BBM / Seventh Semester / ITC 311: E-Commerce

Full Marks: 40
Time: 2 hrs

Candidates are required to answer all the questions in their own words as far as practicable.
Group “A”
Brief Answer Questions: [5 1 = 5]
1. What is ecommerce?
Ans: E-Commerce may be defined as the application of information and
communication technologies (ICT) in support of all the activities for conducting
commerce. Commerce constitutes the exchange of products and services between
businesses, groups and individuals and can be seen as one of the essential
activities of any business. Electronic commerce focuses on the use of ICT to
enable the external activities and relationships of the business with individuals,
groups and other businesses.
E-Commerce is a methodology of modern business, which addresses the need of
business organizations, vendors and customers to reduce cost and improve the
quality of goods and services while increasing the speed of delivery.

2. What is information super highway?

Ans: The information superhighway is a term coined by former Vice President of USA
Albert Gore when giving a speech on January 11, 1994 describing the future of
computers accessing and communicating over a world-wide network. Basically,
the term information superhighway describes a high-capacity (broadband),
interactive (two-way) electronic pipeline to the home or office that is capable of
simultaneously supporting a large number of electronic commerce applications
and providing interactive connectivity between users and services and between
users and other users.
3. Define Digital signature.
Ans: Digital signatures enable the recipient of information to verify the authenticity of
the information’s origin, and also verify that the information is intact. Thus,
public key digital signatures provide authentication and data integrity. A digital
signature also provides non-repudiation, which means that it prevents the sender
from claiming that he or she did not actually send the information.

4. Write use of Bluetooth.

Ans: These days it feels like everything is wireless, and Bluetooth is a big part of that
wireless revolution. You’ll find Bluetooth embedded into a great variety of
consumer products, like headsets, video game controllers, music systems,
transfer files wirelessly between mobile devices and computers. You can pair a
smart-phone or tablet and a laptop or Bluetooth-enabled PC together and use
Bluetooth to wirelessly send files back and forth. If you don't have your USB
cable with you or you just like to use wireless file transfers, this can be useful.

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5. Define social media.
Ans: Social media is a form of electronic communication (as websites for social
networking and micro blogging) through which users create online communities
to share information, ideas, personal messages, and other content (as videos).
Social media offers a great opportunity to discover new information, connect and
interact with others, and share their perspectives. The inseparable presence of
social media in the daily lives provides a great boost to market the business.

Group “B”
Short Answer Questions: [5 3 = 15]
6. Explain B2B commerce.
Ans: B2B commerce is a form of business model in which a business organization sells
its products to an intermediate buyer who then sells the product to the final
customer. As an example, a wholesaler places an order from a company's website
and after receiving the consignment, sells the end-product to the final customer
who comes to buy the product at one of its retail outlets. A company buys raw
materials or subcomponents from other companies to produce its own product.

Examples: MYOB.com, firerock.us, partsnow.com, Medline.com, staples.com,

Alibaba.com, etc.
7. List the benefits of ecommerce.
Ans:
Benefits to Organizations
 Organizations can expand their market to national and international markets with
minimum capital investment.
 Helps organizations to reduce the cost to create process, distribute, retrieve and
manage the paper based information by digitizing the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organizations to provide better customer service.

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  E-commerce helps to simplify the business processes and makes them faster and
efficient.
 E-commerce reduces the paper work.
 E-commerce increases the productivity of organizations.
Advantages to Consumers
 It provides 24x7 supports.
 E-commerce application provides users with more options and quicker delivery of
products.
 E-commerce application provides users with more options to compare and select
the cheaper and better options.
 A customer can put review comments about a product and can see what others are
buying, or see the review comments of other customers before making a final
purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see the relevant detailed
information within seconds, rather than waiting for days or weeks.
Advantages to Society
 Customers need not travel to shop a product, thus less traffic on road and low air
pollution.
 E-commerce helps in reducing the cost of products, so less affluent people can
also afford the products.
 E-commerce has enabled rural areas to access services and products, which are
otherwise not available to them.
 E-commerce helps the government to deliver public services such as healthcare,
education, social services at a reduced cost and in an improved manner.

8. What do you mean by social factors of e-environment.

Ans: Social factors of e-environment refer to those factors, based on society, that influence the
adoption of e-commerce services.
Social factors important in governing adoption of any e-commerce services are;
1. Cost of access: Includes,
 Cost of home computers.
 Cost of using an ISPs to connect to internet
 Cost of using media to connect (Telephone or cable charges)
2. Value Proposition:
Customers need to perceive a need to be online–what can the Internet offer
that other media cannot? Examples of value propositions include access to
more supplier information and possibly lower prices.
3. Ease of use:
This includes the ease of first connecting to the Internet using the ISP and
the ease of using the web once connected.
4. Security:
While this is only, in reality, a problem for those who shop online, the
perception generated by news stories may be that if you are connected to
the Internet then your personal details and credit card details may not be
secure. It will probably take many years for this fear to diminish has using

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 the Internet slowly becomes established as a standard way of purchasing
goods.
5. Fear of the unknown:
Many will simply have a general fear of the technology and the new
media, which is not surprising since much of the news about the Internet
non-adopters will have heard will concern pornography, fraud and privacy
infringements.

9. Explain importance of firewall for organizations.

Ans: Firewall is extremely beneficial and necessary security tool that organizations need to
implement in their network. There are so many ways that information can be shared over
the internet either by an organization’s employee or by hackers trying to break into the
network. Thus organizations need to implement a security device such as a firewall to
protect them from the world (internet).
Almost every medium and large-scale organization has a presence on the Internet
and has an organizational network connected to it. Network partitioning at the
boundary between the outside Internet and the internal network is essential for
network security. Sometimes the inside network (intranet) is referred to as the
“trusted” side and the external Internet as the “un-trusted” side.
Firewall is a network device that isolates organization’s internal network from
larger outside network/Internet. It can be hardware, software, or combined system
that prevents unauthorized access to or from internal network. All data packets
entering or leaving the internal network pass through the firewall, which examines
each packet and blocks those that do not meet the specified security criteria.

Deploying firewall at network boundary is like aggregating the security at a single

point. It is analogous to locking an apartment at the entrance and not necessarily
at each door.
Firewall is considered as an essential element to achieve network security for the
following reasons:
 Internal network and hosts are unlikely to be properly secured.
 Internet is a dangerous place with criminals, users from competing
companies, disgruntled ex-employees, spies from unfriendly countries,
vandals, etc.
 To prevent an attacker from launching denial of service attacks on
network resource.
 To prevent illegal modification/access to internal data by an outsider
attacker.

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10. Explain the importance of search engine for organizations.
Ans: Search Engines essentially act as filters for the wealth of information available on
the Internet. They allow users to quickly and easily find information that is of
genuine interest or value to them, without the need to wade through numerous
irrelevant web pages.
The goal of the Search Engines is to provide users with search results that lead to
relevant information on high-quality websites. To attain and retain market share in
online searches, Search Engines need to make sure they deliver results that are
relevant to what their users search for. They do this by maintaining databases of
web pages, which they develop by using automated programs known as "spiders"
or "crawlers" to collect information. Type the name of a major brand into a search
engine, and you will most probably be served a wide range of search results that
include not only the official website of the brand you searched for, but also other
websites, consumer review sites, Blogs, online articles and press releases. Search
Engines matter because they increasingly determine the information about brands,
products and services that customers access online. Being easy to find on Google,
Yahoo and MSN is now as much of a marketing necessity as having a strong
presence in print and broadcast media, or an effective traditional direct marketing
program. And as consumers and organizations come to rely more heavily on them
to find the goods, services and suppliers they need, the importance of the Search
Engines to modern businesses can only increase.
With having such a huge potential, search engines can be beneficially used by
business organizations as a tool for marketing their products by the process of
search engine optimization, which is the process of maintaining the visibility of
its content in the front list of the search result.
Group “C”
Analytical Questions: [2 10s = 20]
11. Why is there threat of leaking message and data while doing online activities? How the
threat can be reduced or eliminated?
Ans: Data or message leakage is the unauthorized transmission of data (or
information) from within an organization to an external destination or recipient.
This may be electronic, or may be via a physical method.
We all known the fact how “data” is changing the face of our world. It
might be helping to cure a disease, boost a company’s revenue, make a building
more efficient or be responsible for those targeted ads you keep seeing.
The importance of data cannot be under-stated as it provides the basis for
reporting the information required in business operations. Therefore to retain the
importance and usefulness of data to any individual or organizations, measures
should be taken to protect the exposure of data. It should only be exposed to those
who have the authority to access it. Unlikely exposure of data could be very
critical and incur a huge loss to any organization. For example there are trade
secrets and various critical business decision information and confidential matters
that an organization should protect from reaching in wrong hands, Consumers
must be aware of the misuse of personal information.
With the growing tendencies of moving everything towards online
systems, either it be social interactions, business processes, or government
processes, there is a huge volume of information flow and data saturation

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occurring in the online scenario growing exponentially at the rate of around 4 to 5
times in volume every year as per the latest statistics. For the adjustment of such a
scale of data processing online, more and more new forms of communication has
been developed. Because more forms of communication are being utilized within
organizations, such as Instant Messaging, VOIP, etc, beyond traditional email,
more avenues for data leakage have emerged.
Data leakage does not occur only due to the negligence from within the
system, there are evil people trying to steal data to fulfill their motives. There
could be an intruder eaves dropping a conversation between any legitimate
parties, or getting access into your computer to steal your confidential
documents or intellectual properties, etc.
The possible reasons for data leakage while doing online activities are;
 Intentional leakage or sabotage: Intentional unauthorized release of data
and information by internal users. The methods by which insiders leak
data could be one or many, but could include mediums such as Remote
Access, Instant Messaging, email and even File Transfer Protocol.
Motivations are varied, but include reasons such as corporate espionage,
financial reward, or a grievance with their employer.
 Unintentional leakage: Occurs because of employee oversight or poor
business process. Includes publishing of confidential data due to not
having much knowledge about it or due to negligence or due to poor
editorial work.
 Data theft by intruders: Electronic break-in to an organization by
intruders including the theft of sensitive information like stealing credit
card information, intellectual properties, trade secrets, etc by the method
of hacking.
 Phishing: Fooling people for acquiring information by using phishing
sites (fraudulent websites), and spam emails.

These threats of data leakage can be reduced or minimized by considering the

following things;
 Regularly monitor the web traffic entering and leaving the internal system
for any discrepancies using various monitoring tools.
 Regulate different authority levels among personnel in terms of the access
to data and functions.
 Implement secured mechanism or technologies while communicating
sensitive information. Use protocols such as SSL, SET, etc.
 Use digital signatures to attest your documents to provide authenticity to
your documents and to impose non-repudiation.
 Use firewalls or Intrusion detection/prevention systems to monitor the web
traffic entering and leaving the internal system or to control the web
access behaviors of the employees.
 To prevent intentional and unintentional leakage, business processes will
need to be examined, and probably re-engineered, personnel will need to
be retrained, and a cultural change may be required within the
organization.

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12. Should organizations adopt online marketing strategies? Explain your position.
Ans: Yes of-course any organization must adopt online marketing strategies. A strong online
presence is essential for any successful business. Online marketing helps improve your
online visibility and gives customers access to your company all day, every day.
Channeling your time and resources towards online marketing will boost credibility, sales
and overall success.
The influx of social media has skyrocketed over the past few years. The on-going
and increasing demand of customers online has confirmed that the reality of social media
is not one trend, but one that is here to stay, permanently. Social media does not only
entail a place where people socialize, but has also become one of the preferred places to
search for products and services.
The benefits of connecting to social media platforms are vast; increases exposure
and traffic, generates leads, reduces marketing expenses, improves your online search
ranking, grows your customer base and develops loyal fans. By learning where your
audience is, on which platforms they are active and what platforms they are searching on
is fundamental in identifying how to further grow your business.
Lack of an online marketing strategy compromises your ability to set goals for
broadening your customer base and retaining the customers that you have. Without goals,
you will be unable to allocate resources efficiently and determine whether or not you are
making progress. Being aware of your share of the online market requires you to invest
adequate resources in marketing. Marketing enables you to gain insight into the market,
customers, shopping behavior and competition among other factors. If you do not have a
strategic approach and your online marketing strategies are not well defined, you may
end up falling behind your competitors as they implement their strategies.
With the rapid shift from analogue to digital, more people are looking for online
content every day on their mobile devices. Companies which are not aware of this trend
need to adapt accordingly. Online marketing is important because of the integral role it
plays in the current marketing industry and has taken over from conventional marketing
options.
Online forms of communication provide more speed, versatility and structure.
Advancements in technology have contributed to the rapid acceptance of digital
communication. Online marketing is executed in a variety of ways, including websites,
content, blogging, social media and mobile. Although traditional media is still highly
relevant, technology has made the web more accessible. A company that sets up an online
marketing strategy is able to keep up with technological advancements and tech savvy
competitors.
Online marketing provides one of the most affordable ways for businesses to
promote their products and services. It usually costs much less to set up a website and
strengthen online presence with marketing strategies such as social media marketing in
comparison to traditional marketing.
Handling your marketing efforts online makes it easier to track and monitor your
progress. Instead of carrying out costly market research, real time viewing of how your
customers respond and measuring campaign success can help you work out your next
strategy.
Including online marketing in your overall strategy gives you access to the high
percentage of people who go online on a daily basis, i.e. you can gain wider reach.

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The internet has allowed businesses to have a wider reach on a global scale. The cost of
using conventional or offline media typically restricts this level of reach with established
businesses dominating traditional marketing. Online marketing opens new doors of
opportunities for smaller businesses that have tighter budgets so that they can reach out to
more customers around the world.
Conventional marketing techniques are associated with a one way mode of
spreading the message about brands while online marketing encourages interaction.
Increased interactivity makes it possible for companies to get responses from consumers
and be more adaptive.
Online marketing has the ability to make a direct and faster impact. It makes it
possible to move from viewing products to purchasing them quickly. With the click of a
button you can make bookings to try out products or order the latest device on the
market. Such acquisitions can be made regardless of the time or location and enables
business to function on a 24 hour basis. The internet speeds up the buying process and
yields faster returns for businesses.
Starting an online marketing campaign helps you increase awareness for your brand.
Using high quality content or social networking as marketing techniques can drive more
traffic to your site. An increase in the number of users who visit your site increases the
prospect of sales. Enabling your customers to buy what they want online instead of
limiting them to being physically present at your business premises will increase impulse
purchases. This will boost profitability for your business and make your marketing efforts
worthwhile.
Busy lifestyles can influence whether or not customers are able to go shopping
within the usual business hours. Online marketing strategies give customers the option of
going online to find what they need regardless of where they may be or what time it is.
Marketing online enables companies to customize their messages according to the
target market. The strategies help you structure your promotions in ways that will make
the target audience receptive. Through resources such as subscriptions, consumers can be
kept aware of any new developments or products in future after they make their
purchases.

13. What do you mean by competitive forces?

Ans:
Competitive forces are the factors that influence the competitive position of
a company in an industry or market. Michael E. Porter's five forces include three forces
from 'horizontal' competition--the threat of substitute products or services, the threat of
established rivals, and the threat of new entrants--and two others from 'vertical'
competition--the bargaining power of suppliers and the bargaining power of customers.

Five Forces
I. Threat of new entrants
Profitable industries that yield high returns will attract new firms. New
entrants eventually will decrease profitability for other firms in the industry. Unless
the entry of new firms can be made more difficult by incumbents, abnormal
profitability will fall towards zero (perfect competition), which is the minimum
level of profitability required to keep an industry in business.

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 The following factors can have an effect on how much of a threat new entrants
may pose:
 The existence of barriers to entry (patents, rights, etc.). The most attractive
segment is one in which entry barriers are high and exit barriers are low. It's
worth noting, however, that high barriers to entry almost always make exit more
difficult.
 Government policy
 Capital requirements
 Absolute cost
 Cost disadvantages independent of size
 Economies of scale
 Product differentiation
 Brand equity
 Switching costs
 Expected retaliation
 Access to distribution channels
 Customer loyalty to established brands
 Industry profitability (the more profitable the industry, the more attractive it will
be to new competitors)
 Network effect

II. Threat of substitutes

A substitute product uses a different technology to try to solve the same
economic need. Examples of substitutes are meat, poultry, and fish; landlines
and cellular telephones; airlines, automobiles, trains, and ships; beer and wine;
and so on. For example, tap water is a substitute for Coke, but Pepsi is a
product that uses the same technology (albeit different ingredients) to compete
head-to-head with Coke, so it is not a substitute. Increased marketing for
drinking tap water might "shrink the pie" for both Coke and Pepsi, whereas
increased Pepsi advertising would likely "grow the pie" (increase
consumption of all soft drinks), while giving Pepsi a larger market share at
Coke's expense.

Potential factors:
 Buyer propensity to substitute
 Relative price performance of substitute
 Buyer's switching costs
 Perceived level of product differentiation
 Number of substitute products available in the market
 Ease of substitution
 Availability of close substitute

III. Bargaining power of customers

The bargaining power of customers is also described as the market of outputs:
the ability of customers to put the firm under pressure, which also affects the
customer's sensitivity to price changes. Firms can take measures to reduce

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 buyer power, such as implementing a loyalty program. Buyers' power is high
if buyers have many alternatives. It is low if they have few choices.

Potential factors:
 Buyer concentration to firm concentration ratio
 Degree of dependency upon existing channels of distribution
 Bargaining leverage, particularly in industries with high fixed costs
 Buyer switching costs
 Buyer information availability
 Availability of existing substitute products
 Buyer price sensitivity
 Differential advantage (uniqueness) of industry products
 RFM (customer value) Analysis
IV. Bargaining power of suppliers
The bargaining power of suppliers is also described as the market of inputs.
Suppliers of raw materials, components, labor, and services (such as
expertise) to the firm can be a source of power over the firm when there are
few substitutes. If you are making biscuits and there is only one person who
sells flour, you have no alternative but to buy it from them. Suppliers may
refuse to work with the firm or charge excessively high prices for unique
resources.
Potential factors are:
 Supplier switching costs relative to firmswitching costs
 Degree of differentiation of inputs
 Impact of inputs on cost and differentiation
 Presence of substitute inputs
 Strength of distribution channel
 Supplier concentration to firmconcentration ratio
 Employee solidarity (e.g. labor unions)
 Supplier competition: the ability to forward vertically integrate and cut
out the buyer.
V. Industry rivalry
For most industries the intensity of competitive rivalry is the major determinant of
the competitiveness of the industry. Having an understanding of industry rivals is
vital to successfully market a product. Positioning pertains to how the public
perceives a product and distinguishes it from competitors. A business must be
aware of its competitors marketing strategy and pricing and also be reactive to
any changes made.

Potential factors:
 Sustainable competitive advantage throughinnovation
 Competition between online and offline companies
 Level of advertising expense
 Powerful competitive strategy
 Firm concentration ratio
 Degree of transparency

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