ICCT Colleges Foundation, Inc.

E-COMMERCE and INTERNET MARKETING (MMPE01)

CHAPTER 5 - ACTIVITY

ESSAY:

Direction: Explain the following statements/question in not less than 5 sentences.

 How could E-University look like? Which effects would it have for all
stakeholders? Who are the stakeholders? Do we still need traditional lectures?

Answer:

There are many stakeholders in higher education including students; alumni; donors;
parents; other institutions or providers; accrediting agencies; vendors and suppliers;
employers; taxpayers; non-government organizations; government; and academic
faculty, both individually and collectively in disciplinary groups and as members of
other organizations such as unions and advocacy bodies. Stakeholder salience is used
as a framework to examine the contested nature of the engagement of these
stakeholders in universities, particularly with regard to Trow’s modes of higher
education. The complex interplay of stakeholder perceptions, values and priorities on
the universities’ activities with regard to cost, quality, access and technology are a
further justification for a sense-making approach by leaders, one that is responsive to
the wicked problem facing the university.

 In many cases the user of an electronic system does not have to pay a fee for the
usage. Is he/she really the customer? Is the service really “free”? What is his/her
role in the business “game”?

Answer:

One interesting thing is that there is a demand by non-traditional players for some say in defining
the rules of the game. Where in the past business and government have obviously had a part in
making the rules, now individual members of the online community are raising serious questions
and refusing to play if these are not answered satisfactorily.

 Does E-Commerce increase or decrease price levels? What are the reasons for
your answer?
Answer:

E-commerce has brought a paradigm shift in the way organizations conduct their business and customers
make their purchases. Right from buying and selling to interactions and payments, everything takes place
in electronic mode. The organizations have crossed geographical borders, and there is more business
happening in the market than ever. There is no doubt that e-commerce has larger and significant impact
on the demand-supply model, logistics sector, customer behavior and economy as a whole across the
globe. The extremely rapid growth of e-commerce retail sales has even changed the price dynamics in the
economy. The primary way in which E-commerce will affect the economy is its impact on productivity
and inflation. The continuous expansion of electronic commerce can lead to downward pressure on
inflation through increased competition.

 Explain the term “externality” and give two examples of this impact.
Answer:
a term used in economics, refers to the costs incurred or the benefits received by a third party,
wherein such a third party does not have control over the generation of the costs or benefits.
The externality can be positive or negative and may arise from the production or consumption
of goods or services.

Examples:
A farmer who grows apple trees provides a benefit to a beekeeper. The beekeeper gets a good
source of nectar to help make more honey. (positive production externality)

If you walk to work, it will reduce congestion and pollution; this will benefit everyone else in the
city.