By Ngoc Diem s3245569 Upload by RMIT Vietnam Helpdesk Team.

INTERNET FOR BUSINESS REVIEW

E-business Concepts & Implication
1. Explain the difference between e-business and e-commerce
o E-commerce: All electronically mediated information exchanges with external stake
holders.
o E-business: All electronically mediated information exchanges both within the
organization and with external stakeholders supporting the range of business processes.
2. Identify different types of sell-side websites and provide example
Sell-side e-commerce refers to transactions between a supplier organization and its customers.
There are 5 types of sell-side sites:

Transactional e-commerce sites: These enable purchase of products online. The sites also
support the business by providing information for customers that prefer to purchase products

offline. These include retail sites, travel sites, and online banking services (Amazon).
Services-oriented relationship-building web sites: provide information to stimulate purchase
and build relationships. Products are not available for purchase online, but information is
provided through the web site and e-newsletters to inform purchase decisions. Such sites also
add value to existing customers by providing them with detailed information to help support

them in their lives at work or at home (Price Waterhouse Cooper).

Brand-building sites: provide an experience to support the brand excluding online purchase.

They are typically for low-value, high-volume fast-moving consumer goods for customers.
Portal, publisher or media sites: portal refers to a gateway of information about a range of
topics. Portals have diversity of options for generating revenue including advertising,
commission-based sales, sale of customer data (Yahoo). Social network or community site
(Facebook).

3. Identify different types of business models. Explain three of them with example
Business model is a summary of how a company will generate a profit identifying its core
product or service value proposition, target customers in different markets, position in the
competitive online marketplace or value chain and its projections for revenue and costs.

E-shop: marketing of a company or shop via the web

E-procurement: electronic tendering and procurement of goods and services
E-malls: a collection of e-shops (Indigo Spuare)
E-auctions: eBay is the best-known example and offers both B2B and B2C offerings
Virtual communities: can be B2C communities such as the major social networks or B2B

communities such as built around trade publishers

Collaboration platforms: enable collaboration between businesses or individuals (Yahoo)
Third-party marketplaces: are described in Focus on electronic B2B marketplace
Value-chain integrators: offer a range of services across the value chain
Value-chain service providers: specialize in providing functions for a specific part of the
value chain (logistic company UPS)
-

E-auctions: e-auction is an online negotiation tool. The buyer with the lowest bid will
win the auction. eg: E-bay offers both B2B and B2C offerings
Value-chain service providers: specialize in providing functions for a specific part of
the value chain eg: logistics company UPS
Trust and Other Services: trust services authenticate the quality of service provided
by companies trading on website eg: Internet Shopping is Safe-ISIS, or TRUSTe

4. Indentify and classify the drivers and barriers of adoption of e-business for business
Drivers

Cost/efficiency drivers
Increasing speed with which supplies can be obtained
Increasing speed with which goods can be dispatched
Reduced sales and purchasing costs
Reduced operating costs
Competitiveness drivers
Customer demand
Improving the range and quality of services offered
Avoid losing market share to businesses already using e-commerce
Potential for increased revenue
Barriers:
Consumers doubt about mismatching between product and image display
Leaking out of important information
2

 Hackers
Lack of face-to-face contact
5. Understand the different internet revenue models
Revenue models describe methods of generating income for an organization

o Brokerage:
bringing buyers and sellers together
Kelkoo, eBay
o Advertising
Yahoo
Google sponsored links
Google content-targeted-advertising ads by google
o Infomediary ( information intermediaries)
DoubleClick
AC Nielsen NetRatings internet marketing research
o Merchant
Virtual retailer like Amazon
Catalogue Merchant like LandsEnd
o Manufacturer (Direct)
Dell
o Affiliate
Divert traffic to partner sites, eg Barnes & Noble
o Community
Access to the community is free but there is a charge for premium services.
Many dating sites use this and also business / software communities like RedHat.
o Subscription
Can be similar to the community model, eg FriendsReunited allows users to join
free but an annual subscription must be paid in order to contact other members
o Utility
This model is based on the electricity or water model, ie pay according to your
consumption. Slashdot offers subscriptions based on consumption of (access to)
IT related articles.

6. Discuss how the internet can restructure the market

The relationship between a company and its channel partners can be dramatically altered by the
opportunities afforded by the internet.

Disintermediation: the removal of intermediaries such as distributors or brokers that formerly

linked a company to its customers. It is able to remove the sales and infrastructure cost of

selling through the channel. (Example: Digital music, Video downloads to 3G phones)
Reintermediation: the creation of new intermediaries between suppliers and customers

providing services such as supplier search and product evaluation. (Example: Kelkoo)
Countermediation: creation of a new intermediary by an established company
7. Define digital marketing and provide example.

Digital marketing has a similar meaning to electronic marketing both describe the
management and execution of marketing using electronic media such as the web, e-mail,
interactive TV, and wireless media in conjunction with digital data about customers
characteristics and behavior. For example:

Feed or RSS feed: blogs, news or other content is published by an XML standard and
syndicated for other sites or read by users in RSS reader services such as Google Reader,

personalized homepages or e-mail systems.

Podcasts: individuals and organizations post online media which can be viewed in the

appropriate players.
Social network: a site that facilitates peer-to-peer communication within a group or between
individuals through providing facilities to develop user-generated content and to exchange
messages and comments between different users

E-Business Strategy Chaffey (2009) Chapter 5

1. How can you apply six decisions from strategy definition on any business? Explain
with example.

Channel priorities: Right channelling (p.298-300)

E Business strategy is a definition of the approach by which applications of internal and

external electronic communications can support and influence corporate strategy.

Decision 1: E business channel priorities

Right-channeling is selective adoption of e-channels by business for some products or markets in

order to best generate value for the organization according to stakeholder preferences
Examples

Application and tactics to achieve channel Typical

sector

and

adoption
company examples
Sell to and serve Using the internet for sales and service through an B2B
SMEs

through extranet to lower-sales-volume SME customers

online channels

who cannot be serviced direct through account

managers
Customer

Account-managed

channel

adoption

encouraged

by

convenience and lack of other options

Using face-to-face and phone meetings with large, B2B.

Account
5

relationships with high-sales-volume

larger
offline,

clients

through

account managers at Dell for

companies managers.
either Customer

larger clients
channel

adoption

encouraged

by

direct or through personal service and capability to negotiate service

partner companies levels and buying options
Selective service With integrated CRM systems, companies can The

practice

is

levels for different determine the value of customers and then assess common

amongst

customer types

services

where they are placed in queue or which call- financial

centre they are directed to

companies,
phone

mobile
network

providers and some

pureplays.

Decision 2: Organizational restructuring

Strategy process and performance improvement: The process for selecting, implementing
and reviewing e-business initiatives
Structure: Location of e-commerce and the technological capabilities through the
software, hardware infrastructure used and staff skills
Senior management buy-in: E-business strategies are transformational, so require senior
management sponsorship
Marketing integration: Staff members responsible for technology and marketing need to
work together more closely to achieve this
Online marketing focus: Strategic initiatives will focus on the three core activities of

customer acquisition, conversion and retention.

Decision 3: Business, service and revenue models

As well as new business and revenue models, constantly reviewing innovation in services to
improve the quality of experience offered is important for e-business. Flexibility in the business
model should not be to the companys detriment through losing focus on the core business.
Finally, we can note that companies can make less radical changes to their revenue models
through the internet which are less far-reaching nut may be worthwhile.

Decision 4: Marketplace restructuring

 Disintermediation: the removal of intermediaries such as distributors or brokers that

formerly linked a company to its customers. It is able to remove the sales and
infrastructure cost of selling through the channel.
Reintermediation: the creation of new intermediaries between suppliers and customers

providing services such as supplier search and product evaluation.

Countermediation: creation of a new intermediary by an established company
Decision 5: Market and product development strategies
Market penetration: involves using digital channels to sell more existing products into
existing markets.
Market development: existing products can be sold to new market segments or different
types of customers.
Product development: the web can be used to add value to or extend existing products for
many companies.
Diversification: new products are developed which are sold into new markets. The
internet can facilitate high-risk business strategies at lower costs than have previously

been possible.
Decision 6: Positioning and differentiating strategies
Product performance excellence: enhance by providing online product customization
Price performance excellence: use the facilities of the internet to offer favorable pricing
to loyal customers or to reduce prices where demand is low
Transactional excellence: combining pricing information with dynamic availability
information on products listing number in stock
Relationship excellence: personalization features to enable customers to review sales
order history and place repeat orders.

2. What are the key characteristics of an e-business strategy model?

The characteristics of a multi-channel e-business strategy are:

E-business strategy is a channel strategy

Specific e-business objectives need to be set to benchmark adoption of e-channels
Communicate the benefits of using e-channels
Prioritize audiences or partners targeted for e-channel adoption
Prioritize products sold or purchased through e-channel
7

Achieve our e-channel targets

E-channel strategies thrive on creating differential value for all parties to a transaction
BUT still need to manage channel integration
E-business strategy also defines how an organization gains value internally from using
electronic networks.
3. Provide some of the E-Marketing techniques mentioned in plan with example.

Search engine optimization: pay per click

Advantages: customers can access into webpage easily

Disadvantages: it causes traffic information in the website

Online PR: blogs and RSS

Advantages: website will be more attractive since customers can involve in exchanging
information. Furthermore, information can be transferred quickly and it is easy to create huge
effect on community due to large number of portal website users
Disadvantages: information posted by customers cannot be controlled

Online partnership: sponsorship for events, co-branding or affiliate marketing

Advantages: the brand name appears in the event if they sponsor for it.
Disadvantages: customers may not differentiate our brand names with others because many
businesses will take part in the event

Interactive ads: put an ads on the third party websites or place in our website

Advantages: increase effectiveness of ads

Disadvantages: customers pay less attention in other banners and ads in the third party websites

Opt-in email: e-mails are sent to customers

Advantages: it is the cheapest tactic

Disadvantages: customers are not willing to visit the website and less security for customer
information

Viral marketing: transmit a promotion message to another potential customers through wordof-moth

Advantages: easy to attract customers

4. How can you apply Treese and Stewarts 4 ACTS for an organization?
8

Strategy Implementation [A2a]

Attract (NOT Design)
Detailed in E-Marketing Plan (Week 4 & 5)
STP (p.437-443)
7Ps: focus on Promotion marketing communications
- Search Engine Marketing (SEM)
Search Engine Optimization (SEO): Organic (p.507-509)
Paid search marketing: Inorganic (p.509-510)
- Online PR (p.511-514)
- Online Partnerships (p.514-517)
- Advertising: Banners/pop-ups/interactive/integrated online and offline
(p.517-520)
- Emails: opt-in, opt-out, double pt-in (p.520-524)
- Viral marketing (p.524-526)
Interact (Design/ Usability)
A dynamic catalogue (in a database) that encourages buyers to move around the site and
view all the products.
Personalisation Amazon, heres a book you might like
Novelty
Navigation Easyjet, step 1of 5
Creative use of information
Transact
Payment process must be
Easy, fast and efficient to use
Secure
- Authenticates the data of the purchaser, including any credit card details
- Uses encryption and other security measures
Accepts standard methods of payment.
Automated
- Fulfilment of the order with the order process being handled by the back
end system of the business.
- The order will be a data transmission to the warehouse, with no human
interference.
React
Acknowledgement of order sent automatically to the purchaser.
Order tracking system that permits the purchaser to view the status of the order process.
Follow-up service (What the business can do, at a low cost, to encourage further orders.)
Knowledge base of FAQs
On-line chat for service enquiries.

E-CRM
1. What are the driving factors to adopt E-CRM?
-

Global competition makes products harder to differentiate

Technology allows all customer information to be integrated in one system, allowing the
restructuring of business processes

Customer is empowered, impatient, has a short attention span, many choices and low
switching costs

2. Provide three benefits of E-CRM with separate example for each benefit. (487)
-Targeting more cost effectively: traditional method which may target the wrong market

10

Example: The ABC Company wants to target affluent customers in Ho Chi Minh City and uses
postcodes of district 1, 2, 3 to reach them via direct mail. However, the population in each
district is heterogeneous, causing poor targeting and results in very low response rate. With the
application of E-CRM, the company can filter affluent customers easily and cost-effectively
based on frequency and value of each transaction saved in customer database.
-Lower cost: contact customers by email less cost than using physical mail. The most important
is the information only needs to be sent to those customers who have expressed a preference for
it, resulting less mail- out
Example: when doing targeting, FPT sends direct mail to the customers. This tactic allows the
company to reduce great expenses since while sending direct mails demands spending on postal
costs, adopting email costs it almost nothing.
-Increase depth, breadth and nature of relationship
Example, Dell provides customers specific information and frequently contact with them thus
Dell will increase the relationship with users and can know more about customers buying
behaviors.

3. Mention two tactics and one goal for each of the following. Provide at least one example
for each of the tactics to help the organization.(499-451)
Customer acquisition
Tactics
- From push to pull
Example: Advertisements are posted on portal sites (yahoo, MSN, etc), gaining customers
attention. This physical stimulus must be attractive enough to make customers want to visit the
site. Next, the site must be optimized for search engines (obtaining popular keywords, etc ) to
assist customers effectively when they try to find it.
-From one-to many to many to-many communications
11

Example: eBay allows many-to-many interactions between customers throughout eBay websites.
Goal
-

Acquire new customers to a website that can (hopefully) be converted into sales

Migrate offline customers to the online channel

Customer retention

Tactics:
-

Personalization and mass customization (extranets, opt-in email, promotions/ loyal

schemes)

Personalization: Delivering individualized content through web pages or e-mail.

Mass customization: Delivering customized content to groups of users through

web pages or email.

Examble: if a company gives their clients the option to tell their service center when and how to
contact them, that's also personalization. Amazon.com is an example of personalization where
the latter learns your interests and adapts to your need
Dell and many auto makers are good examples of companies providing mass customization
-

Online community: a customer-to-customer interaction delivered via e-mail groups, webbased discussion forums or chat (C2C: email groups, forums, chat)

Example: Forums are created to enhance the interaction between customers as well as between
customers and the site.

Goals:
-

To retain customers of the organization (repeat customers)

To keep customers using the online channel (repeat visits).

Customer extension (539)

Tactics:
-

Direct e-mail. Example: Sending direct e-mails to highly profitable/loyal customers

12

On-site promotion. Example: More promotions posted on the website for attracting more
customers to visit and purchase.

Goals:
-

Increase lifetime value (LTV) of customers

4. Mention four E-marketing communication techniques with the application example in an

organization for each. (511)
-

Online PR: maximizing favorable mentions of your company, products or websites

which are likely to be visited by your target audience. (Portal representation, social media
blogs, feeds and communities, media alerting services, brand protection)
Example: Yogurt creates a facebook account and regularly updates information about the
companys events, new products and promotional campaigns, etc. Comments are allowed
to increase the interaction with customers.

Viral marketing: E-mail is used to transmit a promotional message to another potential

customer. (pass along e-mails, buzz marketing, generating media mentions)
Example: A note on facebook about the development of Shoes Century/the topic of a new
advertising campaign is written in the form of a fairytale with interesting characters and
appealing content. To be effective, it must be interesting enough to make people want to
share with others. The more people send around this note (via facebook, leaving links on
Yahoo or other communities), the better customer awareness about Shoes Century and its
campaign.

Search engine marketing SEM: provide an index of content on registered sites that can
be searched by keywords. It is the primary method of finding information about a
company and its product
Example: Shoes.com looks for the most popular keywords by using Alexa (an website
analysis tool) and utilizes them in its meta tags or headings to improve SEO of the site,
which will consequently lead more customers to Shoes.com.

Online partnership (affiliate marketing, sponsorship, co-branding, link-building, widget

marketing)

Example: Ninomax and Vnexpress.net builds an online partnership in the form of

affiliate marketing. Links to Ninomaxs website will be posted on Vnexpress.net and whenever

13

products are purchased or leads are generated for Ninomax, Vnexpress will earn a transaction fee
accordingly

5. Explain the relation for Google search with Search engine marketing? You can draw
the Google search page and highlight different Search engine marketing techniques
there.(505)

6. How can social networking website be used for viral marketing? Explain with
example.
-

Viral marketing: Social networking website is used as a tool for viral marketing. Pass
along messages/note (a clever/shocking idea, etc), media tool (a game, a video clip, etc.)
and so on are shared among members of social networking sites. The company makes use

14

of the network/ the community of such sites to spread out information about the
company, its promotion campaign or for other commercial purposes.
Example: A note on facebook about the development of Shoes Century/the topic of a new
advertising campaign is written in the form of a fairytale with interesting characters and
appealing content. To be effective, it must be interesting enough to make people want to share
with others. The more people send around this note (via facebook, leaving links on Yahoo or
other communities), the better customer awareness about Shoes Century and its campaign.

E Consumer online buyer behavior

1. What do internet users want online? Explain 4 of them with example
Socialising: to communicate with people in the world. For example, make friend through
facebook.com.
15

 Product information: find and research information of product or knowledge. For

example, find information of electronic products on bestbuy.com
Purchasing: shop online by using internet. For example, buy book on Amazon.com.
Entertainment: for entertainment purposes. For example, watch video on youtube.com

2. Why do they shop online? Explain 4 of them with example

Convenient: they can save a lot of time by shopping online rather than physically go
shopping from store to store. It can also easily to fit with other activities for example, you
can shop online while you are babysitting your children at home.
Large variety of products: you can choose and find many different products such as
clothes with different stylists, colour, brands and prices that are suitable for everyone.
Cheaper prices: by shop online you can find variety products with cheaper prices than
shop offline. For example, bestbuy.com provides cheaper prices for customers buy
products on their website.
Easy comparison of prices: many website have same products with different prices so
by shopping online you can compare easily what is the best price for you. For example, I
want to buy electronic product but I do not know what better price is so I can enter in
different website such as bestbuy.com, epathchina.com or cholon.com to compare price.
Then I can choose what the best price for me.
Characteristics of online shoppers:

More willing to buy without handling goods

Like shopping hate crowds

Price conscious, seeking price advantage

Lifestyle need convenience and variety

More likely to be an impulsive buyer

3. Explain following web segmentation with example

Psychiatric
Realistic enthusiasts: characterized by an enthusiastic approach toward e-commerce but they
typically like to see the product in real life before making a purchase and they often consider that
finding the product to purchase is a difficult process. (e.g.:)
16

Confident brand shoppers: members of this group are happy to use the Internet for the next
time they want to make a purchase in excess of 500 with this confidence stemming from the
importance they lay on purchasing well known brands and the necessity to shop around.
Carefree shoppers: these consumers are prepared to purchase from unknown companies and do
not consider that purchase should be restricted to well known brands. Furthermore, they are
willing to make the purchase without seeing the product first.
Cautious shoppers: these shoppers are not likely to purchase goods through an online auction,
have concerns over the quality of products they purchase and would like to see the product prior
to making a purchase.
Bargain hunters: this group would buy from an unknown company or any web site as long as it
was the cheapest and is driven not by the convenience of the medium but by price.
Unfulfilled shoppers: this group finds it difficult to find the products they wish to purchase on
the Internet, they would not buy from any web site or through an auction and they think it takes
too long for products purchased online to be delivered.

Searching behavior
Directed information seekers: Will be looking for product, market or leisure information such
as details of their football clubs fixtures. This type of user tends to be experienced in using the
web and is proficient in using search engines and directories.
Undirected information seekers: These are the users usually referred to as surfers, who like to
browse and change sites by following hyperlinks. This group tends to be novice users (but not
exclusively so) and they may be more likely to click on banner advertisements. This behavior is
now less common.
Directed buyers: These buyers are online to purchase specific products. For such users, brokers
or cybermediaries who compare product features and prices will be important locations to visit.
Bargain Hunters: These users want to use the offers available from sales promotions such as
free samples or prizes.
Entertainment seekers: Users looking to interact with the web for enjoyment through entering
contests such as quizzes.
4. List and explain with an example the steps of the online buying process
1-Problem recognition
Importance of online/offline marketing integration: an organisation needs an integrated online
and offline marketing strategy to inform consumers who recognise that they have a problem
17

2-Information (supplier) search

Searching behaviours:

Directed (B2B)
Non-directed (surfers)

3-Evaluation
Communicate relevant benefits
Personalisation
Product selection
4-Decision
Mixed mode messages: reinforce the benefits
Incentives to capture contact details to reinforce benefits
5 - Purchase
Slick, user-centred design to make purchase easy
Security and privacy issues:
-

Reassure customers
Offer other channels

6 - Post-purchase support
Email confirmation and tracking to improve service
CRM

5. Explain channel integration for mixed-mode buying with example

Definition: Buying process where both online and offline channels can be used to
facilitate
the purchase of a product. (1 mark)

18

Mixed mode buying is the process by which customer changes between online and offline
channels during the buying process. It is a key aspect of devising online marketing
communications since the customer should be supported in changing from one channel to
another.
See figure 8.17 to explain:

For example, Dell has a prominent web-specific phone number on their website that encourages
customers to ring a representative in the call centre to place their order.

E-MARKETING
1. How can we distinguish between e-marketing, e-business and e-commerce? Provide
example to explain you answer.(p.10, 13, 43, 417&418)
19

E-commerce refers to financial and non-financial transactions between organizations. These

transactions are often considered in the context of a supplier organization distributing and selling
its product to consumers. For example,shoes.com
E-business includes transactions from a buy-side and sell-side e-commerce perspective and also
the use of communications technology to improve internal process efficiencies. For example,
eBay.com built feedback forum to help establish credentials of sellers and buyers and also help to
improve this website.
E-marketing: use of electronic communications technology to achieve marketing objectives and
has an external and an internal perspective. For example, HSBC Global www.hsbc.com has a
website to provide information about the bank, maintain relationship with customers and offer its
customers with online banking services.
E-commerce is generally understood to be a sub-set of e-business and E-marketing is also a
subset of e-business.
E-commerce involves buy-side or sell-side transaction whereas e-marketing concentrates on sellside transaction and communication. Therefore, e-commerce is perhaps broader then e-marketing

2. Write briefly with example how you can perform following activities for an organization?
(p.421-426)
a. Demand analysis: assessment of the demand for e-commerce services amongst existing and
potential customer segments. It examines current and projected customer use of each digital
channel and different services within different target markets.
For example, savvy e-marketers use tools provided by search engine services such as Google to
evaluate the demand for their products or services based on the volume of different search terms
typed in by search engine users. Then, they can calculate the total potential opportunity and the
current share of search terms for a company.
b. Competition analysis: Review of e-business services offered by existing and new competitors
and adoption by their customers.

3. What is the difference between ORC and OVP? Explain with example. Provide at least one
different with one example for each difference. (p.290,304 and 442).
20

ORC
An assessment of the direct or indirect
contribution of the internet to sales, usually
expressed as a percentage of overall sales
revenues.

OVP
A statement of the benefits of online services
reinforces the core proposition and
differentiates from an organizations offline
offering and those of competitors.

Ex: transfer potential customer from offline

to online: increase online selling 70% and
reduce offline selling 30% after 4 years
operate.

Ex: Citibank UK has OVP for its Internet

banking service is bank whenever you want,
form wherever you are. Give you freedom
and flexibility to manage your day-to-day
finance. Its secure, convenient and very easy
to use.

1.

Consider Online Revenue Contribution (ORC).

a. Explain the difference between direct ORC and indirect ORC using an example (2
marks).
b. Would a business want to increase its ORC over time? Briefly explain (1 mark).

Direct ORC is revenue earned selling directly online using a transactional website.
Indirect ORC is revenue earned selling offline from a lead started through an online channel.

E.g. If I purchase a book online from Amazon using my credit card, this is considered part of Direct
ORC, however if I didnt have a CC and/or Amazon has a bricks and mortar store, I could visit
Amazons site and then go to their store to buy directly this is indirect ORC, since it started as an
online channel.

A business would want to increase ORC over time (1/2). Apart from the fact that increasing
revenue is the aim of business, an online business is cheaper and more efficient to run compared to
offline to therefore a business would want to move offline revenue to online revenue this is one of
the goals of retention in the 3 phases of CRM. (1/2 mark for reasonable argument)

4. Provide difference between traditional media communication and new media

communication with respect to following?(p.443-448)
a. interactivity:
21

Traditional media communication has one way communication by using push technique from
company to customer. This leads to limited interaction with customer.
New media communication encourages two way communications through push and pulls
technique between company and customer.
For example, Nestl use the website (Nescafe.co.uk) as a method of generating interaction by
providing competitions and sales promotions to encourage the customer to respond with their
names, addresses and profile information such as age and sex.

b. intelligence (profiling customers):

Traditional media communication: long time takes to reply to consumer service emails and
cannot create two way feedbacks.
New media communication: provide low cost method of collecting marketing research. It can
create two way feedback with does not usually occur in other media. Less time takes to collect
customers reply. A wealth of marketing research information is also available from its the
website itself and can be described through the web analytics tools.
For example, HSBC (www.hsbc.co.uk) use a service from Omniture Test and Target
(www.omniture.com) to serve messages according to an evaluation of which offers they are most
likely to respond to.
c. individualization:
Tradition media: the same message tends to be broadcast to everyone
New media: they can be tailored to individual. The process of tailoring is also referred to as
personalization and it is an important aspect of achieving customer relationship management
online.
For example, Dell (www.dell.com/premier) set up Dell Premier for key accounts such as the
Abbey where special offers and bespoke customer support are delivered.
d. integration:
Tradition media: not provide further scope for integrated marketing communications
New media: provide further scope for integrated marketing communications. Two perspectives
when assessing the success of a website: organization- to- customer and customer- toorganization.
e. industry restructure (disintermediation): no information
22

f. independence of location (new markets)

New media: increasing the reach of company communications to the global market. This gives
opportunity to sell into international markets that may not have been previously accessible. Also,
it is possible to sell to a country without local sales or customers service force.

5. What does SOSTAC stand for? Briefly explain.(p.418-419)

Situation: where are we now?
Objectives: where do we want to be?
Strategy: how do get there?
Tactics: how exactly do we get there?
Actions: the details of tactics, who does what and when
Control: how do we monitor performance?

Supply Chain Management

1. Define E-SCM and explain four benefits of E-SCM with example
E-SCM: The coordination of all supply activities of an organization from its suppliers
and partners to its customers
23

Benefits of E-SCM:
Increased efficiency of individual processes
Reduced complexity of the supply chain
Improved data integration between elements of the supply chain
Reduced cost through outsourcing
Innovation

2.

o
o

Differentiate between push and pull SC with respect to virtual and vertical integration
Push Model
That emphasizes distribution of a product to passive customers.
The push model is illustrated by a manufacturer who perhaps develops an innovative
product and identified a suitable target market. A distribution channel is then created to
push the product to the market.
o The typical motivation for a push approach is to optimize the production process for cost
and effective.

Pull Model
o An emphasis on using the supply chain to deliver value to consumers who actively involved
in product and service specification.
o It focuses on the customer needs and starts with analysis of their requirements through
market research and close cooperation with customers and suppliers in new product
development. The supply chain is constructed to deliver value to the customer by reducing
costs and increasing service quality.
o The typical motivation for the pull approach is to optimize the production process for
customer response, cost and efficiency.
o Modern car manufacturers now not only provide a choice of color but thousands of
permutation of trim and accessories backed up by three year warranty.

24

Figure 6.3 Push and pull approaches to supply chain management

3. What is value chain? Compare the traditional and revised value chain
It is a model that considers how supply chain activities can add value to products and
services delivered to the customer.
Traditional value chain distinguishes between primary activities that contribute directly to
getting goods and services to the consumer (including procurement, manufacturing,
marketing and delivery to buyers and support and service after sale). Support activities
provide inputs and infrastructure that allow the primary activities to take place (including
human resource, finance and information system)
Electronic communication can be used to enhance the value chain by making value chain
activities such as procurement more efficient. For example, if a retailer share information
electronically with a suppliers about demand for its products, this can enhance the value
chain for both parties since the cycle time for ordering can be reduced, resulting in lower
inventory holding and hence lower cost for both.

25

Figure 6.4 Two alternative models of the value chain: (a) traditional value chain model (b)
revised (virtual) value chain model (HR, Finance & IS no longer just support: now critical)

4. List, discuss and apply interpret the benefits of IS for a business SCM
Increased efficiency of individual process: the cycle time to complete a process and
recourses needs to execute it are reduced. Benefit: reduce cycle time and cost per order
Reduced complexity of the supply chain: this is the process of disintermediation. The
company will offer the facility to sell direct for its e-commerce site rather than through
distributors or retailers. It leads to reducing cost of distribution and sale.
Improved data integration b/w elements of the supply chain: sharing information b/w
parties may result in reducing cost of paper processing
Reducing cost through outsourcing: the company can outsource or use virtual integration
to transfer assets and costs such as inventory holding costs to the third parties. Benefits lower
costs through price competition and reduced spend on manufacturing capacity and holding
capacity. Better service quality through contractual arrangements.
Innovation: E-SCM should make it possible to be more flexible in delivering a more diverse
range of products and to reduce time to market. For example, the B2B Company may use ecommerce to enable its customers to specify the mixture of chemical compounds and
additives used to formulate their plastics and refer to a history of pervious formulations.
Benefit better customer responsiveness.
An alternative perspective on the benefits of E-SCM:
o Increased convenience through 24 hours a day, 7days per week, 365days a year ordering
26

o
o
o
o

Increased choice of supplier leading to lower cost

Faster lead times and lower costs through reduced inventory holding
The facility to tailor products more readily
Increased information about products and transactions such as technical data sheets and order
histories
5. Explain with example four different SCM partnership models
Partnering arrangement
Total ownership (more than
51% equity in company)

Technical infrastructure
integration
Technical issues in merging
company systems

Investment stake (less than

49% equity)

Technical issues in merging

company systems

Strategic alliance

Collaboration tools and

groupware for new product
development
As above

Profit sharing partnership

Long-term contract

Preferred suppliers

Competitive tendering
Short term contracts
Spot markets and auctions

See above. Tools for

managing service level
agreements important
Permanent EDI or Internet
EDI links set up with
preferred partners
Tenders issued at intermediary
or buyers website
As above
Auctions at intermediary or
buyers web site

Examples
Purchases of Booker
(distribution company) by
Iceland (retailer). Since 1993
Cisco has made over 30
acquisition (not all SCMrelated)
Cisco has also made over 40
investments in hardware and
software suppliers
Cable and wireless, Compaq
and Microsoft new e-business
solution called a-Services
Arrangement sometimes used
for IS outsourcing
ISPs have performance and
availability SLAs with penalty
clauses
Tesco Information Exchange
(case study 6.2)
Buyer-arranged auctions (see
chapter 2 )
As above
B2B marketplaces (e.g.
www.freemarket.com)

27

E-Procurement
1. Define E-Procurement and explain four drivers of E-commerce with example:
- The electronic integration and management of all procurement activities including
purchase request, authorization, ordering, delivery and payment between a purchaser and
a supplier
- Four drivers:
The primary driver is cost reduction. In many cases the cost of ordering exceeds
the value of the product purchased
Greater profitability
Process efficiencies
The cycle time between order and use of suppliers can be reduced, greater
flexibility in ordering goods from different suppliers according to best value.
2. Identify and list key procurement activities in an organization:

28

3. Differentiate between traditional Procurement and e-Procurement:

Process
Efficiency: faster
Elimination of errors
Purchaser focuses on strategic issues
Better IM
Access to suppliers
Spending recorded
Better payment process (sometimes)
Costs
Lower prices
Product standardization
Consolidation
Budgetary control
Limit spending
Better reporting
4. Identify and list 3 risks and 3 impacts of e-Procurement:
- Organizational risks: resistance (loss of jobs), empowerment -> maverick purchasers (offcontract/expensive items)
- Failure to achieve real cost reductions: the return on investment from introducing eprocurement may be lower than that forecast and the introduction of the e-procurement
system may not pay for itself
- Technology risks: integration with existing financial systems and range of marketplaces
5.
-

List, discuss and apply interpret the benefits of IS for a businesss e-Procurement:
Reduced purchasing cycle time and cost
Enhanced budgetary control
Elimination of administrative errors
Increasing buyers productivity
Lowering prices through product standardization and consolidation of buys
Improving information management
Improving the payment process

29

Web 2.0 and Emerging Technology

1. What is web 2.0? Mention the main aspects of Web 2.0 with example
- Web 2.0 is a collection of web services which facilitate certain behaviors online such as
community participation and user-generated content, rating and tagging
- Main aspect:
Founded on user-generated content and collaboration
These applications link like-minded people and enable social networks or online
communities to form.
Importantly, web 2.0 applications enable users to generate content individually or
collaboratively, and develop large content databases that are both useful and
interesting.
2. Discuss the three benefits to implement Web 2.0 into a business
The company can have a better way to marketing by using online communities such as Facebook
(an example of Web 2.0). People can discuss about their need, their feedback about the company
product; so the company can improve to be better. Furthermore, if the products are good, many
people will tell others people in the social network to increase the companys popularity. That is
called viral marketing
- By implement web 2.0, the company can create a better application to allow employees
communicate better and efficiency, especially in team work because web 2.0 allow every people
to share information with other users. For example Google Docs, that allow user to share the
document with others users, they even can edit the document and save the document. It is very
good in team work.

30