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Self Assessment Questions Answers Ebusiness and Ecommerce Management 4th Edition
Self Assessment Questions Answers Ebusiness and Ecommerce Management 4th Edition
Note, that answers to in-chapter activities and other questions are only available
to lecturers who register via the Pearson site at www.pearsoned.co.uk/chaffey.
Chapter 1
Self-assessment questions
1. Distinguish between e-commerce and e-business.
This can best be explained by referring to different elements shown in Figure 1.1
i.e.
sell-side e-commerce
buy-side e-commerce
3. Describe the different services that can be offered to customers via a web
presence.
This is covered in more detail in Chapter 5 where stage models are referred to
(p214):
transactional customer service – questions can be asked and answers supplied online
4. Summarize the consumer and business adoption levels in your country. What
seem to be the main barriers to adoption
Clickz (www.clickz.com/stats) is a good source of country information. For
business, the main barriers are highlighted by the DTI (2000) survey:
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
lack of imperative;
security risks.
For consumers, the Which report highlights fears about security and privacy as
well as the lack of a perceived need.
Customer service – more detailed information, faster response can be provided 24 hours,
and 7 days a week.
Competitive advantage – any of the above factors may provide this, but it is likely to be
short lived.
The McKinsey 7S model is a useful framework for looking at the different aspects of a
business that may be affected by the move to e-business.
Style – less likely to change, but some organizational styles are more responsive to
change
Superordinate goals – higher level aims may be updated depending on the business.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Note that Mondus wound down operations in 2002. Another example is Clearly
Business, a joint venture between Barclays and Freeserve.
Chapter 2
1. Outline the main options for trading between businesses and consumers.
These are:
B2B – interorganizational
reintermediation – selling via new online intermediaries with new pricing models such as
Priceline, Lastminute or Expedia
3. Describe the three main alternative locations for trading within the electronic marketplace.
4. What are the main types of commercial transactions that can occur through the Internet or
in traditional commerce?
1. Negotiated deal
2. Brokered deal
3. Auction
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
4. Fixed-price sale
5. Pure markets
6. Barter
Timmers (1999) identifies no less than 11 different types of business model that can be
facilitated by the web as follows:
4. E-auctions – these can be both for B2C and B2B as is the case with eBay.
10. Information brokerage – providing information for consumers and businesses, often to
assist in making the buying decision or for business operations or leisure.
11. Trust and other services – examples of trust services include Which Web Trader
(www.which.net/webtrader) or TRUSTE (www.truste.org) that authenticate the quality
of service provided by companies trading on the web.
7. Describe some alternative revenue models for a web site from a magazine publisher.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Chapter 3
1. What is the difference between the Internet and the World Wide Web?
Use TV analogy: Internet is the network for transmitting data globally, web is the method of
delivering the content (channels).
The Internet
The Internet refers to the physical network that links computers across the globe. It consists
of the infrastructure of network servers and communication links between them that are used
to hold and transport information between the client PCs and web servers.
2. Describe the two main functions of an Internet Service Provider (ISP). How do they differ
from Applications Service Providers?
Internet Service Provider (ISP)
A provider enabling home or business users a connection to access the Internet (1). They can
also host web-based applications.
Application server
An application server provides a business application on a server remote from the user.
Intranet
A private network within a single company using Internet standards to enable employees to
share information using e-mail and web publishing.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Extranet
4. Describe the standards involved when a web page is served from a web server to a
user’s web browser.
Request page and deliver page (HTTP), transfer request and information (TCP/IP), render
page in browser (HTML).
TCP/IP
The Transmission Control Protocol is a transport layer protocol that moves data between
applications. The Internet protocol is a network layer protocol that moves data between host
computers.
HTTP or Hypertext transfer protocol is a standard which defines the way information is
transmitted across the Internet between web browsers and web servers.
HTML is a standard format used to define the text and layout of web pages. HTML files
usually have the extension .HTML or .HTM.
5. What are the management issues involved with enabling staff access to a web site.
Cost of access.
HTML
HTTP
XML
FTP
HTML is a standard format used to define the text and layout of web pages. HTML files
usually have the extension .HTML or .HTM.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
HTTP or Hypertext transfer protocol is a standard which defines the way information is
transmitted across the Internet between web browsers and web servers.
A standard for transferring structured data, unlike HTML which is purely presentational.
Standard used for uploading and downloading files to and from web servers
7. What is the difference between static web content written in HTML and dynamic content
developed using a scripting language such as JavaScript?
Static content appears the same to all users. Dynamic content can be updated to reflect the
environment, e.g. time or personal preferences.
8. What software and hardware are required to access the Internet from home?
Chapter 4
1. Why is environmental scanning necessary?
2. Give an example how each of the macro-environment factors may directly drive the
content and services provided by a web site.
3. Summarize the social factors that govern consumer access to the Internet. How can
companies overcome these influences once people venture online?
Peer pressure
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Security fears
Companies should clearly communicate the benefits of online trading and make reassurances
about the threats.
4. What actions can e-commerce managers take to safeguard consumer privacy and
security?
Privacy statements should explain the actions taken to the customers. Firewalls should be
maintained to minimize the risk of unauthorized access to customer data. The relevant data
protection act should be followed.
5. What are the general legal constraints that a company acts under in any country?
See Table 4.2. Includes
Sales of goods/returns
Trademark law
They control through policies to promote its use and through monitoring messages through
ISPs.
Refer to a source such as the International Telecommunications Union (www.itu.int) for the
latest statistics.
Chapter 5
1. What are the key characteristics of an e-business strategy model?
Have strategies, tactics and implementation that select the best techniques to achieve
these strategies
Have monitoring and control that assess whether the objectives are being achieved and a
feedback loop to ensure corrective action occurs.
For e-business in particular, the strategy objectives should define the balance of online and
offline trading with customers, suppliers and distributors. The tactics should look at how
investment in information systems and revising business processes should occur to hit these
targets.
2. Select a retailer or manufacturer of your choice and describe what the main elements of
its situation analysis should comprise.
Situation analysis is summarized in Figure 5.6, p213. It includes evaluation of the external
environment as described in Chapter 4 (SLEPT or PEST) and internal resources using
techniques such as SWOT, application portfolio analysis and also demand and competitor
analysis.
3. For the same retailer or manufacturer suggest different methods and metrics for defining
e-business objectives.
Objectives should be SMART (Chapter 12). Examples of metrics are in Table 5.4, p227, e.g.
Revenue amount
4. For the same retailer or manufacturer assess different strategic options to adopt for e-
business.
This refers to the types of decisions outlined in the strategy section of this chapter. i.e.
Chapter 6
1. Define supply chain management, how does it relate to:
logistics;
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
The coordination of all supply activities of an organization from its suppliers and partners to its
customers.
Logistics – large overlap according to definition from Institute of Logistics and Transport:
‘Logistics is the time-related positioning of resource, or the strategic management of the total
supply chain. The supply chain is a sequence of events intended to satisfy a customer. It can
include procurement, manufacture, distribution and waste disposal, together with associated
transport, storage and information technology.’
Value chain concept – has similar components such as inbound and outbound logistics,
production and sales and marketing. Different orientation which is how to deliver customer
value. Plus separate identification of secondary activities such as HR and IS.
2. What is the difference between a push orientation to the value chain and pull orientation.
A change in supply chain thinking, and also in marketing communications thinking is the move
from push models of selling to pull models or combined push-pull approaches. The push
model is illustrated by a manufacture who perhaps develops an innovative product and then
identifies a suitable target market. A distribution channel is then created to push the product
to the market. This situation is shown in Figure 6.3 (a) where it can be characterized by the
statement ‘This is a great product, now who shall we sell it to?’ or the quip about the original
model T Ford – ‘you can have any colour, so long as it is black’. The typical motivation for a
push approach is to optimize the production process for cost and efficiency.
Information systems are used to increase the efficiency of information flow by:
Chapter 7
1 Outline the two main methods how companies purchase supplies and the two broad
divisions of supplies needed.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
‘There are two broad categories of procurement; those that relate to manufacturing of
products (production-related procurement) and operating or non-production-related
procurement that supports the operations of the whole business and includes office supplies,
furniture, information systems, MRO goods and a range of services from catering, buying
travel or professional services such as consulting and training. Raw materials for the
production of goods and MRO goods are particularly important since they are critical to the
operation of a business’.
2 Taking your answer from one, give examples of B2B exchanges that have been created
to meet these purchasing needs.
3 Draw a sketch that shows the main stages and people involved in traditional procurement
and e-procurement.
Cost reduction
Better quality
This is where purchasing is poorly controlled and users within departments may order
products that are not from a favoured supplier, do not meet company standards (e.g. of
software) or are unnecessary. E-procurement enables checks such as limits on purchasing or
from preferred sources.
6 Explain the differences between the buy-side, sell-side and marketplace options for e-
procurement.
Buy-side – Buyer invites bids through tender placed on its own site.
Buy-side – Only suits really large buyers, but displaces work to suppliers. Key suppliers
may be missed if unaware of tender. Can specify integration with IT systems.
Sell-side – Effort placed on buyer to find sources. Integration with IT systems potentially
more difficult.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Less staff time involved with procurement requires making staff redundant or re skilling.
Education and training needed to sell system to the staff using it.
Better control of purchasing (reduce maverick purchasing).
Chapter 8
1 Explain the link between e-marketing and e-business and why they may be considered
separately.
2 Outline the stages in a strategic e-marketing planning processes, for each stage noting
two aspects that are of particular importance for e-marketing.
Tactics – how exactly do we get there? 6Ps, in particular, promotion and place
3 What is the Internet contribution and what is its relevance to e-marketing strategy?
An assessment of the direct contribution of the Internet or other digital media to sales, usually
expressed as a percentage of overall sales revenue.
An assessment of the proportion of customers (new or retained) who use the online
information sources and are influenced as a result
This is useful for objective setting, highlighting the importance of the new channel.
4 What factors will govern the Internet contribution that is set for a given organization?
Deciding on the objective can use a form of Kumar or de Kare-Silver test i.e.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
well known local competitors (e.g. UK/European competitors for British companies);
new Internet companies local and worldwide (within sector and out of sector).
Complementary – Internet is additional channel, but less significant than others – high
value products and services with complex buying decision or strong channel.
Replacement – Internet becomes main channel to market for sales and support – typically
lower value product, or straightforward buying decision (commodities).
7 Summarize new opportunities to vary the marketing mix that arise through deploying the
Internet.
8 How can online and off-line techniques be used in the control stage of strategy?
This question is about marketing research aspect of control. Refer to Chapter 12.
Online techniques – server log file analysis, pop-up surveys, e-mail audits
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Chapter 9
1. What are the goals of acquisition and retention in an online context?
Customer acquisition
Obtain leads via e-mail, qualify via profiling and convert to sales
Customer retention
Maintain relationships with existing customers through maintaining a dialogue via e-mail and
web-site
Permission marketing
Interruption marketing
Marketing communications that disrupt customers’ activities, for example, telesales call, and
is not explicitly opt-in.
3. Summarize the main types of online marketing communications for traffic building.
Search engine registration
Link building
Banner advertising and sponsorship
PR
E-mail
Affiliate marketing
Many buying decisions are complex – they are not only made online, but using a combination
of online and offline. To influence the decision companies need to be active both online and
offline in influencing a range of mixed-mode buying scenarios.
Customer extension
See Question 5.
8. What are the management issues in managing data and applications integration in CRM?
Cost of integration
Disruption to service during integration
Data transfer from legacy to new systems
Single vendor or multi-vendor sourcing
Chapter 10
1. Summarize the main types of change that need to be managed during introduction of e-
business.
Education – explain why the system is required by the business and its impact on staff
Initiation
Analysis/market research
Test
System live
Maintenance
Prototyping
Prototyping is an iterative process where web site users suggest modifications before further
prototypes and the live version of the site is developed.
The iterative approach is intended to be rapid and a site can be produced in a period of
months or weeks.
4. No formal structure for e-commerce. Examples: Many small businesses and the
Retail and Engineering Company.
7. What are some of the risks of e-business change, and how can they be managed.
Chapter 11
1 What are the risks if analysis and design are not completed adequately?
Slow performance
Poor security
Process analysis reviews the sequence and speed of events in a business transaction such
as ordering or customer service. Data analysis reviews the data requirements and structure
needed to support this process.
Workflow Management
Workflow Management (WFM) is the automation of information flows and provides tools for
processing the information according to a set of procedural rules.
4 What is legacy data and what are the options for incorporation into an e-commerce
system.
Legacy data is typically from ageing financial, order entry and accounting systems. This old
data is often not integrated and it is difficult to get a single view of customer or financial data.
It is incorporated into e-commerce systems using middleware or enterprise application
integration.
Consist of keys made up of large numbers that are used to uniquely identify individuals.
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Digital signatures
Digital certificates are used to encrypt digital signatures to achieve identification of individuals.
Figure 11.8 shows the notation for actors (people) and use-cases (activities in a sequence).
Customer orientation
Page design
Content design
Chapter 12
1 Summarize how the activities involved with implementation and maintenance relate to
analysis and design activities in previous chapters.
Figure 12.1 on p514 explains this. For a prototyping approach, analysis precedes design
which precedes implementation and maintenance. However, these are repeated
consecutively in the iterative approach of prototyping.
2 What are the risks of launching a new e-commerce site if implementation is not conducted
effectively?
Low conversion rate to outcomes, high attrition rate (due to inadequate testing of design)
Data errors
Security breaches
3 Distinguish between static and dynamic content and methods of achieving them.
It is a web page view that is identical every time it is loaded. This is typically achieved through
static HTML.
It is a web page view that varies according to user preferences or environment constraints.
This is typically achieved through dynamic access of databases according to user
requirements.
4 What are the objectives of testing? How do these relate to an e-commerce site?
Chaffey, E-Business and E-Commerce, Third edition, Instructor’s Manual
Identify errors in requirements analysis, e.g. poor interface design, wrong information or
services available
Channel promotion
Channel behaviour
Channel satisfaction
Channel outcomes
Channel profitability
1 Reduced costs
2 Increased revenue
Tangible costs:
1 Physical costs
2 Planning costs