May 4, 2012
Part A: Short-Answer Questions (30 marks total)
Answer each question in one to two paragraphs.
1. What are the major differences between pure play e-commerce and bricks-and-clicks operations? What are the benefits and limitations of each? (5 marks) Pure play e-commerce are virtual retailers that sell directly to consumers over the Internet without maintain a physical sales channel. Virtual e-tailers have the advantage of low overhead costs and streamlined processes. Click and mortar retailers are a combination of both brick-and-mortar retailer and an online transaction web site. Many click-and-mortar retailers started life as a traditional storefront with a physical retail presence only and over time adopted an online transactional capability as well. 2. One of the key motivations for developing an e-commerce site is immediate access to a much larger market. Explain why an increased market reach may have benefits, and describe its limitations. (5 marks)
Since the World Wide Web can reach out to billions of people worldwide, it gives an advantage to any company that is looking to build an e-commerce site. The benefits of companies having an e-commerce site is that it can share all of the products and services that a company does online, show price comparisons between other companies, it is easily accessible, it’s open 24/7, and customers can interact via email and the “contact us” link on most web pages.
Some of the limitations are that since sometimes there is not a contact phone number customers may have to wait for an email response in order to receive the answer to their product or service question, customers may not be loyal and search for other companies on the web that have a “better deal”, the product or service may not have a price listed so you may have to wait until the morning to contact the store or representative, the product you want may be sold out and you will have to wait until it returns online, and most importantly security issues with credit cards and personal information.
3. What are the three most important mediation issues in e-commerce? Give an example of each. (5 marks) • Disintermediation, the elimination of intermediaries between sellers and buyers. Companies are using their website to sell directly to their products or services. An example is Real Estate Agents, etc. • Re-intermediation, the process whereby intermediaries (either new ones or those that had been disintermediated) take on new intermediary roles. New services and roles providing added value and assistance for companies to reach their customers online have been introduced. Examples include assisting buyers comparing shopping from multiple sources. • Cyber-mediation, the use of software (intelligent) agents to facilitate intermediation. Example, the ability for some software to recognize different shoppers and their taste to recommend products or services. 4. What are the key factors that determine e-commerce success? What factors determine its failure? (5 marks)
The major success factors of e-commerce are:
• Creating a profitable and effective operational structure • Ensuring profitability and growth
• Offering and serving distinctive values and services to customers • Adopting realistic and reliable business models • Defining appropriate market segments and offering appropriate services and products The major failure factors are:
• Failure to provide value to costumers
• Not providing a profitable and sustainable business model • Failure to become educated in the appropriate target market • Failure to establish strong Supply Chain Management • Inability to achieve the scale to make marginal profits
5. What are information portals, and why are they an important benefit of e-commerce? (5 marks)...
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