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14188-37032 Ch06 Solutions
14188-37032 Ch06 Solutions
Chapter 6 Solutions
Review Questions
1. In approximately 100 words, define the term “reserve price” and explain
how the use of a reserve price can affect the progress and outcome of an
auction.
Answer: A reserve price is a minimum; even though the bid may start at a very low
price, there will be no winner unless the bids reach a reserve price set by the seller. If
the reserve is set too high, no one may win the auction.
Answer: One industry that may be considered is the construction industry where
bidders are invited to offer value engineering, innovations, and alternate design ideas
that could save money over the life cycle of a project.
3. In about 300 words, describe the services offered by an online auction escrow
service. Name one advantage and one disadvantage of using this type of an
escrow service.
Answer: An escrow service will hold the buyer’s funds until the buyer has received
the merchandise and is satisfied; this is primarily used for high ticket items. The
advantage to the buyer is that they can be sure they are getting what they paid for in
the auction. The disadvantage is that a buyer can be dissatisfied about almost
anything and the seller must wait for a decision.
4. Some eBay users believe that the use of sniping software is unfair and that
eBay should prohibit its use. In an essay of about 200 words, present facts
and logical arguments that would convince eBay to prohibit the use of
sniping software.
Answer: Responses will vary but you should consider the advantages of sniping on
auctions. The first is that the sniper prevents counter-bids and is more likely to win
the auction. The most significant advantage is that sniping prevents emotional bidding
wars.
Electronic Commerce, 7th Edition Solutions 6-2
Advantages
Disadvantages
Answer: Answers will vary, but parts of the business that could use wireless
technologies include delivery of restaurant reviews to cell phones, PDAs, and
wireless laptops. Wireless technologies could also be used to deliver alerts to
subscribers when specific reviews are updated. Customers could use wireless
technologies to manage account information.
Parts of the business that would use Internet technologies could include database
server services, online billing services, advertising, and Web delivery of restaurant
review content.
Electronic Commerce, 7th Edition Solutions 6-3
Exercises
1. Use the Online Companion to examine the projects list at either the MIT
Software Agents Group Projects site or the Carnegie Mellon Intelligent
Software Agents Lab site. Choose a software agent technology used in one of
these projects and, in approximately 200 words, describe how you could use
it in an electronic commerce application.
Answer: Answers will vary, but should include notes on navigation guides and buying
and selling agents. If they used information from a navigation guide, the students
should discuss how this guide will make a site more user-friendly.
Answer: Responses will vary but students could consider a variation of the English
auction where each stakeholder group submits a bid. The group with the winning bid
would then be assigned the highest priority and would then be able to choose its
“block” of parking spaces.
3. Follow the links in the Online Companion for Auction Consignment Sites to
at least two of the sites and become familiar with the services they offer.
Prepare a chart that compares the services offered by two of the sites you
visit. Include any important factors that a customer would evaluate when
deciding which site to use, but be sure to include a comparison of prices,
specific services offered, exclusions and limitations on the services, and
guarantees, if any. Summarize your findings in a paragraph or two in which
you indicate which site you would recommend to a friend.
4. Use mySimon, Best Web Buys, or another Web pricing robot of your choice
to find sources for a book or CD that you want to buy. Evaluate the results
provided by the robot in terms of how useful the robot was in helping you
plan for your purchase. Summarize your findings in a report of
approximately 200 words.
Answer: Answers will vary, but students should discuss the listing of products and
how they can often list in terms of descending price or by store. Yahoo! allows you to
sort by price and then shows the Yahoo! rating of the stores that carry the product.
in the site design. Describe each feature in detail, and explain why you
believe it should be included. For each feature, note whether it will be
supplied by Oyster Bay personnel or purchased from an outside supplier. To
learn more about existing yacht sales sites, you can use your favorite search
engine or consult the Carver Yachts, Moran Yacht & Ship, and
YachtWorld.com links in the Online Companion.
Answer: Responses will vary, but should include pictures of some of the yachts,
personnel, different departments, as well as accessories and parts from Oyster Bay as
well as links to other suppliers and vendors.
6. In the chapter, there is a discussion of the stickiness of Web sites that have
many visitors. InterActiveCorp is a company that often appears on lists of
sites that have a large number of visitors or sites that have a high degree of
stickiness. Visit the company’s site and explore it to learn which Web sites it
owns. List the names of the two InterActiveCorp sites that you believe have
the highest degree of stickiness and, in about 150 words, explain why.
Cases
Case 1: Alibaba.com
1. Answers may vary, but possible explanations for the lock-in effect include:
registration with Alibaba.com involves a significant contribution of time and money.
Once a company has gone through this process and learned how to operate in the
Alibaba.com system, they may be reluctant to start over with a new competitor. Also,
once international businesses have established working relationships with specific
SMBs in China, they may be reluctant to restart the process with unknown
businesses.
2. Answers may vary, but likely reasons the site has different listing charges for the two
types of members include: the demand for the service is higher in China, so
Alibaba.com charges the fee that each market will support. Also, because there are a
very large number of small and medium SMBs in China, setting a high listing fee
may help insure that registered SMBs are financially sound, committed companies.
Individual opinions on this practice may vary. Some may consider it exploitive and
unfair to charge twenty times more for China Gold Supplier status. Alibaba.com
appears to have few competitors, and may be considered to be taking advantage of
Electronic Commerce, 7th Edition Solutions 6-6
Chinese SMBs. On the other hand, some may think it makes sound business sense to
charge each member type the maximum amount each market will support. It is
possible that the potential profits for successful Chinese SMBs could outweigh the
annual fee significantly, while the cost savings to foreign sellers is proportional to
their lower listing fee.
3. Answers may vary, but the general scenarios for Alibaba.com to become an
intermediary in relationships between Chinese SMBs and large global companies
would include Alibaba.com charging both for services to negotiate supplier contracts
on behalf of Chinese SMBs and also offer for a fee any services required of the
contracts that the SMBs may not be able to provide themselves.
4. Answers may vary, but some advantages Alibaba.com might have over eBay in the
Chinese market include targeted cultural knowledge, established local business
infrastructure, lack of need to translate Web content and business/legal practices to a
foreign market.
5. Answers will vary, but possible ways in which Alibaba.com’s reputation could help
Yahoo! compete more effectively as a search engine and Web portal in China include:
Chinese Internet users may be more comfortable accessing the services of a company
with a strong established Chinese reputation. Also, Alibaba.com staff and business
practices are likely much more familiar with and more effective in addressing unique
issues in offering Internet services in China.
1. Answers may vary, but should emphasize elements unique to the competing store
models that would provide special benefits to Betty's business. Examples would
include: existing robust community of collectible vendors, limited existing
competition from other collectible glass figurine vendors, optional transaction
insurance for fragile items, email management services, shipping services, easily
scalable account options to account for store growth, and lack of a minimum
transaction requirement to accommodate times when business at the physical store is
most busy.
2. Answers may vary, but should address each of Betty's stated goals: contain photos
and descriptions of popular crystal figurines with additional information about how
they are made, include a list of figurines that are no longer manufactured, include a
guide to buying collectible crystal figurines, and direct site visitors to her auctions
and her proposed Web store. Elements used to implement these goals should be
Electronic Commerce, 7th Edition Solutions 6-7
designed with the collectible glass figurine community in mind, and any potential
difficulties implementation of the element may provide should be discussed.