Electronic Commerce, 7th Edition
Chapter 1 Solutions
1. Describe three factors that would cause a company to continue doing business in traditional ways and avoid electronic commerce.
Answer: Traditional commerce is a better way to sell the items or services when personal selling skills are a factor, as in commercial real estate sales; or when the condition of the products is difficult to determine without making a personal inspection, as in the purchases of high-fashion clothing, antiques, or perishable food products
2. Figure 1-5 lists roommate-matching services as a type of business that is well-suited to a combination of electronic and traditional commerce. In one paragraph, describe the elements of this service that would be best handled using traditional commerce and explain why.
Answer: Responses will vary, but may suggest that customers are generally concerned about lifestyle and personality factors, and as a result would want to meet any potential roommate.
3. Choose one major difference between the first wave and the second wave of electronic commerce. Write a paragraph that describes this difference to a person who is not familiar with either business or Internet technologies.
Answer: The Internet technologies used in the first wave, especially in B2C commerce, were slow and inexpensive. Most consumers connected to the Internet using dial-up modems. The increase in broadband connections in homes is a key element in the second wave. Although these connections are more expensive, they are up to 20 times faster and can alter the way people use the Web.
4. What are transaction costs and why are they important?
Answer: Transaction costs are the total of all costs that a buyer and seller incur as they gather information and negotiate a purchase-sale transaction.
5. Provide one example of how electronic commerce could help change an industry’s economic structure from a hierarchy to a network.
Answer: When transaction costs are high, concentrated hierarchies reduce unit cost by taking advantage of specialization and economies of scale. Networked economic structures with the information technology to coordinate their strategies, resources, and skills are capable of greater economic efficiencies by taking the business activity into the market place. A closer cooperation between partner firms and customers will reduce transaction costs.
6. How might a manager use SWOT analysis to identify new applications for electronic commerce in their strategic business units?
Answer: In SWOT analysis you list strengths and weaknesses of the business unit and then identify opportunities presented by the markets of the business unit and threats posed by the competitors of the business unit. This is accomplished by analyzing all the business operations into value adding activities and supporting activities.
7. In about 200 words, explain the difference between language translation and language localization.
Answer: Language translation is the process of restating some text written in one language in a different language. In other words, to translate is examine some original text, written in what is called the source language, and to write a corresponding text in different language, called the target language, with the goal of preserving the tone and meaning of the original text.
Language localization is a translation that considers multiple elements of the local environment, such as business and cultural practices, in addition to local dialect variations in the language. The cultural element is very important since it can affect—and sometimes completely change—the user’s interpretation of text.
8. In a paragraph, describe the advantages of a flat-rate telecommunications access system for countries that want to encourage electronic commerce.
Answer: In a flat-rate access system, the consumer or business pays one monthly fee for unlimited telephone line...
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