E-BUSINESS

Module-1
1. What is E-Commerce?
e-commerce can be defined as a process of buying and selling of goods and
services over internet where all transactions are done electronically.
examples are amazon, Flipkart, OLX, Myntra and snapdeal etc..
Here sale happens online so you can potentially sell across the world, there
is limited personal interaction and delivery of goods and services might take
some time. It is available 24/7 and can be done by day and night. e-
commerce is the paperless exchange of business information using
Electronic Fund Transfer(EFT - it used by the banking industry to exchange
account information over secured network), e-mail , fax transmissions and
Electronic Data Interchange(EDI - It is used for e-commerce within
companies to transmit data from one business to another).

2. What is E- business
e-Business refers to all online business transactions including selling
directly to the consumers, dealing with manufacturers and suppliers, and
conducting interactions with business partners. E-business is defined as
"The use of electronic networks for business(usually with web
technology) by Deloitte and Touché Consulting Group. IBM defined
e-business as the transformation of key business through the use of
Internet technologies . e-business or online business means business
transactions that take place online with the help of internet.

3. Difference between e commerce and e-business

 4. Mention the Benefits of e-business
Benefits of e-business:
1. Easy to Setup
2. Cheaper than Traditional Business
3. It helps to reach Global
4. Cost Effective
5. It Reduces the Paper Costs
6. Mass Customization and
Competitive advantage
7. No Middlemen
8. Reduced Production lead Time

1. Easy to Setup:
It is easy to setup an electronic business. You can setup an online
business even by setting at home if you have an online business
even by sitting at home if you have the required software, a device
and the internet.
2. Cheaper than Traditional Business:
Compare to traditional business, e-business required less cost.
3. No Geographical Boundaries:
There are no geographical boundaries for e-business. Anyone can
order anything from anywhere at anytime.
In effect all E-businesses have become virtual multinational corporations.
E-businesses expands the market place to national and international
markets. Internal and web based E-business helps to reach a more
geographically dispersed customers and more business partners as
compared to the traditional business methods.
4. Cost Effective:
It is proved to be highly cost effective for business
concerns as it cuts down the cost of marketing, processing, inventory
management, customer care etc.
It reduces the burden of infrastructure required for conducting business.
It can also collect and manage the information related to the customers
efficiently
5. .It Reduces the Paper Costs:
It decreases the cost of creating, processing,
distributing, storing and retrieving information through the use of FDI
systems.
This greatly cuts on the cost of paper work in terms of the time taken
and the man power required. Also the date is more secure from theft and
destruction.
6. Mass Customization and Competitive advantage:
The web based interactive E-business enables the customization of
products/services as per the
customer needs. This provides a great competitive advantage to
businesses.
For example, a computer manufacturer may be able to supply to
customized PC to a user.
7. No Middlemen:
There is a direct contract with customers in E-business through internet
without any intermediation. Companies can now focus more on specific
customers by adapting different one-to-one marketing strategy.
8. Reduced Production lead Time:
The production cycle time is the time taken by a
business to build a product, beginning with the design phase and ending
with the completed product.
The internet based E-Commerce enables the reduction of this cycle time
by allowing the production teams to electronically share design
specifications and refinement processes.
The reduction in the production cycle time helps to reduce the fixed
overheads associated with each unit produced. This saving in the cost
 production can be passed onto the customer or may be used to achieve
higher profits.

5. List out the benefits of e-business as a customer

Benefits of E-business to consumers:
1. Gives freedom to make choices
2.Increase in variety of goods
3.Ensure Secrecy
4. More Competitive Prices
5.Time compression
6. E-payment system
1.Gives freedom to make choices:
It also gives customers an opportunity to look for cheaper and better quality
products. With E-Business , consumers can search the specific product or
service they require and can even find the direct manufacturer from where they
can purchase products at comparatively less price. Shopping online is time
saving and convenient. In addition to it, consumers also get to see the reviews of
other consumers that will help in making beneficial purchase decision.

2.Increase in variety of goods:

As the market will expand the variety of goods available will also expand.
Wide variety of goods are available than ever before. It provides more choice
and alternatives to customers that will increase the choice of vendors or
products because they are no longer geographically constrained to reach a
vendor or a product. A large number of vendors/manufacturers are marketing
and selling their products/services on the internet. Virtual shops can offer the
consumers a large number of products/services at a single site.
3.Ensure Secrecy:
The various security measures that are in built are used in E-Commerce
transactions to prevent any unauthorized access to information on the internet
for ensure secrecy they maintain encoding, encryption and passwords.
4. More Competitive Prices:
The large amount of information available on the internet is giving more and
more power to the consumers. Consumers can make comparison shopping.
There are several online services that allow customers to browse multiple
ecommerce merchants and find the best prices. Consumers can have access to
large amount of information online on products and services, their features and
prices. This further translates into more choice to customers in shopping and
greater price comparison opportunities.
5.Time compression:
Time is not a factor with Internet communication between firms and their
stakeholders. Online stores can be open 24/7; people can communicate as their
schedules permit.
6. E-payment system:
The electronic payment system on the internet is facilitated by payment
gateways or intermediary between the business firm and customers

6. What are the benefits of e commerce to the society as a whole

Benefits of E-Commerce to Society:
1.Enables More Flexible Working Practices
2. Connects People
3.Facilitates Delivery of Public Services
1.Enables More Flexible Working Practices:
Which enhances the quality of life for a whole host of people in society,
enabling them to work from home. Not only is this more convenient and
provides happier and less stressful working environments. It also
potentially reduces environmental pollution a fewer people have to travel
to work regularly.

2. Connects People:
Enables people in developing countries and rural areas to enjoy and
access products, services, information and other people which otherwise
would not be easily available to them.
3.Facilitates Delivery of Public Services:
The health services available over the Internet on-line consultation with
doctors or nurses.
7.What are disadvantages of using e commerce
DISADVANTAGES OF ELECTRONIC BUSINESS:
1. Lack of Personal Touch
2.Delays Goods
3. System scalability
4. Dependent on internet
5. Many Goods Cannot Be Purchased Online
6.Too Many Competitors
7. Security
1.Lack of Personal Touch:
One can not touch or feel the product. So it is difficult for the consumer
to check the quality of a product.
2.Delays Goods: E-Business websites deliver to take a lot longer to get the
goods into consumer hands.
3. System scalability:
It means regular up graduation of the website is required when the number of
website users increase over period of time or during busy seasons. As a result
of rush of enquiries on the companies site, it might cause slow down of the
system performance and eventually loss of customers.
4. Dependent on internet:
E-Business is dependent on internet. Mechanical failures in the system can
cause unpredictable effects on the total processes. Furthermore, there are many
hackers who look for opportunities, and thus an ecommerce site, service,
payment gateways; all are always prone to attack.
5. Many Goods Cannot Be Purchased Online:
There are goods that consumer cannot buy online. Most of these would be in
the categories of “perishable” or “odd-sized”. There are various products
which the customers would like to first touch and feel and then buy it.
For example: It cannot touch the fabric of the garment when consumers wants
to buy and consumer cannot “test” the perfume that consumer want to buy.
In many cases, customers want to experience the product before purchase.
Ecommerce does not allow that.
6.Too Many Competitors:
If there are thousands of online stores selling similar products, how company
can attract visitors, As the technology has boomed the competition is increasing
because more and more people are opening their businesses on internet.
7. Security:
When making an online purchase consumer have to provide at least credit card
information and mailing address. In many cases ecommerce websites are able to
harvest other information about our online behavior and preferences. This
could lead to credit card fraud, and identity theft.
8. Name some of the technologies used in e-business
e-Business Technologies:
1. Internet(Intranet and Extranet)
2. Multimedia
3. EDI(Electronic Data Interchange)
4. EFT(Electronic Fund Transfer)
5. Web Architecture
6. e-payment
7. Water marking
8. Web Application
9. mobile Application

Multimedia:
Multimedia is a communication media with multiple
contents like video, audio, text data, animations, images and graphics
etc..
Information distribution and messaging technologies
provide a transparent mechanism for transferring information
content over a network.
That implement FTP,HTTP and Simple Message Transfer
Protocol(SMTP) for exchanging multimedia contents. The
information distribution protocol , HTTP (Hypertext Transfer
Protocol) delivers the documents written in HTML to the client
program.
The language offers an easy way for integrating
multimedia content, residing in a variety of computers
connected on the internet. It is possible to integrate the
multimedia content in a document form.
 Clients can make requests for the published information residing on
HTTP servers. The server respond to request by locating and
delivering the HTML document or error message to the client.
The client programs also known as browsers, parse and render the
delivered HTML documents on the screen of the client machine.
The HTML is tag-based language and provides a rich set of tags that
are used for designing the page layout, embedding multimedia objects,
hyper linking documents residing on the same as well as other internet
connected machines.
Electronic Fund Transfer(EFT):
It is a very popular electronic payment method to transfer money from
one bank account to another bank account. Accounts can be in same
bank or different bank. Fund transfer can be done using ATM
(Automated Teller Machine) or using computer.
Now a day, internet based EFT is getting popularity. In this case,
customer uses website provided by the bank. Customer logins to the
bank's website and registers another bank account. He/she then places
a request to transfer certain amount to that account.

Customer's bank transfers amount to other account if it is in same

bank otherwise transfer request is forwarded to ACH (Automated
Clearing House) to transfer amount to other account and amount is
deducted from customer's account. Once amount is transferred to
other account, customer is notified of the fund transfer by the bank.
Electronic Data Interchange(EDI):
Electronic Data Interchange (EDI) describes the exchange of
documents between organizations in standardized electronic form
directly between computer applications.
Many routine and procedural processes between organizations are
automated and completed electronically by using EDI.

Purchase orders, invoices and material releases are just some

examples of these processes where EDI can result in cost savings and
increased efficiency. Another advantage of EDI is the standard format
of communication between organizations.

9. What are some benefits associated with EDI

The key benefits associated with EDI:
1.Lower costs in administration and processing
 2.Lower costs in posting and preparation of
transactions
3.Increased efficiency in transaction processing
4.Eliminating paper-handling tasks
5.Reducing errors
5.Quick exchange of documents which reduces the
business cycle
6. Lower inventory costs
7.Increased customer service.

10.Explain client server architecture in detail

Client-server architecture is a distributed application structure that
partition tasks or workloads between the providers of a resource or
services called servers and service requesters called clients. In this
architecture clients send request to the server and server send response to
the client. A server may serve multiple clients at the same time client
contacts with only one server.
It is a general purpose architecture where client request for any kind of
resource or data to the server, both client and server are connect to each
other via internet. Server intercept the request, process it and fetch the
data from the database and send it to a client in the form of response.
There are 3 tiers in client server architecture
1- Tier
2- Tier
3- Tier
1 - Tier Architecture:
In this architecture , the client, server and database all reside on the
same machine. Anytime you can install a database in your system and
access it to practice sql queries it is one tire architecture.
for example while creating a web application by java programming
language we have install apache server and mysql database within our
machine to run our web application. We don`t need extra physical
server and database outside our computer.
2-Tire architecture:
In this architecture , presentation layer runs on client and data is stored on a
server, client send a request for data or resources to server and server process
that request and response back to the client. the communication between the
client and server in the form of request and response object. The major
drawback of this structure is if the client nodes are increased beyond capacity in
the structure then the server is not able to handle the request overflow and
performance of the system degrades.
3 - Tier Architecture:
In this architecture has three layers namely client, web/application server and
data layer. The client layer requests the information, the application layer acts as
an interface between the client and data layer. It helps in communication and
also provides security. The data layer is the one that actually contains the
required data. Application layer is also called as business logic layer that
processes functional logic constraint and rules before passing the data to the
user Three tire architecture is the most popular dbms architecture, the main
goal of the three tire architecture is to separate the user applications and
physical database .
11. What is e payment system, explain the components and mention
advantages and disadvantages of e payment system.
Electronic Payment System :
Electronic payment is defined as a financial exchange that takes place online
between buyers and sellers. An e-payment system is a way of making
transactions or paying for goods and services through internet by using
electronic medium. It is the way of paying for a goods or services
electronically, instead of using cash or cheque . E-commerce payment
systems have become increasingly popular due to widespread use of the
internet based shopping and banking. E-payment refers to paperless
monitory transactions.
Major Components in Electronic Payment System:
Issuers:
Issuers can be banks or non-bank institutions.
Customers:
Customers are referred to users who spend e-cash
Merchants or traders:
Merchants are vendors who receive e-cash
Advantages of e-payment system:
1. Time Saving:
Money transfer between virtual accounts usually takes a few minutes, while
a postal one may take several days. Also, you will not waste your time
waiting in lines at a bank or post office.
2. Expenses Control:
The virtual account contains the history of all transactions and the amount you
spent and you can check it anytime you want.
3. Reduced risk of loss and theft:
You can not forget your virtual wallet somewhere and it can not be taken
away by robbers.
4. Convenience:
All the transactions can be performed at any time, any where. It is
enough to have an access to the Internet. This enabled to sell and buy
products or services through online.
5. Low Labour Costs:
Since online payments are usually automatic, they have lower costs than
manual payment methods such as cheque, money order, cash and so on.
Disadvantages of e-payment system:
1. Restrictions:
Each payment system has its limits regarding the maximum amount in the
account, the number of transactions per day.
2. The risk of being hacked:
Cyber criminals can hack the online payment methods to steal people`s
money or information.
3. The necessity of Internet access:
If Internet connection fails, you can not get to the online account.
4. Service Fee:
Payment gateway and third party payment processors charge service fees.
12.What are various types of business models
E-Business Model:
There are many different ways to categorize e-business models, they can
be broadly classified into
1. E-Business models based on the relationship of Transaction Parties
2. E-Business models based on the relationship of Transaction Types
E-business model based on Transaction Parties or partners:
1.B2B(Business to Business)
2.B2C(Business to Consumer)
3.C2B(Consumer to Business)
4.C2C(Consumer to Consumer)

1.B2B(Business to Business)
This is business to business transactions here the companies are doing business
with each other. The final consumer is not involved in this business transaction.
It describes the business transaction between businesses such as between
manufacturer and wholesaler or between wholesaler and a retailer.
2.Bussiness to Consumer(B2C)
Here the company will sell their goods or services directly to the consumer.
Sellers that use B2C business model can increase their benefits by eliminating
the middleman.
3. consumer to consumer(C2C):
C2C e-business consists of individuals using the internet to sell products
and services directly to other individuals. One person will sell his used
product and other person can directly buy that product. Generally these
transactions are conducted through a third party, which provides the online
platform where the transactions
are carried out
Ex: OLX, eBay
4. Consumer to Business(C2B):
C2B is an e-business model in which consumers offer products and
services to companies and the companies pay them. It is considered as
an inverted business type.
13.E-business model of transactions
E-Business Models Based on Transactions Types:
1. Brokerage
2. Aggregator
3. Info-mediary
4. Community
5. Value chain
6. Advertising
1. Brokerage Model:
The brokerage model brings together th buyers and sellers and facilitates
transactions. It is a virtual market space enabled by the internet and
provides the meeting point for the buyers and sellers. Brokers are market
makers, they bring buyers and sellers together and facilitate transactions.
Three types of transactions may occur between the buyers and sellers in
a brokerage model are i) Business to Business(B2B) 2. Business to
Consumer(B2C) iii) Consumer to Consumer(C2C).
A broker makes its money by charging a fee for each transaction it
enables. The key principle of brokerage mode is price discovery
mechanism. this price discovery mechanisms are two types
a) e-auction b) Market Exchange
a) e-auction:
An e-auction is a transaction between sellers and bidders that takes place
on an electronic market place. It is an electronic commerce which occurs
between B2B, B2C or C2C. The auctioneer offers his goods, commodities
or services on an auction side on the internet. Interested parties can
submit their bid for the product to be auctioned in certain specified
periods. The auction is transparent all interested parties are allowed to
participate the auction in a timely manner.
b) Market Exchange:
A market exchange is a highly organized market in which goods and
services are produced, distributed, and exchanged by the forces of price,
supply and demand.
2. Aggregator Model:
An aggregator model is an e-commerce business model where a firm,
known as an aggregator, collects data pertaining to goods and services
offered by several competing websites or application software and
displays it on their own website. They bring together the buyers and
sellers. They are the connectors between the buyers and sellers. Typically
an aggregator does not possess any manufacturing or warehousing
capability, but the strength relies on its ability to create an environment
that allows visitors to conveniently match prices and specifications of
products and services.
Types of Aggregators:
1. Content Aggregators: They are large scale sites that provide rich
contents to attracts. They provide extensive statistics and elaborate analysis
about product and services.
2. Mainstream Aggregators:
They provide search engines along with a bunch of attractive tools like
email, remainders , online chats etc. They have an easy to remember url
ex: www.google.com,
3. Event Aggregators:
These are sites that provides in depth content and tools tailored to the
needs of a particular group. Ex: ixigo provides detailed information about
trains and railway.
4. Shopping Aggregators:
They help consumers to go through e-commerce sites and compare
products and price. Ex: compare.com.
Infomediary Model:
An infomediary collects information about consumers and their
consumption habits and sell these information to marketing companies.
They also provide information about producers and products to
consumers.
Informediaries generate revenue from sellers and not from the customers.
Some firms collect a membership fee from customers for providing
information about producers and products.
Based on the relationship with sellers and buyers informediaries are
classified into four types:
1. Specialize Agents: They have closed relation with buyers and sellers
and charge fee for information.
2. Generic Agents: They maintain open relation with sellers and
customers and service is provided free of cost. Ads is their revenue.
3. Supplier Agents: They supply information with the vested interest of
selling their affiliated company`s products.
4. Buyers Agents: They establish relationship with a core set of buyers.
Value Chain Model:
Value Chain Model helps an organization to link its business partners
suppliers and others to the network and create a centralized online
system to make the organization more competitive.It extends outside the
company and connects different categories such as suppliers and
customers. The basic goal of value chain model is to facilitate
interaction among all members of the supply chain. It will result in
uninterrupted production and customer satisfaction.
Advertising Model:
The web advertising model is an extension of the traditional media
broadcast model. The banner ads may be the major or sole source of
revenue for the broadcaster. The advertizing model works best when the
volume of viewer traffic is large or highly specialized.
Advertizing model includes: Search Engine Portals, Classifieds , User
Registration Content-based sites , Contextual Advertising.
14.Elaborate how internet is used to do business?
How do businesses use the internet:
1. Buy and Sell
2. Checking Customer Interest
3. Advertising
4. Online Shopping
5. Online Services
6. Online Banking
1. Buy and Sell:
One of the basic uses of the internet for businesses is to sell products and
services. Businesses create e-business websites to sell anything from cell
phone.
2. Checking Customers Interest:
Business owners use the internet to monitor customer purchasing trends
and interests.
To discover what everyday people think about a particular product or
service, business owners can visit online social networking sites and
message boards. Taking in this feedback helps business owners make their
products better.
3. Advertising: Business also use the internet to find new customers
through online advertising. Offering text and banner adds on websites as
well as information, the internet allows advertisers to reach potential
customer quickly and efficiently. Pay-per click advertisements are
distributed on internet search engines and websites, allowing business
owners to reach potential customers using search terms related to their
business.
4. Online Shopping:
It is a form of electronic business which allows consumers to directly
buy goods or services from a seller over the internet using a web
browser.
Consumers find a product of interest by visiting the website of the
retailer directly or by searching among alternative vendors using a
shopping search engine, which displays the same products availability and
pricing at different
e-retailers.
Customers can shop online using different computers and devices,
including desktop computers, laptops, tablet computers and smart phones.
5. Online Services:
A commercial service that provide access to services such as the internet,
e-mail, news etc. An online service provider may be a local, international or
global company who specializes in online services or allows you to
connect to online services through their network.
15.How internet is currently being used in field in business?
Current uses of the Internet in business:
1. Sharing Company Information
2. Product Information
3. Country Investment Information
4. Online Booking Systems
5. Buying Stocks
1. Sharing Company Information:
Commercial companies are now using the internet for many purposes.
One of the first ways that commercial companies used the internet was to
share information with their employees.
There is also some information which is private and access is restricted,
only company employees can get access to this.
2. Product Information:
Some companies use internet to share the
information of their product. Their product information on a web page.
The internet provides an easy and efficient way for companies to
distribute product information to their current and potential customers.
3. Country Investment Information:
If anyone is thinking about investing in a particular country. Information
on countries can be online. For example they check out the graphical
information(GDP, inflation, FDI (Foreign Direct Investment)etc .. )
4. Online Booking Systems:
An Internet Booking Engine(IBE) is an application which helps the travel
and tourism industry support reservation through the internet.
It helps consumers to book flights, hotels, holiday packages, insurance and
other services online.This is a much needed application for the aviation
industry as it has become one of the fastest growing sales channels.
5. Buying Stocks:
Stock market is very much dependable on the internet. People buy or sell
stocks(shares) online by using internet. They can analyze market online
and they can observe the market.
16. Analyze different implications concerning E-business.
Administrative Implications:
1. Security and privacy concerns
2. Lack of trust in Electronic Business
3. Many legal and public policy issues, including taxation,
4. National and International government acts
5. Some customers like to feel and touch products.
6. People do not yet sufficiently trust paper less, faceless transactions
7. There is an increasing amount of fraud on the internet
Technical Implications:
1. There is a lack of universally accepted standards for quality, security
and reliability.
2. The telecommunications band width is insufficient.

Module-2
E-Business opportunities
1. What are different types of business?
Types of Business:
1. Service Business.
2. Trading Business.
3. Manufacturing business.
4. Hybrid Business.
1.Service Business:
 A service type of business provides products with no physical
form. Service type forms offer professional skills, expertise, advice
and other similar products.
For example: Schools, banks, accounting firms and law firms and
mechanical shops etc...
2.Trading Business:
This type of business buys products at wholesale price and
sells(same article) at retail price. They are known as "Buy and Sell"
business. They make profit by selling the products at prices higher
than their purchase costs.
A trading business sells a product without changing its form. For
example grocery stores, convenience stores, distributors and other
resellers.
3.Manufacturing Business:
A manufacturing business buys products with the intention of using
them as a materials in making a new product. Thus there is a
transformation of the products purchased.
A manufacturing business combines raw materials, labor and
factory overhead in its production process. The manufactured goods
will then be sold to customers.
4.Hybrid Business:
Hybrid business are companies that may be classified in more than
one type of business.
2. Discuss about various forms of Business.
Forms of Business:
1. Sole Proprietorship
2. Partnership
3. Limited Company
4. Corporation
5. Cooperative.
6. Franchising
1. Sole Proprietorship:
The sole proprietorship is a business owned by only one person.
It is easy to set up and is least costly among all forms of
ownership.
features:
1. Individual ownership
2. Unlimited Liability
3. Undivided Risk
4. Freedom in Selection of business.
2. Partnership:
A partnership is a business owned by two or more persons who
contribute resources into the entity. The partners divided the profits
of the business among themselves.
3. Limited Company:
Every limited company has a shareholders. The term limited
company refers to the fact that if the company goes into debt each
shareholder risks losing only the amount he has invested and his
personal belongings are safe and can not be touched.

Before getting into the details about pvt ltd company let us
understand about the term limited.
limited company limits the liability of whatever losses that occur in
the business and that do not impact the private assets of owners or
investors
so this limited companies can be either a private limited
companies or public limited companies.
private ownership don`t issues shares to the public , pvt limited
company is identified by its name, number of members formation
etc. Ministry of corporate affairs is the governing body in India
which regulates all private limited companies
Public Ltd company:
Limited company has unlimited shareholders which means that
company should be listed in National Stock Exchange to allow
public to buy or sell their shares. this type of company can issue
shares to the public .

shares can also be bought by government body either central or state

government. If government buys 51% or more shares than the
government manages and regulates operations of that company then
that company comes under public sector company.
The owners of the company are called shareholders, they are
limited liability. The Public Limited Company`s shares must be
tradable on stock exchange.
4. corporations:
A corporation differs from a sole proprietorship and a partnership
because it is a legal entity that is entirely separate from the parties
who own it.
Corporations are owned by shareholders who invest money in the
business by buying shares of stock. The shareholders elect a board
 of directors, a group of people who are legally responsible for
governing the corporation.

5. Cooperatives:
Autonomous and duly registered association of persons with a
common bond of interest, who have voluntarily joined together to
achieve their social, economic and cultural needs and aspirations by
making equitable contributions to the capital required.
6. Franchising:
A franchise is a business established by one person who buys the
copyrights of another firm and is allowed to produce and distribute
the product.
3. How does innovation benefit business? Explain.
Innovation in Business:
Innovation: Innovation, refers to modernization and improvement over
an existing idea. Innovation doesn`t simply mean the creation of new
things but it also refers to the process of uncovering new ways to do
same thing. It leads to the introduction of new ideas, designs, products,

services, methods or devices etc. It is the implementation of new

ideas at the
Individual , group or organizational level. It is a process of intentional
change made to create value by meeting opportunity and seeking
advantage.
creativity:
creativity is the ability to come up with new ideas and to identify new
and different ways of looking at a problem and opportunities.
Some Basic Features of Innovative Organization:
Any business organization is said to be innovative if it has following
these features.
1. Resilience
2. Renewal
3. Revolution
1. Resilience:
Resilience from the context of business is the capability of an
organization to recover from the negative market conditions like
recession, crisis or economy downturn
2. Renewal:
Renewal refers to the rethinking and changing the existing business
model to make it valid with the current market conditions.
3. Revolution:
A business organization is said to be revolutionary if it has a
capability to bring disruption in the existing industry market
conditions.
4. List the types of innovations.
Types of Innovations:
1. Product Innovation
2. Process Innovation
3. Service Innovation
4. Sustaining Innovation
5. Disruptive I1. Product Innovation:
Launching new or improved products on to the market.
Improving a products features or benefits for its consumers in the
form a product perceived as new
2. Process Innovation:
Doing what is already done, but better, cheaper, quicker , easier ways
to run a business.
3. Service Innovation:
New services you can offer customers often
intangible so harder to sell can complement product innovation.
4. Sustaining Innovation:
Sustaining innovation tries to sustain with the
changes in the market, by targeting the demands of high-end
customers with better performance.
Sustaining innovations are breakthrough products, in their operations,
technology and application.
 example: Apple products
like iPad, iPhone.
5. Disruptive Innovation:
Disruptive innovations are those that introduces the products that are
simpler, cheaper , easier and appeals to less demanding customers.
Disruptive innovations do not bring any breakthrough but they
introduce a less expensive products under same category.
5. Explain the benefits that an organization experience through it’s
innovations.
Organizational Benefits of innovation:
Managers encourage and support innovation because of the value it can
provide to the organization. Innovative employees are the best resources
for organization, who are highly motivated. Managers who support
innovation can see the result in the form of new innovations and profit.
Innovation can help in many business and management aspects.
6. Give a brief on various elements of e-business.
Elements of the e-business:
1. Value Proposition
2. Revenue Model
3. Market Opportunity
4. Competitive Environment
5. Competitive Advantage
6. Market Strategy
7. Organizational Development Management Team.
1. Value Proposition:
A value proposition defines, how a company`s product or service
fulfills the needs of customers to develop and analyze a firm`s
value proposition, you need to understand why customers choose to
do business with you instead of other company or a firms that
offers the things that the other firms cannot provide.
when you want to start up your own business
for example you are a business of selling something online like
cloths or jewelry or the gifts
so think of the series of others B2C website in such industry or
in the particular areas that you are going to join in the value
proposition is the heart of his business model.
A value proposition defines, how a company`s product or service
fulfills the needs of customers to develop and analyze a firm`s
value proposition, you need to understand why customers choose to
do business with you instead of other company or a firms that
offers the things that the other firms can not provide, From the
consumer point of view successful e-business value propositions
include personalization and customization.
For example the personalization and customization is ability to
product and services to the particular customer need
So value proposition is the essential articulation of the values at
any organization where the business provides to its customers ,
lots of people talk about value propositions in different ways,
commonly it describes the collection of products and services a
business offers to meet the needs of its customers,
it also includes the ways in which those products and services are
different from competing offers.
2. Revenue Model:
How will you earn the money ?
A firms revenue model describes how the firm will earn the
revenue or money,
generate profits and produce a superior return on investment capital.
Revenue models including advertising revenue model (ex: Google and
yahoo), subscription revenue model(netflix and apple music ),
transaction fee revenue model(eBay), sales revenue model(amazon)
and affiliate revenue model(my points, they can earn the money
from suggesting the customer from this web site to the other website
and amazon affiliate program is quite a popular )
3. Market Opportunity:
what market space do you intend to serve?
Market opportunity refers to the companies intended market space
and the overall potential financial opportunities available to the
firm in that market space
the market opportunity is usually divided into smaller market niche.
the realistic market opportunity is defined by the revenue potential
in each of the market niche in which company hopes to compete.
4. Competitive Environment:
who else occupies your intended market space?
It refers to the other companies selling similar products and
operating in the same market space,
Competitive environment for a company is influenced by the
several factors , how many competitors are active, how large their
operations or what the market share of each competitor is including
the direct and indirect competitors , competitors profitability and
competitors pricing
these are the questions you must answer when you analyze your
competitive environment.
5. Competitive Advantage:
Firms achieve a competitive advantage when they can produce a
superior product and/or bring the product into the market at a
lower price than most of all the competitors,
some firms can develop a global markets while the other firms can
develop only a national or regional market.
firms can provide superior products at the lowest cost on a global
basis are truly advantageous.
If company has the first mover then that company will get first mover
advantage

for example that the market needs and you are the first mover in the
market niche. you will have the first mover advantage with the
complimentary resources.
companies are said to leverage their competitive assess when they
use their competitive advantage to achieve more advantage in
surrounding markets
for example amazon`s move into the online grocery business,
leverages the company`s huge customer database
6. Market Strategy:
How do you plan to promote your products or services to attract
your target audience?
To promote your company`s products and services to potential
customers is known as marketing.
Market strategy is a plan you put together that details exactly how
you intend to enter a new market and attract new customers
for example twitter, you tube and pintrest have a social network
marketing strategy that encourage users to post at their content for
free or they can be called user contributed content and they build
personal profile pages, the customers and the users build personal
profile pages, contact their friends and build community,
In these cases the customers become part of the marketing staff and
that's the reason why the
 you tube, twitter, facebook and pinterest are called as the user-
generated content or user-contributed content

7. Organizational Development:
Organization and Development is a plan that describes how the
company will organize the work that needs to be accomplished.
Typically work is divided into functional departments
For example, for the startup business, work is divided into functional
departments such as production, shipping , marketing, customer
support and finance, jobs within these functional areas are defined
and then recruitment begins for specific job titles and responsibilities.
8. Management Team:
What kind of backgrounds should the company`s leaders have?
Management Team responsible for making the model work, a
strong management gives a model instant credibility to outside
investors.
5. Explain the role of e-business management in the context of Domestic and
international business.
National and International businesses:
Domestic Business:
The business transaction that occurs within the geographical limits of the
country is known as domestic business. It is a business entity whose
commercial activities are performed within a nation.
Domestic business known as internal business or some times as home
trade. The producer and customers of the firm both reside in the country.

In a domestic trade, the buyer and seller belong to the same country
and so the trade agreement is based on the laws and customs that are
followed in the country.
There are many privileges which a domestic business enjoys like low
transaction cost, less period between production and sale of goods, low
transportation cost and encourage small scale enterprises etc.
Production and marketing facilities are located at home only, surplus
may or may not be exported
For example : If you are having 1lac production in 2022 but you have a
demand 50000 products in India what you will do remaining 50000
products, those products are excess in India, so other 50000 products
you can use it for export to other countries there are no overt export
efforts to develop foreign markets that means these companies doesn`t
have thought about to enter into international market
Features:
1. Their focus remains with domestic market
2. Their production facilities remains based in home country
Their analysis is focused on the national market
3. They do not think globally and avoid taking risk in going global
4. Their top management may have traditional kind of business
management competency and less global expertise
5. They try to play safe and satisfied with whatever gains they are
getting in domestic market.
International Business:
International business is one whose manufacturing and trade occur
beyond the borders of the home country . All the economic activities
indulged in cross-border transactions comes under international or external
business.
It include all the commercial activities like sales, investment, logistics etc..
in which two or more countries are involved.
The company conducting international business is known as a
multinational company Just extension of our domestic products to foreign
market is not sufficient , we have to set up some branches in the foreign
countries, that thought gives us the scope for establishment of the MNCs
like establishing the branches of foreign countries. there are so many
Multi national companies are in India for services and product
manufacturing also.
Features of MNC`s:
1. you are going global, In more than one country that is why it is called
as multi national company
so more than one country your business is going to set up
2. according to the foreign consumers preferences you have to change
your market strategies
3. one strategy will not work for all, so in the same way different
countries having different marketing strategies
so one country market strategy should not work for all other countries
market
6.Explain E-business architecture application framework
E-business Architecture Application Framework :
Business Architecture is a blueprint of the enterprise that provides a
common understanding of the organization and is used to align
strategic objectives and tactical demands.
Software:
Software is a set of instructions that perform specific task. It interacts
basically with the hardware to generate the desired output.
Software is classified into two types
1. System Software.
2. Application Software.

Interaction management framework :

This is a model view controller framework. This frame work support two
kinds of clients : browser clients and program clients.
MVC Stands for Model View Controller it is an architectural pattern. It
divides a software application into 3 parts those are
1. Model
2. View
3. Controller
Integration Application framework:
These hosts adapters for xml based enterprise application integration these
adapters integrate enterprise applications in context of business process.
7.Give an outline on the evolution of sales process and sales
management.
Definition: Sales management includes recruiting, selecting, training ,
supervising , motivating and evaluating the sales force.
1. Pre-industrial revolution period:
In this period Sales and marketing was never a serious problem in
those days since demand far exceeded supplies.
Selling was only a part-time job for these entrepreneurs. This job is
mostly confined to demonstration or display of their craftsmanship.
2. Production Oriented Period:
The main focus was on the production of goods.
After the industrial revolution(1760) in UK and the American
industrial revolution in the USA, large-scale manufacturing
organizations started dominating the economy.
The main focus was on the production of goods. So mass production
technique introduced during this period
3. Sales Oriented Period:
In this period, what was believed that the goods will not be sold by itself
, it has to be pushed in the market.
So the focus shifted from production to the sales and marketing aspects
Marketing means -- "Product does not sell by itself- It has to be pushed
in the market" . Customers are to be manipulated.
Environment is highly competitive where supplies are in excess and
production capacity is more.
4. Customer-Oriented Period:
In this period, focus is on "Customer Satisfaction". Emphasis is on
problem solving on customer needs and wants to achieve customer
loyalty.
Marketing means -- customer satisfaction before , after and during the
sales. Environment is that of "buyers market" having severe
competition.
8.Define various roles performed by sales department.
Roles of the Sales Department:
1. Goal Setting
2. Fixing up the sales quota
3. Product Pricing and Distribution
4. Customer Service
5. Promotions
6. Sales Forecasting
7. Co-ordination
8.Managing the Sales-Force
1. Goal Setting:
The company`s goals and targets are set by the sales and marketing
departments. Future sales targets are predicted with the help of
previous sales figures and expert`s estimates.
2. Fixing up the sales quota:
Each salesman is given a fixed sales quota. A sales quota or target is
a goal to be achieved with in a specific time period.
The goal is set( by some metrics) in terms of product units sold or
selling activities. So the time period to achieve this target can be a
month, a quarter, six months or a year.
3. Product Pricing and Distribution Planning:
The customers are contacted by sales or marketing managers, Product
or service development is done with the help of the customers
feedback, so the prices of products or services are also decided by
the sales department.
They are also supposed to plan the distribution, this includes
selecting the right wholesalers , distributors and retailers.
4. Customer Service:
Satisfaction of customers is needed to maintain a customer base, this
is taken care by the sales department.
The department actively contacts customers for surveys or special
offers, it also has to react to customers problems in order to keep
them loyal to the organization.
5. Promotions:
Promotion is done through advertising , public relations , event
management , discounts , sales promotions and contests etc..
The department decides how products or services will be promoted
to increase sales.
6. Sales Forecasting:
The estimation of future sales by a company is known as sales
forecasting. The sales department has to predict customers locations
and how much they will buy. The department also predicts the
maximum demand for a product or service and how much the firm
can sell in a specific time period.
7. Co-ordination:
The Sales Division has to co-ordinate with other departments.
For example:
Sales and Distribution department have to work together to make the
product available at the right time and place. Sales and production
department must also co-operate. They have to make sure there are
enough products in the inventory at all times. Customer feedback is
used to make changes to products.
This is done by the sales department along with the help of the
Research and Development Department.

9. Name the steps involved in Order acquisition process

Order Acquisition Process:
1. Identify Potential Customers
2. Understand Customer Needs
3. Obtain more information from the customers
4. Develop Alternative Scenario
5. Select Product Configuration
1.Identify Potential Customers:
organizations record all the interactions that occur with their
customers through various channels and generate prospective
customers,
what the organizations will do after identifying the prospective
customers.
They send customized messages and product information to the
prospective customers and convert them into potential customers so
this is the first step involved in the order acquisition
Determine Price and Delivery Terms.
2. Understand Customer Needs:
Understanding the needs of the customers.
Once the potential customers are identified, the organizations try to
understand the customers requirements .
incase the products are technically complex, technical sales
specialists may be appointed by the organization to discuss with the
customers and identify their exact needs this is how the
organizations understand the needs of the customers.
3. Obtain more information from the customers:
The technical sales specialists extract required information from the
customers and if necessary additional information is obtained to
understand the exact product specification decide by them.
4. Develop Alternative Scenario:
Technical specialists handle all the technical specifications to the
production department,
 the production manager studies the feasibility of the manufacturing
that particular product.
If it is feasible to manufacture the product , the product department
goes ahead to this manufacture.
if the design is not feasible or if the company can not produce such
a product , matter is conveyed to the technical specialists then what
the technical specialists will do they and the production
team sit together and develop alternate solutions.
5. Select Product Configuration:
In this stage , the alternate solution and the possible product
configuration are present to the customer , the customer choose one
of the solutions or attempts to form a new configuration with the
help of the production team,
after finalizing the product configuration the production department
prepares the production schedule also
6. Determine Price and Delivery Terms:
In this stage the accounting department calculates all the costs
involved in production and estimates shipping cost and determines
the price of the product , the marketing and the logistic departments
work on delivery terms, they determine the best mode of
transportation to be used to deliver the product in the shortest
possible time to the customer

10.Explain selling chain infrastructure.

Selling Chain Infrastructure: other area in selling chain management is
selling chain infrastructure or components. so components necessary to
carry out the selling chain activities effectively.
each of the components in the selling chain infrastructure are automated
separately and then the companies will integrate all these applications
together.
Selling Chain Components are:
1. Product Catalogs
2. Sales Configuration System
3. Price Maintenance System
1.Product Catalogs:
In the past(In the traditional business), physically people has to go to retail
store or departmental store and asked the sales staff regarding the latest
products or upcoming future products, but now people want convenience
they want to obtain the up-to-date information.
In e-business the companies have started mailing the product catalogs to
the customers,
( they making them available on their websites).
2.Sales Configuration System:
The process of selling customized products consume more time and effort
than that of the standard products.
sales people need to obtain information about the product configuration,
delivery schedules etc . as sales people are not technical experts they may
face problems in getting the correct configuration details about the
product from the customers, this force them to concern technology experts
Price Maintenance System:
Many companies deal with different levels of customers those are
distributors , dealers , wholesalers and retailers ( distribution channels and
product lines), the prices charged by the companies varies from customer
to customer and market to market , They offer more rebate to the
distributors and resellers who handle large volumes
Business Forces Driving Electronic Selling Chain Management:
what are the business forces which drives the organization to implement selling
chain management.
1. Self Service Order
2. Cost of Pre-sale Technical Support
3. Cost of order errors
4. Complexity of Products
1. Self Service Order:
In any online business, customers has to place the order to purchase any
product.
They want to specify the configuration of the products with their specific
needs and demands, they also demand high quality customer service and
speedy delivery of products,
this compels the organization to implement selling chain applications.
2. Cost of Pre-sale Technical Support:
for example company introduced a new product, sales people doesn`t know
about the features of new product they need some technical assistance.
If the sales people needs the support of the technical experts, the company
can hire it ,
it is expensive to the company and it increases the cost.

3. Cost of order errors:

As the customers demand, customized products to be delivered fast, here the
chances of committing errors in the sales and delivery cycle have
increased ,
in order to eliminate or to decrease the errors in the process of ordering,
companies are automating their processes and integrating their selling
chain management applications with the back office systems .
so In order to reduce errors, the organizations adopt selling chain
management applications.
4. Complexity of Products:
Customers change their preference from time to time therefore companies
need to develop new products on a regular basis and provide to the
customers , the information of the product is to be provided by the sales
people ,
so in order to increase the efficiency and effectiveness of the sales
people, the organizations adopt modern techniques of selling chain
management.
All these are the business forces driving is the selling chain management .
Benefits of selling chain management:
1. sales force automation(the automation of sales force)
2. It helps the company to manage any unpredictable growth and demand
(because all the activities are automated)
3. Increased customer loyalty (proper selling chain activities helps in increasing
the customer loyalty)
4. It also help in use of data warehouse technology
5. It also improve the future revenues.
6. It provides one to one solutions to customer requirement and also
developing and managing client relationships

Module-3
Customer Relationship management

11. What is CRM

Customer Relationship Management(CRM):
CRM is a term applied to processes implemented by a
company to handle its contact with its customers. CRM covers
methods and technologies used by companies to manage their
relationships with clients.
It is not only the responsibility of customer service
group or IT team. It touches all major part of an enterprise. The
processes involved in CRM, It includes the capture, storage and
analysis of customer information.
The data gathered as a part of CRM must consider
customer privacy and data security. Customers
want the assurance that their data is not shared with third parties
without their consent and not accessed illegally by third parties.
Customers also want their data used by companies to
provide a benefit to them. The technology requirement of customer
relationship management consists of a database to store entire
information about the customer and a software for interacting,
analyzing and supporting customers.
purpose of using crm it has a lot of advantages for a company
or an organization.
1. It helps to create value for the customer over a long period of
time.
anybody who wants to be associated with you, needs to look at
the value factor why do they want to stay with a particular
company or offering them any particular product or service,
you need to be happy and you need to make sure that you are
getting some value out of your association with that particular
customer
2.Happy customers are less likely to become disloyal.
If you have got customers who are happy and nice to be with
you, very likely, that they will not leave you and go to somebody
else.
3.competitive advantage over competitors.
when it is very important to understand it.
In this particular age of technology and competitiveness.
it is very important to retain your customers ,that will happen only if
your customers are happy with you else they will leave you and go
to your competitors
Customer Lifecycle:
CRM has three phases, any company who wants to start their
CRM needs to look at these three particular phases.
1. Acquiring :
Acquiring new customer relationship
so what is the kind of new customer base that you want you look at in
the near future.
first you may contact your potential customers
 during this stage, a business attempt to reach out and contact with
potential customers, this can be done with social media , advertising and
search engine optimization and word of mouth.
You acquire new customers by promoting your company's product
and service. You demonstrate how your company performance with
respect to convenience and innovation.
your marketing material and content needs to be in place where
consumers will find it.
If you can`t offer relevant content or messaging then you can`t
reach potential customers.
understanding your brand and products , what you are offer and
what type of person will buy them, it will help with acquisition.
the goal of this stage is very clear ,you are sending people to your
website and converting them into subscribers as customers.
12 What is retention

Customer Retention means" to maintain existing customers".

It is the ability of a business to retain
customers. Customer Retention is both a measure of customer
loyalty and the capacity of the business to keep customers
satisfied by good service and quality of the product sold.
It refers to the activities and actions companies and
organizations take to reduce the number of customer defections.
The goal of customer retention program is to help companies
retain as many customers as possible , often through customer
loyalty and brand loyalty initiatives.
It is important to remember that customer retention begins
and continues throughout the entire lifetime of relationship.
If you can take a customers feedback and use it to improve a
product or service, you make them feel as if they were a part of
the process. This type of trust is valuable to customer retention.
Benefits of Customer Retention:
- Retained customers tend to buy other services from same
company
- Retained customers are known to be less price/cost
sensitive.
- The probability of selling to an existing customer is 60-70%
 - The probability of selling to a ne prospect is 5-20%
- Declined migration rates.
Enhancing:
The ultimate goal of the customer life cycle is to turn your client
into potential customer who regularly buys from you and recommend
your product or services to any one.
obliviously not all customers will reach this point but you
should acquire more with the each cycle.
If you are not reaching this point then you can look back to see
where you are falling shot in the life cycle stages.

13 About successful CRM

Building Blocks for Successful CRM:

1. CRM Vision:
The CRM vision must start at the top and filter through out
the company to keep the firm customer focused. One key aspect
of CRM vision is how to guard customer privacy. The benefits
of using customer data must be balanced by the need to satisfy
customers.
2. CRM Strategy:
E-marketers must determine their objectives and strategies for
initiating CRM programs and buying technology or setting up
social media.
Many CRM goals refer to customer loyalty. Another CRM goal
involves building bonds with customers on three levels(Financial,
Social and Structural)
3. Customer Experience Management:
Consumers are constantly bombarded by marketing
communications and unlimited product choices.
Many consumers are "Loyalty Prone" and will stick with the
right product as long as its promises are fulfilled.
Synchronous and asynchronous technologies can provide
automated and human communications that solve customer
problems.
4. Customer Collaboration Management/
Marketing(CCM):
CCM is Content and interaction driven while traditional
CRM is data-driven. CCM is about managing customer
relationships and experiences by creating and monitoring online
content.
5. Organizational Collaboration:
Marketers collaborate within and outside the organization to
focus on customer satisfaction to create a CRM.
Online retailers can seamlessly link the back-end( e.g: Inventory
and payment) with the front-end CRM system and SCM(Supply
Chain Management). Extranets, two or more intranet networks
that share information, allow CRM-SCM integration.
Firms use specific processes to move customers through the
customer care life cycle.
Sales Force Automaton:
Sales force automation allows sales people to build , maintain ,
access Customer records , manage leads and manage their
schedules. Up-to-date customer and prospect records help build
customer relationships. Salesforce.com also has tools to monitor
brand conversations in the social media.
Marketing Automation:
Marketing automation activities help provide effective
targeting , efficient marketing communication , real-time monitoring
of customer and market trends.
7. CRM Information:
The more information a firm has, the better value it can
provide to each current or prospective customer.
Firm gain much information by tracking electronically( bar code
scanner data , software that tracks online movement , time spent
per page and purchase behavior).
Data base can provide a 360 degrees customer view across
various channels.
8. CRM Technology:
The internet forms the centerpiece of a firm`s CRM
abilities( those are Cookies , web logs , bar code scanners , social
media and other tools help to collect information about
consumers and their behaviors).
Firms use company-side tools to push customized information
to users.
Client-side tools allow the customer to pull information that
initiates the customized response form the firm.
9. CRM Metrics:
 E-marketers use numerous metrics to assess the internet`s
value in delivering CRM performance.
- ROI
- Cost Savings
- Revenues
- Customer Lifetime Value
- Contribution of each CRM tactic to
these measures

14 What is cross selling

Cross Selling:
Cross selling is an practice of selling additional product to an
existing customer, basically it is an selling of complementary product
with the primary product.
for example, if a customer has come to the shop and he is looking
for a formal shirt, if he purchases a formal shirt you can suggest a
tie with that
so here selling a tie with a formal shirt is called as cross
selling.
In cross selling your average bill value will increase and
average ticket size also will increase suppose if a customer has
come to a store to purchase a 10,000 worth value product and
it will sell another products of rupees 2000 then definitely the bill
value increase to 12000, instead of purchasing one product the
customer has to purchase more than one product.

15 What is Upselling
Up selling:
Up selling is a sales technique where a seller tries to sell
more enhanced and expensive products than the product the
customer initially decided to buy.
For Example:
Suppose a customer has come to electronic store to purchase a
32 inch LED TV so when he is purchasing 32 inch LED TV,
sales people convincing him to go up to 40 inch or 55 inch LED
TV by explaining him the specification and the advantages over
32 inch LED TV, so here what happens is,
if sales people convince him to take a 55 inch LED TV over 32
inch led tv then this is called up selling
Be Reasonable:
The upgrade product cost just slightly more than the chosen
product. If the price difference is very big the buyer will need to go
through a longer buying decision and may postpone the purchase
or stay with the chosen product.
It is recommended that up sell products cost not 25% more than
the chosen products.
Importance of Cross selling and up selling:
1. Increase the Revenue
2. Retain the customers
3. Fulfill the Customer requirements
4. Increase the Customer Service s and
experiences.
5. Build a long term relationship

16 About Direct Marketing

Direct Marketing:
Direct Marketing is a method where the manufacturer
sells the product or services directly to the seller or retailer
without intermediaries.
It occurs when a seller and customer deal with each
other directly rather than through an intermediary.
Forms OF Direct Marketing
Mail Order Marketing (OR) Catalogue Marketing:
The mail order marketers normally use catalogues for
communication with the consumer, this form of marketing is
known as catalogue marketing. The entire marketing takes place
by mail. Interested consumers respond by placing a mail order to
the marketer.
Mail-Order catalogue business examples include health and
beauty products, Office supplies , Computer hardware and software
products and accessories.
Direct Mail Marketing (OR) Direct Response Marketing:
It is similar to Mail Order Marketing or Catalogue Marketing.
In Direct Mail Marketing , not only letters/ brochures or
catalogues are mailed to the customers but free product samples,
Coupons , Gift cards and compliments are also mailed, depending
on the context.
For Example: Mother care India practices.
Telemarketing:
Telemarketing as a form of marketing communications
rather than as method of marketing. It facilitates personalized
contact but not face-to-face contact with customers.
For Example: Teleshopping / home shopping
Digital Marketing / Online Marketing:
Digital marketing is a form direct marketing which links
consumers with sellers electronically using interactive
technologies like emails, websites, mobile communication etc.
For Example: Amazon India , Flipkart , Ebay , Myntra and Snap deal
etc..
Mobile Marketing:
Mobile phone has become a bigger medium for direct
marketing.
Types of Mobile Marketing:
SMS, Advertisement in game,
Mobile App Marketing,
Mobile Banner Barcode,
Voice Marketing
Direct Selling:
Direct selling some times called door-to-door retailing , involves
direct sales of products and services to consumers through
personal interactions and demonstrations in their home or office.
Importance of Direct Marketing:
Let us understand importance of direct marketing ,
1. There is no middleman here, because of that it provides and
offers personal service to customers.
2. Indeed direct marketing is customer oriented, it helps
establish a proper communication channels with customers.
3. As we do not have intermediaries it also establishes direct
contact which helps creating more demand for the products
4. It secures a favorable response of customers for a new
product or a service
5. Direct marketing can be definitely used as a competitive
tool
6. because of all these, this is going to help a brand to build
a customer loyalty.

17 About SWOT Analysis

SWOT:
 It is a strategic analysis tool to asses a company`s
situation in the market place.
SWOT analysis helps an organization understand its
environment and capabilities through the use of internally and
externally generated information which is both financial and non-
financial in nature.
SWOT analysis means analyzing carefully internal strengths
and weaknesses and external threats and opportunities , so a useful
strategy for ensuring organizational success can be formulated.
Strategy has two main branches those are Internal and
External analysis. it is a famous frame work it allows us to
combine internal and external analysis.
We can use SWOT analysis when analyzing industries,
companies , products , new initiatives policies or even people.
It is a simple and useful framework that allows us to group and
visualize strengths and weaknesses and to identify potential threats
and opportunities that exist in the external environment.
In addition to that, swot framework could be useful when you
want to understand the areas in which your firm performs well.
Strengths:
If we perform a company analysis under strengths we would
expect to see its core competences the areas where the business
excels and has a competitive advantage over competitors.
For example of a firm`s strengths could be its strong brand
recognition.
It is an important organizational resource which enhances a
company competitive position.
Some more key points are
Abundant financial resources,
well known brand name ,
Lower cost ,
Superior management talent,
Better marketing skills ,
Manufacturing efficiency,
skilled workforce,
superior technological skills ,
good distribution skills and committed
employees.
Weakness:
 Weaknesses make the organization vulnerable to
competitive pressures. however weaknesses are controllable , they
must be eliminated and minimized.
For examples:
Limited financial resources , Weak spending on R&D, very
narrow product line, Limited distribution, Higher costs, out-of-date
products/ technology, Weak marketing image, Poor marketing skills,
Limited management skills and under trained employees.
Opportunities:
It is considered as a favorable circumstance which can be
utilized for beneficial purposes. It is offered by outside
environment.
Chances to make greater profits in the environment.
external attractive factors that represent the reason for an
organization to exist and develop.
When an organization can take benefit of conditions in its
environment to plan and execute strategies that enable it to
become more profitable.
Organization should be careful and recognize the opportunities
and grasp them whenever they arise.
Examples: Rapid market growth, changing customer needs/
requirements , new uses for product discovered and etc..
Threats:
It is a characteristic of the external environment which is
hostile to the organization. Management should anticipate such
possible threats and prepare its strategies.
examples: Entry of lower cost foreign competitors, cheaper
technology adopted by rivals , shortages of resources , changing
buyer needs/preferences , introduction of new substitution
products, product life cycle in decline , rival firms adopt new
strategies , increased government regulations, economic downturn
and recession in economy.
18 About Computers in Business
 Module 4

Enterprise Resource Planning

1. What is Enterprise Resource Planning?
Enterprise Resource Planning(ERP): In today`s competitive world, one has
to manage the future of an enterprise more cleverly. Managing the future
means managing the information. A large enterprise may generate huge
amount of data such as financial data, customer details, purchase details
and employee data etc. Only the organization that makes the best possible
use of this information can succeed. It is very difficult to manage this huge
information by people alone. Information technology and its related
technologies can be used for planning and organizing resources and
information of an enterprise. Hence most of the organizations are moving
to Enterprise Resource Planning(ERP) packages as a solution to their
information management problem. ERP stands for Enterprise Resource

Planning. ERP is an business management software which used to

integrate all the business activities in any organization.
ERP facilitate information sharing and integration across the different
functions and to operate the enterprise more effectively and efficiently using
one database, one application for the entire company.
Enterprise:
An enterprise is a group of people and other resources working
together for a common goal. It consists of different sections or modules or
functionalities such as manufacturing or production, planning, sales,
purchase, finance, and distribution etc.
Resource:
There are different types of resources in an enterprise like men, material,
money and machines. Information system can be designed for various
departments of an enterprise so that accurate and timely data can be
provided to the concerned persons.
Planning:
Planning helps managers to improve future performance, by establishing
objectives and selecting a course of action, for the benefit of the
organization. In some enterprises, different departments function
independently. So the information that is produced by each department may
be available only to the top management of the department and it is not
available to the other departments. There is no communication between
different sections of an enterprise. The ERP system often integrates
accounts payables, stock control systems, order monitoring systems,
customer database into one system.
2. Name the functional modules of ERP.
Functional Modules of ERP:
ERP system helps the management in making the planning process more
productive and efficient. The entire ERP package contains many modules or
sub modules.
1. Financial Module.
2. Manufacturing Module.
3. Production Planning Module.
4. HR Module.
5. Inventory Control Module.
6. Purchasing Module.
7. Marketing Module.
8. Sales and Distribution Module.
9. Quality Management.
1. Financial Module:
This Module is the core of many ERP software packages. It can collect
financial data from various functional departments and generate valuable
financial reports. Financial reports include balance sheets, general ledger,
trial balance, financial statements etc. This module also includes financial
accounting, investment management, enterprise controlling and treasury.
2. Manufacturing Module:
It contains necessary business rules to manage the entire production
process. This module of ERP enables an enterprise to combine technology
and business process to get integrated solutions. It also provides freedom
to change manufacturing and planning methods as and when required.
3. Production Planning Module:
 This module is used for optimizing the utilization of available
resources and helps the organization to plan their production. This module
identifies the materials required, allocates optimal resources using data and
sales forecasting with the sales data.
4. Inventory Control Module:
This module covers processes of maintaining the
appropriate level of stock in the warehouse. It is responsible for
identifying the inventory requirements and setting the target of the stock
items required.
5. Purchasing Module:
Purchase Module helps for generating purchase
order evaluating the supplier and billing. It is closely
connected with the inventory, finance and production planning module.
6. HR Module:
HR stands for Human Resource. It maintains an
updated and complete employee database including personal information,
salary details, attendance, performance and promotions etc of all employees
in an enterprise.
7. Marketing Module:
Marketing module is used for monitoring and
tracking customer orders, increasing customer satisfaction and for
eliminating credit risks.
8. Sales and distribution module:
This module helps for tracking enquiries, order
placements, order scheduling, dispatching and invoicing. This module is
closely integrated with the e-commerce website of the organization.
9. Quality management module:
This module is used for managing the quality of the product. The
quality management module fulfills the quality planning, Quality inspection
and quality
control.
3, Explain the process and steps involved in ERP life cycle and implementation
ERP implementation methodology and life cycle.
ERP implementation life cycle.
Different Phase of ERP Implementation:
1. Pre-Evaluation Screening
2. Package Evaluation
3. Project Planning Phase
4. Gap Analysis
5. Reengineering
6. Configuration
7. Implementation Team Training
8. Testing
9. End-User Training
10. Going Live
11. Post Implementation Phase
1. Pre-Evaluation Screening:
Pre-Evaluation Screening is the phase which starts when company decides
to go for an ERP system, the search for perfect solution starts.
It is very time consuming process to select a few where all claim to be
the best, It is just superficial study of package. Not all packages are same,
each has its own
weakness and strength. While making the analysis, it is good to
investigate the origins of the different packages. Some packages can be
good to investigate the origins of the different packages.
2. Package Evaluation:
It is one of the most important phase of the ERP implementation.
Detailed project plan is laid out involving top management and experts.
Scheduled deadlines, Assigning the key resources, roles and responsibilities
of the individuals. Blueprint from beginning to the completion of the
project.
Few important points to remember while evaluating software
includes.
-Flexibility and Scalability.
-Complexity
-User Friendliness
-Technology
-Quick Implementation
-Amount of Customization Required
-Ability to support multi site planning and control.
-Local Support infrastructure
-Total cost (i.e) license, training, customization etc.
3. Project Planning Phase:
This is the phase which plans and design the
implementation process. In this phase details of how to go about
implementation, schedules and deadlines etc are decided. Roles and
responsibilities are identified and assigned.
This is the phase which will decide when to begin, how to do it
and when the project is supposed to be completed and what to do in
contingencies.
There is a committee for this which is supposed to meet
periodically through out cycle to review process and future course of
action.
i) Project Schedule:
This is the phase that designs the implementation process. In this
phase the details of how to go about the implementation are decided.
Time schedules, deadlines, etc for the projects are arrived at and the
project plan is developed. Roles are identified and responsibilities are
assigned.
The resources that will be used for implementation efforts are
decided and the people who are going to be in- charge of implementation
are identified.
 Team members are selected and task is allocated. This phase
decides when to begin the project, how to do it and when is it supposed
to be completed. Planning is done by the committee constituted by team
leaders.
ii) Decission Of The Phase:
This phase plans what to do in case of contingencies, how to
monitor the progress of the implementation. This phase also decided what
control measures should be installed and what corrective measure or
actions should be taken when things get out of control.
iii) Team Leader:
The project planning is usually done by a
committee constituted by the team leaders of each
implementation group. The committee will be headed by the ERP in-
charge. The committee will meet
periodically to review the progress and chart the future
course of action.
4. Gap Analysis:
It is a phase in the ERP implementation, where the
organization tries to find out the gaps between the company`s existing
business practices and those supported by the ERP package.
This is the process through which companies create a
complete model of where they are now and where they to head in the
future. The main objective is to design a model, which both anticipate
and covers any function gap. It has been estimated that even the best
ERP package meets only 80% of the company`s functional gaps.
5. Re-engineering:
In this phase that the human factors are taken into account. It fill
the gap between old process and new process.
There have been occasions where high level executives have
invoked the reengineering slogan and purchased an ERP package with the
aim of reducing number of employees. While every implementation is
going to involve some change in job responsibilities, so it is the best to
treat ERP as an investment as well as cost-cutting measure, rather than a
downsizing tool.
Reengineering Steps:
1.Define Objectives and Framework
2. Identify Customer Needs
3. Study the Existing Process
4. Formulate a Redesign Plan
5. Implement the Redesign Plan
Objectives:
1. Improve efficiency(example reduce process time,
quick response to customer.

2. Increase effectiveness(for example, deliver high

quality product)
3. Achieve Cost Saving in long run
4.Provide more Meaningful work for
employees
5. Increase flexibility and adaptability to change
6. Enable new business growth
6. Configuration:
This is the main functional area of the ERP implementation.
Business processes have to be understood and mapped in such a way that
arrived solution matches with the overall goals of the company.
After completion of re-engineering what things we need to adopt this
new technologies.
Setting up of physical infrastructure like servers, routers, networking
components and display devices installation of the software.
7. Implementation Team Training:
 When the configuration is taking place the implementation team is
being trained not how to use the system, but how to implement it. This is
the phase where the company trains its employees to implement and later
run the system.
The ERP vendors and the hired consultants will leave after the
implementation is over. For the company to be self sufficient in running
the ERP system, it should have a good team that can handle the various
situations.
8. Testing:
This is the phase where you try to break the system. Here we reach
a point where we are testing real case scenarios.
The system is configured and now must come up with extreme case
scenarios. System overloads, multiple users logging on at the same time
with the same query, users entering invalid data, hackers trying to access
restricted areas and so on.

9. End-User Training:
The success or failure of an ERP system depends on how the
actual users use the system. The most successful implemented ERP
packages fail due to lack of end user training.
ERP system changes the job descriptions of the
people, so it is important to identify the people who are
going to use the system. The current skills of the people are identified
and they are divided into groups. Every group is provided training on the
new system.
10. Going Live:
On the technical side, the work is almost complete data conversions
is done, databases are up and running on the functional side, the prototype
is fully configured and ready to go operational.
The system is officially proclaimed operational, even though the
implementation team must have been testing it and running successfully
for some time. But once the system is live, the old system is removed
and the new system is used for doing business.
11. Post Implementation Phase:
One important factor that should be kept in mind is that the post
implementation phase is very critical. Once the implementation is over the
vendors and the hired consultants will go.
There should be people within the company who have the technical
processes to make the necessary enhancements to the system as and
when required. The system must be upgraded as and when new versions
or technologies are introduced.
4. Mention some of the merits or advantages of having an ERP system
Benefits(Advantages)of ERP System:
1.Integrated Information among all departments
In old days, company use to store information in each of the
departments database. Thus, the information would only be shared within
the particular department. If other departments wish to get the
information, they have to enquire from the respective department manager
in order to access the information.
By using the ERP, the system can store all the information across the
all the departments in a single database.
2. More efficiency for the business Process:
Before the implementation of the ERP system, all of the information
is stored in different database. This information may be duplicated and
there is high risk that the information may not be the latest version. Hence,
decision made based on this information may not be accurate.
After the implementation of the ERP system, all the information is
stored in a single database. Which mean everyone can access and update
the information from various department s to reflect the latest information
in the system.
This reduces the risk of duplicated files because all the information
will be updated in a single database. Thus, decision made would be more
accurate and reliable.
3. Total Visibility:
ERP allows total access to every important or major process in the
business by making data from every department easily accessible to the
management.
 This complete visibility provides better workflows and allows inter-
departmental processes to be easily tracked with maximum efficiency.

4. Improved Reporting and Planning:

Implementing an ERP system suite across departments. It means that
an organization has a single, unified reporting system for every process.
By having a single source of truth, an ERP system are able to readily
generate useful analytics and reports at any time.
ERP system provide management to have the ability to compare and
analyze functions across departments or divisions, without multiple emails
and spreadsheets.

5. What are the disadvantages of having an ERP system?

Disadvantages of ERP:
1. High Software Cost
2. Consulting Fees.
3. Forced Change of Processes.
4. Very Complex Software
5. Lack of Trained People
6. Internet Is Needed
6. Name some ERP solution providers
ERP Solution Providers(erp-market renowned vendors) and Packages:
1. Oracle:
Oracle was originally for its database system rather than its ERP
system. The ERP310 package from Oracle provides strong finance and
accounting module. It also provides good customer and supplier
interaction, effective production, analysis, efficient human resource
management and better pricing module.
2. SAP:
 SAP stands for System Applications and Products for data
processing. SAP developed Customer Relationship Management(CRM),
Supply Chain Management(SCM), and Product Life Cycle
Management(PLM) software.
3. Bitrix24:
Bitrix24 is a free online ERP solution that works for businesses
for all sizes. It includes apps for customer relationship management(CRM),
project management, task management, employee management, document
management and Human Resource(HR) management.

4.Microsoft Dynamics:
Microsoft Dynamics is part of Microsoft business
solutions. It provides a group of ERP products. This package can be
installed and used easily as it provides good user interface. It also
provides customer relationship management (CRM) software.
5. Tally ERP:
Tally solutions Pvt Ltd is an Indian Software Company. Tally ERP
is a business accounting software for accounting inventory and payroll
system.
7. Name some of the current trends in ERP
ERP related technologies and Trends:
An ERP system integrates separate business functions - material
management, product planning, sales, distribution, financial and others -
into single applications.
If some other technologies are going to be used along with
stand alone ERP package, the performance of the enterprise will be
increased significantly. Let us discuss some of the related
technologies used along with ERP packages.
8.What is OLAP
OLAP(Online Analytical Processing):
It is online analytical processing and it consists of software tools
that are used for data analysis in order to make business decisions.
 It is mainly used for an offline storage of data and this can be
used by the business analysts, managers, executives for analysis and
reporting purposes.By using OLAP we can extract database information
for multiple databases and analyze it for decision making and it is being
majorly used for data analysis.
example: In finance department such as , financial performance analysis
and financial modeling etc. In Sales department the OLAP application is
used for sales analysis and forecasting. In Marketing department, it is
used for marketing research analysis ,sales analysis and customer analysis
etc.
9.What is OLTP
OLTP(Online Transaction Processing):
It is a system that manages transaction-oriented applications on
the internet in a three-tier architecture and it is being used by the end
users , Database administrators, database professionals.
Examples: In online banking, It is used for checking account balance,
directing the fund balances and for purchasing a book online and call
center staff uses OLTP to view and update customers details . In ATM
centers, it is used for money with drawls, transfers, deposits and inquiries
etc.
10.Explain DSS
Decision Support System(DSS):
A decision support system is an interactive computer-based
application that combines data and mathematical models to help decision
makers solve complex problems faced in managing the public and private
enterprises and organization.
DSS is used to collect , organize and analyzes business data. It
supports different decision makers to collect raw data then to take
decisions and resolve the problems.
DSS Database:
It contains data from various sources, including internal data from
the organization, the data generated by different applications , and the
external data mined from the internet etc.
 Decision support Systems database can be a small database or a
standalone system or a huge data warehouse. the DSS database usually
contains a copy of the production database.
DSS Software System:
It consists of various mathematical and analytical models that are
used to analyze the complex data , there by producing the required
information.
DSS User Interface:
It is an interactive graphical interface which makes the interaction
easier between the DSS and its users. It displays the results(output) of
the analysis in various forms, such as text, table, charts or graphics.
The user can select the appropriate option to view the output
according to his requirement.
11.Give a brief on what is Product life cycle
Product Life Cycle Management(PLM):
Product Life Cycle Management is the process of
managing the entire life cycle of a product. It is used for determining the
lifespan of a product. The general
schematic diagram of four stage product life cycle which
consists of development and introduction of a new product,
then its growth in the market, its maturity and at last its
decline if it can not compete with similar products of other
companies.
The information gathered from product life cycle will help an
enterprise to understand the state/ status of a product in the existing

market. product life cycle is a process that product goes through

when it is first introduced into the market until it declines or it is
removed from the market. Predicting a product life cycle is extremely
difficult nobody can accurately for tell the customer preference might
change in five or ten years of time.
 Every company wants each of their products to have a long
commercial life, that means, they want the product life cycle to be as

long as possible. Product life cycle is the time when the product
is in the market throughout its different stages which are Introduction,
growth, maturity and decline.
Introduction:
once the product has been developed, the first stage of the product
is the introduction. In this stage the product is being released into the
market. Focus is on raising product awareness and increase its market
share, usually the prices are kept as low as possible to capture
maximum market share.
when a product is launched for first time, sales will be very less
until the consumers become aware of the product and its advantages.
Demand for the product is also quite immature at this stage. The
main goal of this stage is to build the demand for the product
this stage is the most expensive stage for a company because
marketing and promotion cost are also very high and company often
invest the most in the promoting the product and getting into the hands
of consumers.
Growth:
when your product has reached this stage it means it has survived
the first introduction phase and has successfully launched their product.
Companies now want their product to remain in this phase for as long

as possible. It is important to focus on building a brand preference

to increase the market share, this is when the customer and the
competitor start becoming aware of it and your product start to sell at
much faster rate.
Public becoming increasingly aware of your product and the word
of mouth is starting to spread as a market expand, the sales are usually
increasing in volume and generating revenue. Marketing in this stage is
aimed at increasing the product market share.
Maturity:
 In this maturity phase the product reaches maturity /saturation and
its sale tends to stop or even slow down. competitors are also bringing
the new similar product into the market .
During this stage company has to focus on maintaining their market
share through promotions and advertising. Pricing may also have to come

down slowly. company must invest on innovations, they must keep

updated the latest form of technologies. So if you fail to do this, you
will start losing customers .
Due to decrease in demand for the product, company may
introduce new features to the product to enhance its effectiveness. It can
also sell the product at a lower price compared to its competitors
Decline:
It is the last phase of product life cycle, In this phase the product
reaches saturation analytical line is inevitable .
After enjoying a long period of maturity, most of the products
will now start declining. Decline refers to the decreasing the sales and
market share. Product sales will also drop significantly and the consumer
behavior is also changing as there is less demand for product,
By this time the potential customers will move to better product or
new innovative product as they are no longer interested in your product
because they offer nothing new as compared to other products

12.Explain MIS
3. Management Information System(MIS):
In MIS there are three components those are management,
information and system. Management is the end user of the data that is
decision maker, information is the processed data and system is the
integration and holistic view of the enterprise.
An enterprise may contain different
categories of employees like clerks, assistants, officers,
executives, managers etc. All of them are the users of MIS.
 MIS will collect relevant data from inside and outside an
enterprise. This data is processed and stored in a centralized database and
is made available to its users whenever it is needed. MIS has the
capability to generate reports when the user demands it.

13.What are problems associated with ERP implementation

ERP Implementation Pitfalls:
- Lack of motivation and participation of employees in ERP
implementation and Inadequate top/senior management support play a vital
role in this problems.
-Resistance to process change within the
Organization
- Lack of communication and awareness.
- weak Project Management(Planning and
Scheduling)
13.How can organizations successfully implement ERP

ERP and its success factors:

1. Top Management Commitment:
Senior management support and commitment is one of the major
critical success factors for ERP projects. Committing the planned
resources available for the ERP Project is one of the ways to show the
top management support and commitment, which would help the ERP
project implementation to be successful.
Delegating critical ERP implementation tasks to the lower
management levels.
2. Clear Goal Setting and Budget Planning:
Clear goal setting increases the chances for a smooth implementation
and maximizes the return on investment. ERP project road map has to be
framed to meet the present and future business objectives of the
organization.
 ERP goals are applicable for the various levels of the organization
like management, business and IT ,
Centralized data and Integrated systems, Standardized business processes,
integrate and streamline operations, increase revenue, customer satisfaction.
More than 90% of the ERP projects have exceeded the initial project
budget. The primary reason is that all the costs associated with ERP are
not identified during the budgeting phase of the ERP project.
The high level ERP project budget plan should comprise of initial
budget for the procurement and recurring budget for the maintenance and
support of
Resource s(resources involved between the client and
vendor teams for the ERP project)
Software(primary ERP software, related software's
like OS,DB etc..)
Hardware(servers, PCs others like firewall, anti-virus
etc..)
Infrastructure(Internet bandwidth, remote
connectivity, etc..)
3. Good Project Team :
ERP project team needs to represent all functions of the business
in order to identify the right ERP solution for the business. Project team
members must have the requisite skills and experience to fulfill their roles.
These people would need to spend most of their time for the ERP
implementation till the project completion.
4. Change Management:
Changes mean that top management, managers and
low level employees have to stop the old approach and
learn new ways of doing business.
With more training, the users will be confident on
their abilities to manage ERP, take ownership and become voluble
contributors to the ERP project success.
14.Explain supply chain management
Supply Chain Management(SCM):
The supply chain consists of all the activities associated with
moving goods from the suppliers to the customer.
A supply chain is a sequence of processes and flows that takes
place within and between different stages and combine to fill a customer
need for a product

Supply chain(value chain or demand chain) is the network of the

involved companies , through upstream and downstream linkages , in the
different processes and activities that produce value in the form of
products and services in the hands of the ultimate consumer.
For example: A shirt manufacturer is a part of supply chain that goes
upstream through the weavers of fabrics to the manufacturers of fibers
and downstream through distributors and retailers to the final consumer.
Each of these organizations in the chain is dependent upon each
other.
Supply Chain Management – Process:
Supply chain management is a process used by companies to ensure that
their supply chain is efficient and cost-effective.
A supply chain is the collection of steps that a company takes to
transform raw materials into a final product.
Supply Chain Management have five components those are
1. Plan
2. Develop
3. Make
4.Deliver
5. Return
15. Explain steps of supply chain in detail
1.Plane:
The initial stage of the supply chain process is the planning stage. We
need to develop a plan or strategy in order to address how the products and
services will satisfy the demands and necessities of the customers. In this stage,
the planning should mainly focus on designing a strategy that yields maximum
profit.
2. Develop:
After planning, the next step involves developing or sourcing. In this
stage, we mainly concentrate on building a strong relationship with suppliers of
the raw materials required for production.
This involves not only identifying dependable suppliers but also
determining different planning methods for shipping, delivery, and payment of
the product.
3. Make:
The third step in the supply chain management process is the
manufacturing or making of products that were demanded by the customer. In
this stage, the products are designed, produced, tested, packaged, and
synchronized for delivery.
4. Deliver:
The fourth stage is the delivery stage. Here the products are delivered to
the customer at the destined location by the supplier. This stage is basically the
logistics phase, where customer orders are accepted and delivery of the goods is
planned.
5. Return:
The last and final stage of supply chain management is referred as the
return. In the stage, defective or damaged goods are returned to the supplier by
the customer. Here, the companies need to deal with customer queries and
respond to their complaints etc.
16.What are the advantages of supply chain management
Advantages of Supply Chain Management:
1.Cost Efficiency:
Supply chain management assist in attaining cost efficiency within the
organization. It aims at optimizing all process of business which bring down the
production cost, packaging cost, warehousing and transportation cost and avoids
any wastage of goods by facilitating timely delivery. It minimizes the overall
operating expenses and enhances the overall profitability.
Enhance Output:
The concept of supply chain management aims at maximizing the overall
productivity of business.
Supply managers monitor all production processes and ensure that all
resources are efficiently utilized.
Any wastage of resources is avoided which lead to maximize the overall
output.
Avoids Delay In Process:
Preventing any delays of business process is one of the major advantage
of supply change management.
Supply chain manager ensure that all materials are timely acquired for
facilitating uninterrupted production of products.
Also, they regulate all delivery and logistics services of business which
promote delivery at right time at right location thereby avoiding any delays.
Easily Identify Problem Areas:
Supply chain management enable business in recognizing its issue that
are adversely affecting its reputation and profitability.
Managers can easily track the performance of every department and
identify which one is lacking in delivering its duties.
In absence of this concept, it will be difficult to detect the issue and every
department will blame each other for any problem that erupts.
Better Collaboration:
Process of supply chain management bring better collaboration among
distinct parties of business.
It focuses on developing a proper communication channel within the
business for avoiding any confusion or disputes.
Smooth flow of information among all stakeholders like employees,
customers, suppliers and distribution enhance understanding which leads to
create a better collaboration.
Disadvantages Of Supply Chain Management:
Expensive To Implement:
Major limitation of process of supply chain management is that it is quite
expensive to implement.
It requires large investment in terms of time, money and other resources
that become unaffordable for small businesses.
Complicated:
Process of supply chain management involves numerous complexities as
it involves several departments within the organization.
It may lead to create confusion and hamper the normal functioning of
business.
Employees may feel hesitant and demotivated to accept this concept as it
is new to them there by giving rise to several other difficulties. 
Lack Of Co-Ordination Among Departments:
The concept of supply chain management functions properly only if
there is better coordination among departments of departments.
Establishing a coordination among several departments within big
corporate is a quite difficult task where this concept may eventually fail
to perform.