T1-Some people view the term commerce as describing only buying and selling transactions.

Electronic commerce (EC) is not just

the buying and selling of goods and services, but conducting all kinds of business online such as servicing customers, collaborating
with business partners, delivering e-learning, and conducting electronic transactions within an organization therefore (EC) refers to
using the Internet and intranets to purchase, sell, transport, or trade data, goods, or services. Pure versus partial EC (the degree of
digitisation of the product or service sold, the process, and the delivery method); and, EC organisations (bricks and mortar
organisations, versus virtual (or pure play) organisations, and click and mortar (or click and brick) organisations). EC allows the
creation of new methods of doing business by which companies can generate revenue to sustain themselves. There are two parts a
revenue and value proposition model. The revenue model outlines how the organisation will generate income. There are six common
revenue models: Sales (revenue from sales of goods or services), Transaction fee (commissions paid on volume of transactions),
Subscription (fixed amounts are charged, usually monthly), Advertisement (payments from advertisers), Affiliate (commissions for
referring customers), Licensing (an annual fee/per usage fee). The value proposition is a description of the benefits of using the
specific model (tangible and intangible), both to the customers and to the organization. for example, the customer value proposition
defines how a company’s product or service fulfils the needs of customers. B2B e-commerce is short for business-to-business,
electronic commerce and is selling products or services between businesses through the internet via an online sales portal. In general,
it is used to improve efficiency for companies. Instead of processing orders manually – by telephone or e-mail – with e-commerce
orders can be processed digitally (EDI). The automotive industry is a great example of an ecosystem of complex B2B relationships.
T2-An e-marketplace also called e-market, virtual market, or marketspace is an electronic space where sellers and buyers meet
and conduct different types of transactions. Customers receive goods and services for money (or for other goods and services, if
bartering is used). The functions of an e-market are the same as those of a physical marketplace; however, computerized systems
tend to make electronic markets much more efficient by providing more updated information and various support services, such as
rapid and smooth executions of transactions.
T3- E-tailing (the online selling of products and services) is growing rapidly. Computers, software, and electronics are the major
items sold online. Books, CDs, toys, office supplies, and other standard commodities also sell well. More successful are services sold
online, such as airline tickets and travel services, stocks, and insurance. The following characterise high sales volume: Hig h brand
recognition, A guarantee provided by highly reliable or renowned vendors, Digitised format (e.g. software, music or videos),
Relatively inexpensive items (e.g. office supplies, vitamins), Frequently purchased items (e.g. groceries, prescription drugs ),
Commodities with standard specifications (e.g. books, CDs, airline tickets), making
physical inspection unimportant, Well-known packaged items that cannot be opened even in a traditional store (e.g. foods,
chocolates, vitamins). E-tailing provides sellers many advantages including lower product costs, the ability to reach more customers,
and to change pricing and catalogues quickly. Buyers benefit too in lower prices, the ability to find and compare products and
services not available in the local area, and to purchase anytime, anywhere. The major e-tailing business models can be classified by
distribution channel – a manufacturer or mail-order company selling direct to consumers, pure-play (virtual) etailing, a click-and-
mortar strategy with both online and traditional channels, and online malls that provide either referring directories or shared
services. There are five important issues in electronic retailing. The first is disintermediation. Direct electronic marketing by
manufacturers results in disintermediation by removing wholesalers and retailers. However, re-intermediaries provide additional
value, such as helping consumers make selections among multiple products and vendors. Secondly, traditional retailers may feel
threatened or pressured when manufacturers decide to sell online. Such direct selling can cause channel conflict. Next, pricing online
and offline products and services is complicated, particularly for a click and mortar company. To avoid price conflict, some
companies have created independent subsidiaries. In addition, a significant characteristic of many online marketing business models
is the ability to customise and personalise products and services. This ability has significant implications for marketing strategy as
we will discuss in Topic 6. Furthermore, because it is so easy to start an online business, competition is strong. Finally, fraud and
other illegal activities is a major problem. Electronic retailing is not without its challenges. Some companies do not attempt to go on
line because their product is not appropriate or the costs are too high; others try but do not succeed. Many sites remain simple
‘brochure’ sites with limited interactivity. Mature transactional systems include features for payment processing, order fulfilment,
logistics, inventory management, and other services. For traditional retailers, major gains are made by having both a physical
presence and an online presence. They can link all their back-end systems to create an integrated customer experience.
T5- Mobile commerce (m-commerce or m-business) is any business activity conducted over a wireless telecommunications network
or from mobile devices. M-commerce is a natural extension of e-commerce. M-commerce can help a business improve its value
proposition to customers by utilising its unique attributes: ubiquity (availability in any location); convenience (of increasing
functionality in small portable devices); interactivity (and immediacy); personalisation; and localisation. Currently, m -commerce is
being driven by large numbers of mobile devices; a developing ‘cell-phone culture’ among youth; demands from service-oriented
customers; vendor marketing; declining prices; a mobile workforce; improved performance for the price; and increased bandwidth.
The mobile computing environment consists of two key elements: mobile devices and wireless networks. Although mobile computing
devices vary in size and functionality, they are rapidly moving toward an all-in-one device that is rapidly overcoming some of the
limitations associated with poor usability, such as small screen size, limited band-width, and restricted input capabilities. Even with
their limitations, mobile devices offer a series of support services, and Mobile devices connect in a wireless fashion to networks or
other devices at a personal, local metropolitan, or wide area level. Bluetooth (personal), cellular phone networks (WWAN), and
wireless LANs (like WiFi) are well known technologies that are well established in the wireless marketplace. Location-based m-
commerce (l-commerce) refers to the delivery of m-commerce transactions, using positioning devices such as a global position
system (GPS), to individuals in a specific location, at a specific time. Services focus on five key factors: location (determining
position); navigation (plotting a route); tracking (monitoring movement); mapping (of specific geographical locations); timing (at a
specific location). These services require five basic components: mobile devices (to request information); communication networks (to
transfer user requested data); positioning component (to process a user’s request, for example, by using a GPS); service or
application providers (responsible for servicing a user’s request by, for example, finding routes, or searching information sources);
and data or content providers (responsible for maintaining the requested data). There are special challenges for security in the
mobile computing environment. These challenges include the need to secure transmission over open air and through multiple
connecting networks; the useability of devices; and, ethical, legal, and health issues that can arise from the use of m-commerce,
especially in the workplace.
T4-B2B EC (transactions between business, conducted electronically over the Internet, extranets, intranets, or private networks)
accounts for 77% to 85% of all EC and has some special characteristics as well as specific concepts, characteristics and models. The
number of sellers and buyers and the form of participation used in B2B determine three basic B2B transaction types: sell-side (one
seller to many buyers); buy-side (one buyer from many sellers); and trading exchanges (many sellers to many buyers). In addition,
intermediaries and support services sometimes also play an important role in these transactions. B2B transactions can be
characterised in four ways: 1. Parties to the transactions - sellers, buyers and intermediaries 2. Types of transactions – spot buying
(the purchase of goods and services as they are needed, usually at prevailing market prices) and strategic sourcing (purchases
involving long-term contacts that usually are based on private negotiations between sellers and buyers) 3. Types of materials used –
direct materials (materials used in the production of a product, e.g. steel in a car) and indirect materials (materials used to support
production, e.g. office supplies) 4. The direction of the trade – vertical marketplaces (markets that deal with one industry or
industry segment, e.g. steel , chemicals) and horizontal marketplaces (markets that concentrate on a service, material, or a product
that is used in all types of industries, e.g. office supplies). One to many (sell-side) models-One-from-many (buy-side) models-B2B
Exchanges (many sellers to many buyers).
T6- It is described in a stimuli-based decision model that has two parts: influencing factors and the attitude-behaviour process. The
consumer’s personal characteristics (e.g. demographic and behavioural characteristics); 2. Environmental characteristics such as
culture; 3. Merchant and intermediary characteristics (e.g. brand reputation, trustworthiness, policies and procedures,
compensation and apology); 4. Product/service characteristics; 5. EC systems like payment and logistics support, technology, and
customer service). The first three are considered uncontrollable from the seller’s point of view. The last two are mostly controlled by
the seller. The consumer’s online decision-making processes, there are five phases in a generic purchasing decision model: 1. Need
identification 2. Information search 3. Evaluation of alternatives 4. Purchase delivery 5. Post-purchase behaviour. The phases do not
necessarily proceed in this order. Good online marketing generates customer satisfaction similarly, trust is a critical success factor
that must be nourished. Trust in EC can be increased by: 1. Improving the quality of the website 2. Affiliating the customer with
trusted third parties (e.g. internet stores can put hypertext links on their Web sites to trusted targets, including reputable
companies or well-known portals); and, 3. Establishing integrity (e.g. offering a money-back guarantee), competence (e.g. by
delivering a professional website), and security (e.g. by providing secure online shopping guarantees). Traditional marketing efforts
are targeted to everyone (the ‘masses’) using advertising mediums such as newspapers and TV. It’s effective for brand recognition or
product launches, and can be conducted on the Internet for example through banner ads. Market segmentation divides a mass
market into logical groups so that marketing and advertising efforts can match market segments and improve response rates.
Because competitors can adopt similar market segmentation strategies, one-to-one marketing shifts the focus to building unique
relationships with individual customers. Web advertising attempts to attract web surfers to an advertiser’s site. Once at the
advertiser’s site, consumers can receive information, interact with the seller, and place an order. With Web advertising, ads can be
customised to fit groups of people with similar interests (segmentation), or individuals (one-to-one). In addition, Web advertising
can be interactive, is easily updated, can reach millions at a reasonable cost, and offers dynamic presentation and rich multimedia.
Banners (on a Web page, a graphic advertising display linked to the advertiser’s Web page) are the most popular online advertising
method. Other frequently used methods are popups (an ad that appears in a separate window before, after, or during Internet
surfing or when reading e-mail) and similar ads (e.g. pop-unders – an ad that appears underneath the current browser window, so
when the user closes the active window the ad is still on the screen), e-mail (including e-mail to mobile devices), classified ads,
registration of URLs with search engines, and advertising in chat rooms. Some of these are related to search results obtained
through search engines such as keyword advertising (especially Google).
T7-: Basic security problems and issues To be a success, EC must be secured. However, EC security is not an easy task. There are
many unintentional, as well as intentional hazards. Security incidents and breaches interrupt EC transactions and increase the cost
of doing business online. There are four major drivers of EC security problems. protecting the EC system: Information Assurance (IA)
is the ultimate goal of EC security. The IA model is the process for protecting information by ensuring its confidentiality (the
assurance of data privacy); integrity (the assurance that data is accurate or that a message has not been altered); , and, availability
(the assurance that access to data, the Web site, or other EC data services is timely, available, reliable, and restricted to authorised
users). This model is known as the Confidentiality Integrity Availability (CIA) security triad. All CIA functions depend on
authentication (evidence in the form of credentials), authorisation (comparing information provided with control information, and
nonrepudiation (ensuring that a party in a dispute cannot repudiate or refute the validity of a statement or contract). Network
security depends on access control (mechanisms that determine who can legitimately use a network resource). Access control
involves authorisation. Securing EC networks The major components for protecting internal information flow inside organisations
are: firewalls; the device authenticates, controls, and logs all traffic); demilitarised zones, providing physical isolation between the
two networks that is controlled by rules enforced by a firewall); virtual private networks (VPNs) a network that uses the public
Internet to carry information but remains private by using encryption to scramble the communications, authentication to ensure
that information has not been tampered with, intrusion detection systems (IDSs) is software that can monitor activity across a
network, watch for suspicious activity and take automated action based transactions; and, honeynets and honeypots. protecting
hardware and controlling access to the data centre are independent of the specific application, business continuity and disaster
recovery planning is an integral part of effective internal control and security management. Business continuity planning includes
back-up sites and a plan for what to do when disaster strikes. Payment cards are electronic cards that contain information that
can be used for payment purposes. There are three types: credit, charge and debit. Payment cards predominate in the online world
because the processing of online card payments is essentially the same as it is for brick-and-mortar stores involving the same
players and the same systems; banks, card associations, and payment processing services.
T8- The efficient execution of the entire order fulfilment process, which may be complex along a long supply chain, is a critical task
for all organisations. Order fulfilment refers to all the activities needed to provide customers with their ordered goods and services,
including related customer services. It involves both back-office operations such as packing, delivery, accounting and logistics; and,
front-office operations such as sales and advertising which are visible to customers. Logistics are the operations involved in the
efficient and effective flow and storage of goods and services, and related information from point of origin to point of consumption.
Typically, e-logistics involves small parcels sent to many customers (in B2C). The EC order fulfilment process involves: making sure
the customer will pay, checking for stock availability, arranging shipment, insurance, replenishment of stock, in-house production,
use of contractors, contracts with customers, and returns. Supporting administrative activities involve: handling a product e nquiry,
providing a sales quote, configuring, booking, and acknowledging the order; sourcing the product; making changes to the order (if
needed); releasing the order for shipment; then delivery, settlement and returns. T8- Payment cards are electronic cards that
contain information that can be used for payment purposes. There are three types: credit, charge and debit. Payment cards
predominate in the online world because the processing of online card payments is essentially the same as it is for brick-and-
mortar stores involving the same players and the same systems; banks, card associations, and payment processing services. Supply
chain problems include: an inability to deliver products on time; high inventory costs; quality problems due to misunderstandings;
the shipment of wrong products, materials, or parts; and, the cost to expedite operations or shipments. In B2C EC these problems
are exacerbated by having to pick and pack small packages to many customers’ doors. The result is often improper inventory le vels,
poor delivery scheduling and mixed-up shipments. Difficulty in estimating demand is another typical supply chain problem. These
problems result from the need to co-ordinate several activities, internal units and business partners simultaneously, and from
uncertainties in demand. However, solutions to order fulfilment problems along supply chains include: improving the order-taking
and payment systems; improving warehousing and inventory management systems (including using warehouse management system
(WMS) software, automating warehouses and using wireless technologies such as Radio frequency identification (RFID); changing the
structure and processes of the supply chain; speeding deliveries; partnering with other companies; integrating global logistics
systems; using intelligent factories to fulfil orders that involve customised products or personal services; effectively handling returns;
and, using business process management (BPM) software or e-market-places and exchanges to ease order fulfilment problems in
B2B.

Q1 Assume you have been invited to deliver a guest presentation about electronic strategy (EC strategy). Using an example
organisation from your country or region, make some notes for your presentation structured around five key considerations of
strategy initiation.-Strategy initiation involves understanding the company, the industry and the competition. Essentially,
Electronic Commerce (EC) can facilitate value creation and/or lower the cost of providing goods and services. • There are a number
of questions to consider, including: o Should we be a first mover or a follower? The advantages include: an opportunity to make a
first and lasting impression; to establish strong brand recognition; to lock in strategic partners; and to create switching costs for
customers. The disadvantages include: the high cost of pioneering EC initiatives; making mistakes; and the chance that a second
wave of competitors will eliminate your advantage. o How do we manage channel conflict? o Should we create a separate company
or online brand? The advantages include: reduction/elimination of internal conflicts; more freedom for management in pricing,
advertising and building a new brand quickly; the opportunity to build new, efficient information systems; and, an influx of funding.
The disadvantages include: high costs and risks; and, the inability to leverage off the existing business functions. o Should we be born
on the net, or move to the net? It is frequently easier to be born on the net and build a new web-based value chain, than to change
an established one where success depends on leveraging established strengths. o What is the scope of our business? How can we
expand the scope without threatening our existing value proposition? That is, what else do our customers want to buy in addition
to the products and services we currently offer? • With the proliferation of the Web 2.0 tools, companies should also consider
strategies related to Web 2.0 and social networking to help employees, partners, suppliers, and customers to work together
Q 2 The efficient and effective flow of information and materials along a supply chain is a source of competitive advantage. Assume
you will make a presentation to the Managing Director of an organisation in your country or region, on how electronic -supply
chain management (eSCM) can improve operations of its supply chain activities, and the management of its supply chains. Prepare
some notes for your presentation structured around e-SCM problems and solutions.-The efficient execution of the entire order
fulfilment process, which may be complex along a long supply chain, is a critical task for all organisations. Order fulfilments refers
to all the activities needed to provide customers with their ordered goods and services, including related customer services. It
involves both back-office operations such as packing, delivery, accounting and logistics; and, front-office operations such as sales and
advertising which are visible to customers. Logistics are the operations involved in the efficient and effective flow and storage of
goods and services, and related information from point of origin to point of consumption. Typically, e-logistics involves small parcels
sent to many customers (in B2C). • The EC order fulfilment process involves: making sure the customer will pay, checking for in-
stock availability, arranging shipment, insurance, replenishment of stock, inhouse production, use of contractors, contracts with
customers, and returns. • Supporting administrative activities involve: o handling a product enquiry, providing a sales quote,
configuring, booking, and acknowledging the order o sourcing the product o making changes to the order (if needed) o releasing the
order for shipment o Then delivery, settlement and returns. • Supply chain problems include: o an inability to deliver products on
time o high inventory costs o quality problems due to misunderstandings o the shipment of wrong products, materials, or parts o
the cost to expedite operations or shipments. o In B2C EC these problems are exacerbated by having to pick and pack small
packages to many customers’ doors. The result is often improper inventory levels, poor delivery scheduling and mixed-up shipments.
o Difficulty in estimating demand is another typical supply chain problem. o In addition, inefficient financial supply chains (that is,
the flow of information and money including invoicing, payment, and collection) can be a problem. • However, solutions to order
fulfilment problems along supply chains include: o improving the order-taking and payment systems.
Q 3 Assume you have been appointed to the position of Security Manager for an organisation in your country or region. Identify
three potential security issues, and discuss how the organisation can protect itself against these three security issues.
To be a success, EC must be secured. However, EC security is not an easy task. There are many unintentional, as well as intentional
hazards. Security incidents and breaches interrupt EC transactions and increase the cost of doing business online. • There ar e three
major drivers of EC security problems. o First, the Internet’s design is vulnerable, and the temptation to commit computer crime is
increasing with the increased applications and volume of EC. o Second, criminals are expanding operations. In the early days of EC,
hackers were motivated by fame or notoriety. Now, they are motivated by profit, creating an underground economy of stolen
valuable information. o Finally, EC systems are changing all the time creating new security threats particularly from insiders. • An
EC security strategy is necessary to optimise efficiency and effectiveness for several reasons. o First, EC security costs an d efforts
from reacting to crises and paying for damages are greater than if the organisation had an EC security strategy. o Second, the
internet is still a fundamentally insecure infrastructure. There are many criminals, and they are intent on stealing information for
identity theft and fraud. o Finally, without a strategy, EC security is treated as a project instead of an ongoing, never-ending
process. • EC security is a battleground between attackers, defenders and items that are being attacked. Owners of EC sites
(defenders) need to be concerned with multiple security issues including: o authentication (verifying the identity of the participants
in a transaction) o authorisation (ensuring that a person or process has access rights to particular systems or data) o auditing
(being able to determine whether particular actions have been undertaken and by whom) o confidentiali ty (ensuring that
information is not disclosed to unauthorised individuals, systems or processes) o integrity (protecting data from being altered or
destroyed) o availability (ensuring that the data and services are available when needed) o non-repudiation (the ability to limit
parties from refuting that a legitimate transaction took place). • An EC security strategy views EC security as the process of
preventing and detecting unauthorised use of the organisation’s brand, identity, website, e-mail, information, or other asset and
attempts to defraud the organisation, its customers, and employees. o Deterrent measures refer to actions that will make criminals
abandon their idea of attacking a specific system (e.g. the possibility of losing a job for insiders). o Prevention measures refer to
ways to help stop unauthorised users (also known as ‘intruders’), from accessing any part of the EC system. o Detection measures
refer to ways to determine whether intruders attempted to break into the EC system, whether they were successful, and what they
may have done.

Q 4 Assume you have been appointed Marketing Manager. The strategic plan identifies that its customers are switching e-loyalty
quickly and easily. Your Managing Director has asked you to give a presentation to the Board about how the organisation could
improve its customer loyalty online. Recommendations about how the organisation could improve its customer loyalty.
Good online marketing generates customer satisfaction, loyalty and trust. Influencing customer satisfaction and enhancing e-loyalty
(e.g. through e-loyalty programs) is a must. • Similarly, trust is a critical success factor that must be nourished. Building trust is
very difficult since people do not know or see each other. Trust is influenced by many variables involving the internet merchant, the
shopping channel and the business and regulatory environment, such as consumer endorsement, co-branding, alliances/affiliates,
web design, return policy, free samples, and simplicity of shopping. • Trust in EC can be increased by: o Improving the quality of the
website. o Affiliating the customer with trusted third parties (e.g. internet stores can put hypertext links on their websites to
trusted targets, including reputable companies or well-known portals). o Establishing integrity (e.g. offering a money-back
guarantee), competence (e.g. by delivering a professional website), and security (e.g. by providing secure online shopping guarantees).
• The biggest difference between EC marketing and traditional forms of marketing is that it offers companies the opportunity to
build one-to-one relationships with customers that are not possible in other marketing systems. Traditional marketing efforts are
targeted to everyone (the ‘masses’) using advertising mediums such as newspapers and TV. It’s effective for brand recognition or
product launches, and can be conducted on the Internet, for example, through banner ads. Market segmentation divides a mass
market into logical groups so that marketing and advertising efforts can match market segments and improve response rates.
Because competitors can adopt similar market segmentation strategies, one-to-one marketing shifts the focus to building unique
relationships with individual customers. • Product customisation, personalised service, and getting the customer involved
interactively (e.g. in feedback, order tracking, and so on) are all practical in cyberspace. • Using personalised web pages, customers
can interact with a company, learn about products or services in real time, or get customised products or services. Personalisation
includes recommendation of products (services) and delivering content that customers want.