Answers to Pause/Break Section Review Questions

Section 1.1 Review Questions 1. Define EC and e-business.

Electronic commerce is the process of buying, selling, or exchanging products, services, and information via computer networks. E-business is a broader definition of EC that includes not just the buying and selling of goods and services, but also servicing customers, collaborating with business partners and conducting electronic transactions within an organization. 2. Distinguish between pure and partial EC.

Companies utilizing pure EC conduct all of their business online. Businesses utilizing partial EC conduct a portion of their business online and a portion of their business offline. 3. Define click-and-mortar and pure play organizations.

Click-and-mortar organizations conduct e-commerce activities, but do their primary business in the physical world. Pure play organizations rely on the Internet and EC for all of their sales. 4. Define electronic markets, IOSs, and intraorganizational information systems.

Electronic market – An online marketplace where buyers and sellers meet to exchange goods, services, money or information. IOSs – Communication systems that allow routine transaction processing and information flow between two or more organizations. Intraorganizational information systems – Communication systems that enable ecommerce activities to go on within individual organizations. 5. Describe non-Internet EC.

Non-Internet EC is the use of EC technologies on private (as opposed to public) networks. Section 1.2 Review Questions 1. List the major components of the EC framework.

The EC framework is made up of the following components: people, the public policy, technical standards and protocols, business partners and support services.

consumer-to-business. including digital communication networks.2. List the major factors in today’s business environment. nonbusiness EC. List the three characteristics of the digital economy. 4. This was followed by a wide public acceptance of the Internet. These characteristics include: a wide variety of digitized products. The major transactional types of EC include: business-to-business. electronic government and exchange-to-exchange. and microprocessors and network capabilities embedded in physical goods. business-to-business-to-consumer. financial transactions being conducted digitally. The model describes how the business environment creates problems and opportunities that effect the company and how the company responds to those stimuli to create solutions. . Currently the growth of new Web 2. List the major transactional types of EC. The major landmarks in EC history began with the use of EDI to transmit business information. 3. computers. Define the digital economy." Another major landmark is the winding down of many of these "new economy" businesses. List the components of the business environment impact model and explain the model. 2. or the Web economy. software. business-to-employee. Describe the major landmarks in EC history. List some EC successes and failures.4. intrabusiness EC. 2. collaborative commerce. consumer-to-consumer. A digital economy is an economy that is based on digital technologies. It may also be called the Internet economy. The next major landmark was the development of several early electronic commerce sites online and the growth of the "new economy.4 Review Questions 1. and other related information technologies. Student answers will vary and may include some of the examples given on page 12.0 services and ventures defines EC. mobile commerce. Section 1.3 Review Questions 1. the new economy. business-to-consumer. Section 1.

and business model. List the major response activities taken by organizations. societal and technological categories. supply chain improvements. electronic marketplaces and exchanges and supply chain improvements. continuous improvement systems. affiliate marketing. Name your own price – reverse auction where bidders submit prices they would pay. Some business models related to selling include: online direct marketing. buyer marketing. Some business models related to buying include: electronic tendering systems. Describe a revenue model and a value proposition.5 Review Questions 1. and mass customization. Revenue model – Description of how the company or an EC project will earn money. business alliances. employee empowerment. Section 1. Organizations respond to business pressures by using: strategic systems.The major business pressures faced by organizations can be divided into markets. group purchasing and supply chain improvements. Describe the following business models: name your own price. and product customization. Section 1. Identify business models related to buying and those related to selling. A business model is a method of doing business by which a company can generate revenue to sustain itself. online auctions. viral marketing. and the system attempts to match those prices with merchants Affiliate marketing – One firm helps advertise for another and takes a commission on sales from referrals Viral marketing – Word of mouth marketing Product customization – Creating products based on individual needs 4. A business case is a written document that is used by managers to gather funding for specific applications for projects. Define the following: business plan. business case. Value Proposition – The benefits a company can derive from using EC. 2. find the best price. name your own price. product and service customization. 3. affiliate marketing.6 Review Questions . its major emphasis is the justification for specific investment. increased efficiencies. 3. A business plan is a written document that identifies the business goals and outlines the plan to achieve them. electronic markets.

creating a cost savings. 2.7 Review Questions 1. 3. speed. safety and revenue generation. MySpace is popular due to the large number of features and other users to interact with. Describe some contributions of EC to homeland security. improving business processes and promoting interactivity. individuals. EC technologies allow for better communication. security. Social networks are websites that aggregate individuals with similar interests and provide an array of tools and services to them. What is a business-oriented network? . EC benefits society by improving the standard of living and delivery of public services. but may focus on issues of accessibility. Members use these services to share information and content with each other in a social setting. information interpretation and information sharing (transparency). personalization and communities. These limitations are summarized in Exhibit 1. EC benefits consumers by providing them convenience. customization. access restriction. Describe MySpace. Features vary by site but can include: • Chat • Discussion • Photo sharing • Video sharing • Blogging • And more 2. and society. cost. coordination. EC benefits organizations by expanding the marketplace. What are some of the major issues faced by social network sites? Student answers will vary. liability. 4. Section 1. 3.9. Why is it so popular? MySpace is a social network that provides a variety of features to members.1. What is a social network? Identify major features offered by social networks. List the major technological and non-technological limitations of EC. Describe some EC benefits to organizations.

Answers to EC Application Case Questions EC Application Case 1. meetings/events and privacy of information. What is a corporate portal? A corporate portal is a company’s gateway to a variety of services available to employees. • A digital enterprise is a firm that relies on IT to manage customers.g. personal marketing. . 2. 2.com is a European business oriented network. Xing.. Define intranets and extranets.1: Buy Chocolate Online? Try Godiva. B2B) in Exhibit 1. It provides many benefits including: contacts/network expansion.11. purpose. 4.These networks are similar in function to other social networks.com. Describe Xing. Section 1. content experts/advice. 5. as opposed to purely social. Identify the B2B and B2C transactions in this case. 3.com and list five of its major benefits. An extranet is a company’s secured website used by select individuals and organizations. An intranet is an internal use only website used by companies. Define a digital enterprise. Why did Godiva decide to sell online? The firm was looking for an avenue to increase sales. Identify EC transaction models (e. List the EC drivers in this case. partners and the public. increase productivity and improve efficiency. Student answers will vary.8 Review Questions 1. 3. Questions 1. Godiva. but are organized to fulfill a business.com sells both to individuals and corporations through the website.

The first level is design collaboration where designs are reviewed and improved by a large group of internal and external designers. The third level is real-time collaboration between all partners as the need arises. List the levels of collaboration and the parties involved. The site appears to be very user-friendly.com. How user-friendly is the site? Student answers will vary. The second level is supply chain management where production and logistics are coordinated by the company and its suppliers. Describe online collaboration and its benefits to Boeing. How does the technology facilitate collaboration? The technology makes it much easier for individuals and groups to share and comment on information. The company sells to companies that will then resell to individuals. Online collaboration at Boeing includes the ability to quickly share and evaluate the ideas and inputs of a wide variety of global partners to enhance product design and reduce cycle time. EC Application Case 1. 4.2: Boeing Changes the Nature of its Business with Global Collaboration Questions 1.3: MySpace: The World’s Most Popular Social Networking Web Site Questions 1. providing an easy shopping experience coupled with a large amount of information. 3. Describe B2B2C at Godiva.In 1994 the major drivers for increased sales were user groups. Targeting these users with the Web site was key to increasing sales. 2. EC Application Case 1. Visit Godiva. 5. making it more likely that decisions will be based on wider input. Why does MySpace attract so many visitors? . There are three levels of collaboration. The site makes this easier by facilitating some of the logistics.

Brick-and-mortar organizations only maintain a presence off-line.The site provides a variety of tools that makes it easier for individuals to interact. This is required for firms to have successful EC. 4. Google benefits by having access to the users and being the default search tool. 5. 2. access restriction. Answers to Discussion Questions 1. What are the benefits to MySpace and Google from their collaboration? MySpace benefits from the fees paid and it is now able to add an on-site search feature to users. as well as a gathering place for community members to learn. E-learning fits both of these definitions because it provides the technology solution for workflows (education) while also creating a learning community. security. Customers are then able to select the options that they . List the major issues faced by the company. The site also benefits from a large number of users. How does EC facilitate customization of products and services? EC facilitates customization by allowing customers to see the full range of options available for a given product. Why is it said the EC is a catalyst of fundamental changes in organizations? EC causes fundamental changes in organizations because it requires business models and processes to be redesigned and streamlined. 2. Because a smart card uses technology to automate a process (creating greater efficiencies and ease-of-use) it can therefore be considered EC. Some issues include accessibility. Why is buying with a smart card from a vending machine considered EC? EC can be defined as the application of technology toward the automation of business transactions and workflow. liability. safety and revenue generation. 3. 3. Click-and-mortar organizations maintain a presence both online and off-line. transact and collaborate. making the interaction more diverse and interesting. Compare brick-and-mortar and click-and-mortar organizations. Why is e-learning considered EC? EC can be defined as the application of technology toward the automation of business transactions and workflow.

The steps may be redundant or can be replaced with more efficient technology solutions. Compare and contrast viral marketing with affiliate marketing. 11. In both viral and affiliate marketing of business." This limitation . EC facilitates customer support by providing a wide range of technological solutions and communication opportunities. Explain how EC can reduce cycle time. provide the necessary information for supply-chain optimization. Additionally. EC supports self-help customer service so consumers can answer their own questions. Business processes should reflect current resources and supply networks to focus on providing products and services with an acceptable revenue model. EC technologies allow for better communication. improve employees’ empowerment. individuals or firms are paid based on the amount of additional business they can send to the selling firm. coordination. 7. 8. With viral marketing. Carefully examine the nontechnological limitations of EC. individuals are encouraged to market the product to others without any financial gain. EC can reduce cycle time by eliminating steps in business processes. and facilitate customer support. information interpretation and information sharing (transparency). EC can provide employee empowerment by providing employees with greater and easier access to information provided by the employer. The elimination of the steps speeds the overall process and reduces cycle time. 6. With affiliate marketing. EC facilitates supply chain management by exposing the inner workings of the supply chain and indicating which areas contribute the greatest value. 9. These indications. Discuss the contributions of EC technologies to homeland security. This provides a more direct link between the customer and the firm that will eventually fill their custom order. Products and services should be directed at appropriate customers. Discuss the relationships among the various components of a business model. relying on a third party to assist in its marketing effort is necessary. coupled with a firm understanding of the chain's workings. 10. Explain how EC is related to supply chain management. Which are company dependent and which are generic? All of the listed nontechnological limitations are generic concerns with EC with the exception of "Lack of trust in EC and in unknown sellers hinders buying.desire and these options may be sent directly to the manufacturer or service provider.

.may be overcome by well-known and established merchants who will bring with them some level of customer confidence.

com to be a social network? Why or why not? Student answers will vary. with customer preferences taking more time to adapt.12. but primarily provides information. such as MySpace. and why? Student answers will vary. . Why are social networks. considered EC? These networks are considered EC because they rely on EC tools and models to function. Which of the EC limitations do you think will be more easily overcome—the technological or the nontechnological limitations. 13. It appears that the site has social aspects. 14. Would you consider eDiets. In most cases technological limitations are easier to overcome.

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