attractiveness of your marketing message.

3. Optimizely

This is one of the best tools for A/B testing, which is used to measure the impact of changes of two
variants in design. A/B testing helps you to test different layouts, colors, and copy on your e-
commerce website to determine what converts best and leads to higher revenue.

Optimizely is used by some of the big brands including Fab and Sony. This tool offers a selection of
packages to support different levels of engagement. For an online store with less than 2,000 monthly
visitors, the basic package is a good start.

It works as your on-demand technical team and other advantages of Optimizely include instant testing
capability, scheduled test, easy customization with visual point and click editor, and track engagement,
clicks, conversions and more. Optimizely can be integrated with various popular analytics tools such as
Google Analytics, SiteCatalyst, and KISSmetrics.

4. SearchSpring

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This is a popular site navigation solution that helps online retailers to connect shoppers with relevant
products and boost sales. Some of the largest eCommerce brands like Stanley Black & Decker have
used SearchSpring for their advanced website search and category navigations.

Using SearchSpring you can collect better search data, optimize auto-complete, provide relevant
search results, provide automatic search redirect and drive search conversions. It unleashes findability
with advanced site navigation solutions to boost your E-commerce sales. You can gain insights like ‘Top
Search Queries’ and ‘No Results Found’ using this platform.

5. Zendesk

Zendesk is the tool you should look for. It helps you to provide better customer service without having
a customer service team. This tool has a plethora of advanced features that allow you to create
customer support tickets, resolve tickets, use templatized solutions, create self-help sections, and
track your customer service performance.

It collects all of the questions/issues raised by customers through phone calls, social networks, email,
chat or search and compiles them in one place. You can even have proactive conversations with your
customers using Zendesk and send them surveys. Brands like Groupon and Gilt are using this software
for their customer service solution.

6. Crazy Egg

Heat-map and scroll-map are important insights for e-commerce sites. Tools like Crazy Egg allow you
to see which parts of your web pages your visitors click on so that you can gain a better understanding
of how your visitors engage with your online store. Such insights play a significant role in improving
your conversion rates.

Some of the biggest e-commerce brands like Amazon, eBay, Zappos and Dell are using Crazy Egg for
heat mapping. Using this tool you can see which pages get the maximum amounts of clicks. Besides,
the scrolling maps show how far down your visitors are scrolling.

Q.15 Explain the requirements of web-based E-commerce. (20)

hysical location. The types of licenses a web-based business needs vary depending on your state.

City or County Licenses

Almost all cities or counties will require you to obtain a business license if you conduct business
within the jurisdiction. According to Entrepreneur.com, an online business resource, the cities and
counties collect money from business licenses primarily to "raise money for the city or county."
These fees, which vary by jurisdiction, will be collected at your local City Hall or from your County
Clerk upon registration of your business.

State Licenses

Some professions require a state-issued business license to operate. If you need a license to register
your business in your state, you might also need one to operate your business online. One example
of this would be an auctioneer license. In some states, if business owners conduct auctions of other
people's merchandise over the Internet with the intent of earning a commission, these business
owners would be required to obtain an auctioneer license.

Sales Tax Licenses

While retail store fronts collect sales taxes from customers on the goods they purchase, and remit
them to their state revenue agency, web-based businesses are treated differently. Because your
business is located online, this opens up a large territory where you can now conduct business.
According to the U.S. Small Business Administration, if you sell to someone that is located in your
state, you must collect sales tax from that person on the purchase of the product. However, if you
sell to a resident of a state that is different than the one where your business is located, then that
person would not have to pay sales tax on products that they purchase from you. Requirements for a

38
sales tax license also vary by state, because several US states don't collect a sales tax at all, and
most states exempt certain items from sales tax.

Example

If you want to open a web-based store with an office in Nebraska selling a retail product, start by
applying for an employer identification number through the federal Internal Revenue Service. Next
apply for a state sales tax identification number through your state's tax revenue collection agency.
Depending on the nature of your business, you may or may not require other state licenses. If you
were an auctioneer or operated a consignment shop, then you might need to obtain appropriate state
licensing. Finally, visit your local city hall to fill out the paperwork needed to obtain a city business
license so that it is legal for you to conduct business in your city.

Considerations

For a web-based business, the only requirements for obtaining business licensing applies to the state
from which you conduct business, not all of the places where the customers that purchase your
products are located. According to Business.gov, the legal term for your on-line business's physical
place of business is called a "nexus." If you operate out of an office or a warehouse of any kind, then
you have a nexus. If you expand your business and start operating out of another state, you will also
have to obtain licensing from the new location's city, county and state governments also.

One quick way to make your business idea a reality is to start it online, as it is often less expensive
to operate an online business versus a traditional business. For example, instead of renting an office
to start a consulting business, you could solicit and service clients remotely via the Internet. Most of
the requirements to start an online business mirror the process of setting up a brick-and-mortar
company.

Choose Business Location—Domain Name

One of the first requirements to start a company on the Internet is to secure an appropriate domain
name so that customers can find your company online. A domain name is a virtual business location,
similar to the address of a commercial building. Choose a web-hosting provider that will provide
storage space for your business website files.

Accept Payments—Online Merchant Account Service

In order to accept payments from customers, sign up for an online payment service. Popular online
payment services include PayPal and Google Checkout. With these types of services you can sign up
for free and then pay a per-transaction fee. Another option is to apply for your own Internet
merchant account, which commonly requires a setup fee and monthly charges plus a per-transaction
fee.

Hire Help—Web Programmer or Designer

In order to publish your company to the Internet you need to hire a web designer and programmer;
sometimes you can find someone who does both. This person designs your online business
destination the same way you might design the interior of a brick-and-mortar store or a sign to hang
above the entrance. A number of hosting providers also offer web-building tools and templates if you
wish to create your own business website.

Inform Customers—Web Content

Your web pages must have relevant and informative content, similar to the marketing materials such
as company brochures that are distributed by businesses that do not exclusively operate online. This
content also takes the place of salespeople to sell your products and services.

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Market Your Business—Online Advertising and SEO

As is the case with a physical store or office, potential customers will not know about your Internet
company unless you advertise. You can do so with online text ads, banner ads, social media
marketing and by creating search engine optimizing (SEO) for your website to bring traffic to your
page. Some online advertising services allow you to target your ads to specific customers.

Q.16 How will you plan and design an E-commerce website? (20)

Traditional "on the street" businesses give customers a direct, in-person experience of the products
or services offered. Just as customer experience plays a pivotal role in converting window-shoppers
to actual buyers, an e-business' website design determines the type of interactions customers have
with the business. Developing a strategic design plan for an e-business requires a customer-focused
approach that clearly defines what an e-business has to offer customers within its marketplace
sector.

Customer-Focused

The online world functions as a visual environment that uses design features to attract and hold a
visitor's attention. Since e-businesses seek to market and sell products and services, a website's
design becomes the first impression a visitor has of a business' product offerings. In order to attract
potential customers, strategic plans for a site design should use a customer-focused approach. Such
an approach considers a potential buyer's interests, price range and product expectations. Strategic
plans also incorporate strategies to stay abreast of the changes in the online world in terms of new
ways of reaching and interacting with customers in an online environment.

Marketplace Factors

Whether online or offline, a business' effectiveness relies partly on its ability to carve out a niche
within a marketplace. As part of a strategic plan, website design incorporates this niche presence
through color, functionality and the words used to describe the company and its products. Since
customer interests and preferences can change over time, an e-business may need to redefine or
fine-tune its niche area in order to keep up with customer expectations. Newer communication
media, such as social networking sites and audio/video components, may require e-businesses to
revamp the structural components that make up a site's design in order to take advantage of
different ways of reaching customers.

Structural Design

The structural design for an e-business website consists of a format or trail that leads visitors to
different areas of the site. Site content material includes text, images and navigational aids that help
visitors find their way around. A site design strategy attempts to move visitors toward the products
or services offered by the e-business.

To help potential customers find an e-business site, designers use keywords and keyword phrases
throughout the site's contents to attract search-engine visitors. The use of keywords also helps to
link the pages of a site together, which attracts search-engine spiders. In effect, search-engine
spiders decide which sites to display when a visitor searches for a particular term.

Security

With e-business sites focusing on marketing and selling products, security becomes an important
plan objective in terms of ensuring safe and secure money transactions. Site designers must select
the types of components to use for handling the actual money transactions that take place at the
site. With a range of different shopping cart options and merchant gateways to choose from,
designers must be sure to avoid incompatibility issues, which could leave a workable site design
vulnerable to potential hackers. Sites that sell physical products must also ensure that customer
information remains secure when sending orders to the companies that actually ship or mail the
products to the customers.
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 Developing an eCommerce business plan involves documenting details regarding how you plan to
conduct business using an Internet website. Electronic commerce typically requires secure electronic
data interchange, electronic funds transfer and email. Use web analytics tools, such as Omniture,
WebTrends or Alexa, to obtain traffic metrics that help you focus your business and respond to
customer buying patterns. eCommerce business plans usually include an overview of your company,
product or service and business model as well as details about how you plan to handle advertising,
research and development, order processing and shipping.

1 Assess your company’s readiness to conduct business on the Internet. For example, the Arkansas
Small Business and Technology Development Center website provides a short online quiz to help you
decide if you meet the prerequisite conditions for building an eCommerce business plan.

2 Open a new document using word processing software to write your eCommerce business plan.
Create an executive summary that describes the product or service. Include tangible benefits
associated with offering your product online, such as reduced labor costs for your sales force, easier
access to customer data or improved cash management. Describe how you plan to target customers in
the global Internet marketplace.

3 List details about how you plan to develop and market your product online. Use this section to
identify your competitors and how you plan to differentiate your site. List the types of product
advertising campaigns, delivery strategies and product pricing plans that you plan to employ. Provide
details about how you plan to process online orders, encourage repeat business and maintain customer
satisfaction. List promotional information you plan to publish on your website, such as free newsletters,
complimentary tools or online chat sessions and webinars. Describe how frequently you plan to update
your website.

4 Include a section on operational management, specifying daily operations. List the type of
equipment, such as hardware and software, needed to run your eCommerce business. Specify if you
intend to buy and manage your own web servers or contract with another company. Describe the staff
knowledge and skill requirements necessary to design and maintain your website. Describe techniques
for managing search engine optimization that will drive traffic to your site and enable sales. Consider
deploying a virtual shopping experience or event using a 3D world technology, such as Active Worlds,
Metaverse or Second Life.

5 Provide financial details about how much it will cost for you to be successful. Define the time line for
building and deploying your eCommerce site, breaking down the costs for each phase. Project how
much money investors can expect to make. Be optimistic but realistic as well. List any risks you
anticipate, such as competitor product introductions or production delays.

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