E-commerce Final Exam

Industry Consortium

Industry-owned vertical marketplaces that serve specific industries. Description: Industry-owned vertical digital market open to select suppliers. Revenue Model: Fees and commissions on transactions

Reinvention Phase of E-Commerce (2007-Present)

Social, mobile, local. Entertainment content begins to develop as a major source of e-commerce revenue. On the go shopping devices, social network, word of mouth and viral marketing.

The existence of a large number of competitors in any one market segment may indicate:

The Market is saturated

Disintermediation

The displacement of market middlemen - distributers or wholesalers (each demanding payment but adding little value) - who traditionally are intermediaries between producers and consumers by a new direct relationship between producers and consumers

Personalization

The targeting of marketing messages to specific individuals by adjusting the message to a person's name, interests, and past purchases.

A perfect market is one in which:

There are no competitive advantages or asymmetries because all firms have equal access to all the factors to production.

The basic value proposition of community providers is:

They offer a fast, convenient one-stop site where users can focus on their most important concerns and interests.

In a(n) ________ business model, Web-based businesses build a digital environment in which buyers and sellers can meet, display products, search for products, and establish prices.

market creator(s)

Which of the following features of e-commerce technology changes industry structure by weakening powerful sales channels, shifting bargaining power to consumers?

Information Density

Which group of companies has profited most, as a whole, from the development of e-commerce?

Internet Infrastructure Companies

What was the Internet prior to the Web primarily used for?

Mainly used for text communications, file transfers, and remote computing.

Vertical marketplaces, horizontal marketplaces

Vertical serves specific industries, such as automotive or aerospace Horizontal sell specific products and services to a wide range of companies

The most significant technology that can reduce barriers to Internet access is:

Wireless Web Technology

Which business improvement is associated with the technological development of local area networks and client/server computing?

Workgroup automation. For example, document sharing

Internet

Worldwide network of computer networks built on common standards

Subscription Revenue Model

a Web site that offers users content or services charges a fee for access to some or all of its offerings.

Business Model

a set of planned activities designed to result in a profit in marketplace.

During the early years of e-commerce, e-commerce was

a technological success and a mixed business success.

Which of the following is a characteristic of the re-invention phase of e-commerce?

proliferation of small online intermediaries reinventing the business processes of larger firms

Mobile Platform

provides the ability to access the internet from a variety of highly mobile devices such as smart phones, tablets, and other ultra-lightweight laptop computers.

Differentiation

refers to all the ways producers can make their products or services unique and different to distinguish them from their competitors.

Monster.com is an example of a:

transaction broker

The financial services, travel services, and job placement services industries use the ________ business model.

transaction broker

Which type of e-commerce is distinguished by the type of technology used in the transaction rather than by the nature of the market relationship?

(P2P)Peer to Peer

Types of E-Commerce

1. B2C (Business to Consumer) - online business attempt to reach a consumer. Example, Amazon 2. B2B (Business to Business) - businesses focus on selling to other businesses - largest form of e-commerce. Example, Go2Paper 3. C2C (Consumer to Consumer) - Consumers sell to other consumers examples, EBay, Etsy, Craigslist 4. Mobile E-commerce (M-commerce) refers to the use of mobile devices to enable online transactions 5. Social E-commerce - e-commerce that is enabled by social networks and online social relationships. Examples, Facebook, Instagram. 6. Local E-commerce - focused on engaging the consumer based on his or her current geographic location. Example, Groupon

List and briefly explain the five main types of e-commerce. For the most part, what is the metric upon which the types of e-commerce are distinguished?

1. Business-to-Consumer (B2C) in online businesses reach consumers; 2. Business-to-Business (B2B), in which businesses sell to other businesses; 3. Consumer to Consumer (C2C), consumers can sell goods to each other; 4. Peer-to-Peer (P2P), use of file sharing technology, eliminating a Web server; and 5. Mobile commerce or m-commerce the use of wireless digital devices to enable Web transactions. The metric upon which each of these types of e-commerce is distinguished is the nature of the market relationship--who is selling to whom, except m-commerce, which is defined by the method of transacting.

What do web 2.0 applications have in common?

1. They rely on user and consumer generated content. 2. Easy search capability 3. They are inherently highly interactive 4. Rely on broadband connectivity 5. Many are only marginally profitable 6. Attract extremely large audiences

8 unique features of E-Commerce Technology

1. Ubiquity (available everywhere) 2. Global Reach 3. Universal Standards 4. Richness (video, audio, and text marketing messages integrated into a single marketing message and consuming experience) 5. Interactivity (technology works through interaction with the user) 6. Information Density (reduces information costs and increases quality) 7. Personalization/Customization (Technology allows personalized messages to be delivered to individuals and groups) 8. Social Technology (user content generation and social networks)

e-distributer

A company that supplies products and services directly to individual businesses. Description: Single-firm online version of retail and wholesale store; supply maintenance, repair, operation goods; indirect inputs. Revenue Model: Sales of goods

First Mover

A firm that is first to market in a particular area and that moves quickly to gather market share

Value Chain

A set of activities performed in an industry or in a firm that transforms raw inputs into final products and services

Web 2.0 Application

A set of applications and technologies tha allows users to create, edit, and distribute content; share preferences, bookmarks, and online personas; participate in virtual lives and busily online communities (examples, Twitter, Youtube, Instagram, Wikipedia, Tumblr, Uber)

Commoditization

A situation where there are no differences among products or services, and the only basis of choosing is price.

Friction-Free Commerce

A vision of Commerce in which information is equally distributed, transaction costs are low, prices can be dynamically adjusted to reflect actual demand, intermediaries decline and unfair competitive advantages are eliminated

The early years of e-commerce were driven by all of the following factors except: A) an emphasis on exploiting traditional distribution channels. B) a huge infusion of venture capital funds. C) an emphasis on quickly achieving a very high market visibility. D) visions of profiting from new technology.

A. An emphasis on exploiting traditional distribution channels.

Which of the following statements about the Web is not true? A) It is the technology upon which the Internet is based. B) It was developed in the early 1990s. C) It provides access to pages written in HTML. D) It provides access to Web pages that incorporate graphics, sound, and multimedia.

A. It is the technology upon which the Internet is based.

All of the following can be considered a precursor to e-commerce except: A) m-commerce. B) Baxter Healthcare's remote order entry system. C) The French Minitel. D) Electronic Data Interchange.

A. M-commerce (because mobile commerce came after e-commerce)

Above all, e-commerce is a(n) ________-driven phenomenon. A) technology B) government C) marketing D) user

A. Technology

Exchange

An independent digital marketplace where suppliers and commercial purchasers can conduct transactions. Description: Independently owned vertical digital marketplace for direct inputs Revenue Model: Fees and commissions on transactions

A(n) ________ provider is a company that offers access to Internet-based software applications to other companies.

Application Service

Which of the following statements is not true? A) No one academic perspective dominates research about e-commerce. B) Information systems researchers take a purely technical approach to e-commerce. C) There are two primary approaches to e-commerce: behavioral and technical. D) Management scientists are interested in e-commerce as an opportunity to study how business firms can exploit the Internet to achieve more efficient business operations.

B. Information Sustems researchers take a purely technical approach to e-commerce.

Which of the following is not an example of a Web 2.0 application? A) YouTube B) Yahoo C) Second Life D) Wikipedia

B. Yahoo

Net marketplaces include all of the following except: A) e-distributors. B) exchanges. C) industry consortia. D) private industrial networks.

D. Private industrial networks

A ________ business model provides a way for consumers to sell to each other with the help of an online business. A) B2B B) B2C C) C2C D) P2P

C. C2C

Which of the following is not a variation of the e-tailer business model? A) bricks-and-clicks B) virtual merchant C) market creator D) manufacturer-direct

C. Market Creator

Which of the following statements is not true? A) Information asymmetries are continually being introduced by merchants and marketers. B) Intermediaries have not disappeared. C) Overall transaction costs have dropped dramatically. D) Brands remain very important in e-commerce.

C. Overall transaction costs have dropped dramatically

Horizontal or general portals primarily generate revenue in all of the following ways except: A) charging advertisers for ad placement. B) collecting transaction fees. C) sales of goods. D) charging subscription fees.

C. Sales of goods

Which of the following is not a true statement about the online brokerage market? A) First movers initially dominated the market. B) Significant consolidation is now occurring in the industry. C) Traditional brokerages have been unable to mount an effective challenge to the pure online brokerages. D) Online stockbrokers charge commissions that are considerably less than traditional brokers.

C. Traditional brokerages have been unable to mount an effective challenge to the pure online brokerages.

All of the following were visions of e-commerce expressed during the early years of e-commerce except: A) a nearly perfect competitive market. B) friction-free commerce. C) persistence of information asymmetries. D) first mover advantage.

C. persistence of information asymmetries.

Which of the following factors is not a significant influence on a company's competitive environment? A) how many competitors are active B) what the market share of each competitor is C) the availability of supportive organizational structures D) how competitors price their products

C. the availability of supportive organizational structures

The key technologies for m-commerce are:

Cell phone-based 3G, Wi-Fi and Bluetooth

Transaction costs

Cost of participating in markets

E-Procurment

Creates and sells access to digital markets. Description: Single firm creating digital markets where sellers and buyers transact for indirect inputs Revenue Model: Fees for market-making services, supply chain management, and fulfillment services.

Which of the following is not a characteristic of a perfect competitive market? A) price, cost, and quality information are equally distributed. B) a nearly infinite set of suppliers compete against one another. C) customers have access to all relevant information worldwide. D) the growth of regulatory activity both nationally and internationally.

D) the growth of regulatory activity both nationally and internationally.

Which of the following is not a limitation on the growth of B2C e-commerce? A) the sophisticated skill set required to use the Internet and e-commerce systems B) the persistent global inequality limiting access to telephone service, PCs, and cell phones C) saturation and ceiling effects D) the retrenchment and consolidation of e-commerce into the hands of large established firms

D) the retrenchment and consolidation of e-commerce into the hands of large established firms

All of the following are examples of Business-to-Business (B2B) business model except: A) e-distributors. B) e-procurement. C) private industrial networks. D) market creators.

D. Market Creators

Which of the following is not true regarding e-commerce today? A) Economists' visions of a friction-free market have not been realized. B) Consumers are less price-sensitive than expected. C) There remains considerable persistent price dispersion. D) The market middlemen disappeared.

D. The market middlemen disappeared.

Internet Host

Defined as any IP address that returns a domain name in the in-addr.arpa domain.

Consolidation Phase of E-Commerce (2001-2006)

E-Commerce changed to include not just retail products, but also more complex services, such as travel and financial services. Enabled by Broadband and growing power of pcs

One of the predictions for the future of e-commerce is that:

E-commerce is expectec to grow 10-12 percent/year from 2010-2013 (Isn't it 2015?)

Marketspace

Extends the marketplace beyond traditional boundaries.

Which of the following features of e-commerce technology changes industry structure by lowering barriers to entry, but greatly expands the market at the same time?

Global Reach

HTML

HyperText Markup Language

Which of the following is one of the three primary societal issues related to e-commerce?

Individual Privacy

B2B Business Models, Private Industrial Networks

Industry Value Chains Firm Value Chains Firm Value Webs

What is cannibalisation?

Market cannibalization refers to a situation where a new product "eats" up the sales and demand of an existing product. This can negatively affect both the sales volume and market share of the existing product. Market cannibalization occurs when a new product intrudes on the existing market for the older product, rather than expanding the company's market base. Rather than appealing to a new segment of the market and increasing market share, the new product appeals to the company's current market, resulting in reduced sales and market share for the existing product. Market cannibalization can have a negative effect on a company's bottom line, forcing an existing product's life to end prematurely because sales shifted to the new product, rather than tapping into a new market as intended.

Which of the following is the top-selling online retail category?

Mass Merchant/Dept store

B2B Business Models, Net Marketplaces

Net marketplaces: E-distributor (AmazonSupply) E-procurement (Ariba Supplier) Exchange (Go2Paper) Industry consortium (TheSeam, SupplyOn)

Network Effect

Occurs where users receive value from the fact that everyone else uses the same product or tool. (Examples: a common operating system, telephone system) All of which increase in value as more people adopt them.

Unfair Competitive Advantage Occurs When

One competitor has an advantage others cannot purchase

World Wide Web

One of the most popular services the runs on the infrastructure of the Internet. It provides access to billions of webpages indexed by Google and other search engines. The pages are created in HTML (language)

In general, the key to becoming a successful content provider is to:

Own the content being provided

Information Asymmetry

Refers to any disparity in relevant market information among parties in a transaction.

Which of the following types of merchants has the highest share of retail online sales?

Retail Chain

What is the primary revenue model for an e-distributor?

Sales

One of the competitive advantages of a B2B service provider is that it can spread the cost of an expensive software system over many users, achieving efficiencies referred to as:

Scale Economies

Which of the following is a characteristic of the consolidation phase of e-commerce?

Strengthening of Intermediaries

The business model of e-tailers is quite similar to that of:

e-distributors

If you wished to leverage the ubiquitous nature of the Web to differentiate your product, you would:

enable individual customization of the product by consumers.

E-tailing

involves b2b and b2c. Sales of goods and services through the internet. e-tailing revenue can come from the sales of goods and services through subscriptions to website content or through advertising.

World Wide Web Consortium (W3C)

is a largely academic group that sets HTML and other programming standards.

Portal Business Model

offers users content as well as Web search tools in order to act as a destination site.