Feb/Spring 2012

Master of Business Administration - MBA Semester IV MI0039 – eCommerce - 4 Credits Assignment - Set- 1 (60 Marks) Note: Each question carries 10 Marks. Answer all the questions.

Q.1. Explain the framework of e-Commerce in detail.

Answer:-

Electronic Commerce Framework

A framework can be defined as a structure for supporting or attaching something else,

particularly a support that is used as the foundation for something being created. Hence, an e-

commerce framework comprises the set of infrastructure required for carrying out the e-

commerce business. This set of infrastructure typically includes the network requirements and

the different software applications that are for e-commerce.

The e-commerce vision summarised above assumes a series of essential infrastructure services

and values steady with a broad architectural framework. This framework must allow flexibility,

interoperability and directness necessary for the successful development of electronic commerce.

The e-commerce framework offers a set of options to the customers. Most of the electronic

commerce plans have different strategies for security and privacy, their skill to deal with the

payments, and their usability to different transactions. They also vary in their business models.

Such variations promote innovation and allows for supplier and customer options. But yet, you

need a broad framework to gain wide acceptance. This includes the following requirements and

peculiarities of carrying out various business forms in this upcoming electronic environment.

Interoperability: Electronic commerce is based on a common set of required services and

standards that allow interoperability. Service providers and application designers use these

services and standards as building blocks. They achieve the goals and objectives of e-commerce

by combining, enhancing and customising these building blocks as per the requirements.

Maximum flexibility for innovation: The innovation in e-commerce will grow and be

established in ways that are impossible to visualise. This will result in evolution of new services

and businesses. We can already see that many electronic marketplaces are giving rise to new

openings for new services and businesses. Existing services and products will be specified and

adapted. Hence, the electronic commerce framework plays a vital part in adapting the changes

and then later dealing with the new applications.

Information-intensive products: It is observed that the most important set of products that are

sold through e-commerce are the pure information products. For example: electronic journals,

catalogues, videos, interactive video games, software programs, electronic coupons, and so on.

They also include electronic keys to cars, hotel rooms, storage sections, and airport boarding

gates. Some of these products can be designed or modified by a customer. For example,

customers want their own selection of articles to be attached in an electronic book, or modify

their own clothing designs. This capability calls for a customer-driven activity – a design phase,

to the purchase cycle. Hence, it is necessary to have all the activities in the process of the

transaction – designing, customising, ordering, billing, payment and distribution tightly

integrated and happening simultaneously.

New revenue collecting techniques: We already know about the traditional techniques of

revenue collection, for example, payment upon receipt, advance payment, and so on. At present,

electronic commerce supports more improved methods of revenue collection. For example, an

information product service provider will allocate the product broadly and then charge on a

usage basis — which means charging the customer only when the information is used. This

information can be a software program, a digital record, or an electronic key used to open and

start a rental car.

Meterware is a new strategy implemented in recording and billing customers constantly

depending on their product usage. Along with Meterware, electronic cash and cheques also help

in gaining new customers and sharing products.

Legacy systems: The legacy systems that are prevailing in electronic commerce field include

mainframe-based agreement, paper cheques, and payment systems, and so on. An electronic

commerce infrastructure gains success only when it allows the user to easily shift from

traditional systems to innovative, electronic systems, and applications and processes.

Transaction devices: e-Commerce dealings include different kinds of legacy and recently

formed devices, media, and systems over which transactions take place. Hence, it is necessary

that e-commerce adapts the technologies and devices required for reaching and maintaining the

mass market.

We can conclude that an electronic commerce framework developed with all of these needs and

considerations in mind will form a strong basis for an extremely useful and effective electronic

commerce infrastructure.

Selecting the best e-commerce framework

Deciding on the best e-commerce framework is one of the major challenges for any organisation.

The framework should be selected based on the three evaluation points:

· Features.

· Requirements.

· Luxuries.

Figure 1.1 explains the three evaluation points of e-commerce framework.

Figure 1.1: Three Evaluation Points of e-Commerce Framework

Features are those elements of the framework that make it more prominent and clear from other

offerings.

Requirements are the basic requirements of the framework that allow it to do its work. If one

among these is lost, then it becomes difficult to use a particular framework, even with the

presence of any other features.

Luxuries are the components whose presence is not so important, but they are required to make

the case for a framework that comes at a bonus price. The luxury components add something

extra to the system to make it worthy of the premium price. The three important factors to look

for in any 

e-commerce framework are:

· Template management.

· Core framework functionality.

· Search engine features.

The framework should be adaptable in order to be able to cope with future evolution of the site

and market. At the same time, it should be able to support the existing business and make it as

easy as possible.

You cannot create content that will be suitable for submission to search engines, unless you

achieve good integration with search engine optimisation functions. Failing to do so will lead to

your site creator spending considerable time preparing submission pages instead of making use

of that valuable time for extending the site.

So long as you can balance between the cost and the benefits, it is worth paying the extra amount

to have a framework that saves you from all that work involved in maintaining the infrastructure

and processing payments. The end result is profitability, as expensive manual work is removed

from the process.

Electronic commerce and media convergence

By now you must be familiar with the e-commerce framework. Let us now discuss the role of

media convergence in e-commerce.

Media Convergence[3] is a process of interlinking of computing and information technology

organisations, telecommunication networks, and content providers from various media. These

media include journals, newspapers, music, television, radio, and entertainment software. Media

convergence conveys jointly the “three Cs” and they are computing, communications, and

content.

Convergence happens at two major levels:

1. Technologies: Creative content is transformed into industry-related digital forms for delivery.

This is done via broadband or wireless networks to exhibit on various computer or computer-

related devices and also on cellular telephones to personal digital assistants (PDAs) to digital

video recorders (DVRs).

2. Industries: Companies that are spread all over the business spectrum starting from media to

telecommunications to technology, combine or create strategic agreements. The purpose of these

alliances is to expand new business models that can yield profit from the emerging customer

expectations of availability of content.

We all are aware that there is a rapid growth with respect to usage of electronic applications and

the internet and people, all over the world, have entered the digital age because of technological

development. Most of the media-related organisations are experimenting with new openings and

concerns – afforded by what is termed as "convergence". The act of combining together of

different media and integrating new personalised services is both inspiring and overpowering.

The implementation of high-quality computers, changing to digital platforms, and formation of

high-speed computer networks has helped us with new ways of doing things. The old

explanations that provided division between TV, Radio, Cable, Newspapers, and Films are gone

forever. During 1990’s, there was evolution of ownership convergence which resulted in creation

of media-based multinational companies. For example, Disney, Viacom, Sony, and so on. From

the customer’s perspective, the Internet has also changed our favourite delivery systems, which

include newspapers that provide video and TV that offer interactive conversations, and radio that

offers web-cams.

Media convergence has a major part to play in the field of e-commerce and information

technology. Media convergence is particularly a blending of television, personal computer, and

telecommunications. This helps in providing a high-speed Internet access, traditional television

programs and interactive services in a single box. The convergence at a technological level will

facilitate audio, video, and data to be conveyed to customers using a single pipeline. This

pipeline may be in the form of wire which could be cable or DSL, or may be wireless. This will

help the customers to not only access the Internet from a single box, but also access high-speed

networks through various access points including TVs, PCs, mobile phones and other mobile

devices, public booth, and home appliances.

Q.2. List the advantages and disadvantages of e-Commerce.

Answer:-

Advantages

With the Internet acting as an emerging technology, e-commerce is the most important aspect

that has gained more prominence in the recent times. Electronic commerce involves execution of

business via the Internet with the help of computers that are connected to each other as a

network. In simple words, e-commerce is a process of purchasing and selling of products and

services and funds transfer via digital interactions.

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Q.3. Prepare a scenario on the organization having shopping cart facility showing the

advantages and disadvantages of having shopping cart facility.

Answer:-

Commerce software

The best example for e-commerce software is shopping cart software. Shopping cart acts as a

major factor that helps in distinguishing online and offline shopping. A shopping cart is the

major essential component for online shopping.

Q.4. Give examples for different models of ecommerce and explain what is the benefit of

that model in your example.

Answer: -

Business Models

Let us now discuss the various business models that have emerged since the birth of e-

commerce.

Q.5. Write short notes on

a. False and malicious sites

b. Stealing visitor’s credit card information

c. Stealing customer’s data from selling agent and internet service providers

d. The use of cookies

Answer:-

a) False or malicious web sites

The basic idea behind building the false or malicious web sites are for stealing visitors’ IDs and

passwords, stealing credit card information, spying on a visitor’s hard drive, uploading files from

Q.6. Describe the risk management paradigm in brief.

Answer:-

Risk Management Paradigm

In the previous section, we discussed about the disaster recovery plan. In this section, let us

discuss about the risk management paradigm.

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Master of Business Administration - MBA Semester IV

MI0039 – eCommerce - 4 Credits

Assignment - Set- 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q.1 Warigon is a retail company and they want to automate the payment system. Assume that

you are the design engineer of that company. What are the factors that you would consider while

designing the electronic payment system?

The following factors like non technical in nature, that must be consider while designing the

electronic payment system for the retail company to automate the payment system: 

Privacy. A user expects to trust in a secure system; just as the telephone is a safe and private

medium free of wiretaps and hackers, electronic communication must merit equal trust.

 

• Security. A secure system verifies the identity of two-party transactions through “user

authentication” and reserves flexibility to restrict information/services through access control.

Tomorrow’s bank robbers will need no getaway cars-just a computer terminal, the price of a

telephone call, and a little ingenuity. Millions of dollars have been embezzled by computer fraud.

No systems are yet fool-proof, although designers are concentrating closely on security.

 

• Intuitive interfaces. The payment interface must be as easy to use as a telephone. Generally

speaking, users value convenience more than anything.

 

• Database integration. With home banking, for example, a customer wants to play with all his

accounts. To date, separate accounts have been stored on separate databases. The challenge

before banks is to tie these databases together and to allow customers access to any of them

while keeping the data up-to-date and error free.

 

• Brokers. A “network banker” -someone to broker goods and services, settle conflicts, and

facilitate financial transactions electronically-must be in place.

 

• Pricing. One fundamental issue is how to price payment system service. For example, should

subsidies be used to encourage users to shift from one form of payment to another, from cash to

bank payments, from paper: based to e-cash. The problem with subsidies is the potential waste of

resources, as money may be· invested in systems that will not be used. Thus investment in

systems not only might not be recovered but substantial ongoing operational subsidies will also

be necessary. On the other hand, it must be recognized that without subsidies, it is difficult to

price all services affordably .

 

• Standards. Without standards, the welding of different payment users in different networks and

different systems is impossible. Standards en at interoperability, giving users the ability to buy

and receive information, regardless of which bank is managing their money. None of these

hurdles are insurmountable. Most will be jumped within t next few years. These technical

problems, experts hope, will be solved as technology is improved and experience is gained. The

biggest question concern how customers will take to a paperless world.

 

the e? yw ?[ ?U mesh of interconnected data highways of many forms: telephone wires, cable

TV wires, radio-based wireless-cellular and satellite.

 

Far from complete, the I-way is quickly acquiring new on-ramps and even small highway

systems. The numerous constructors are either in competition with or in alliance with one

another, all in an effort to convince traffic to use their on-ramps or sections of the highway

because, like toll ways, revenues in e-commerce are based on vehicular traffic, in our case,

vehicles transporting information or multimedia content. The myriad transactions among

businesses means that the ultimate winner must select the technology for the I-way that best

matches future business needs by using today’s tools. Building an access road to a ghost town or

a highway too narrow to handle the traffic will yield equally little return on investment for those

who have been less successful at matching needs with the infrastructure.

 

Building the various highways is not enough. Transport vehicles are needed, routing issues must

be addressed, and of course, the transportation costs must be paid. On the I-way, the nature of-

vehicular traffic is extremely important. The information and multimedia content determines

what type of vehicle is needed. A breakdown of potential everyday e-commerce vehicles into

their technological components shows that they vary widely in complexity and may even need to

travel different routes on the I-way, much the way an eighteen-wheeler may be restricted from

traveling roads that cannot accommodate it:

 

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Movies = video + audio

 

Digital games = music + video + software

 

Electronic books = text + data + graphics + music + photographs + video.

 

Final pillar on which the e-commerce framework rests is technical standards without which the

impact of this revolution would be minimized. For e.g., returning to our analogy with traditional

transportation systems, railroad would not have flourished had each state established a separate

track standard (meter gauge versus broad gauge, for example) and goods would have to be

constantly moved from one train to another every time the standard changed, as they do today at

the border between Russia and Western Europe. Similar differences in standards exist today in

electricity distribution (110 versus 200 volts) and video distribution(Sony Beta versus VHS),

limiting worldwide use of many products.

 

Standards are crucial in the world of global e-commerce, to ensure not only seamless and

harmonious integration across the transportation network but access of information on any type

of device the consumer chooses-laser disc, PCs, portable hand-held devices or television + set-

top boxes (cable converter boxes) and on all types of operating systems. For example, without

the adoption of video standards, video conferencing will never become widespread, as

each manufacturer will attempt to develop equipment that maximizes their short-term profits

rather than working toward customer goals such as interoperability. While we have strived to

limit our initial discussion of the elements of a framework for electronic commerce to an

understanding of what part they play within this complex network, it is no accident that we have

ended with a convergence of technical, policy, and business concerns. The concept of

“convergence” is essential to the operation of the Information Superhighway and to the way the

business world is gearing up to deal with it. It is only fitting that we preface our discussion of the

one element of our framework we have not yet discussed in detail-e-commerce application them

selves with a clarification of the concept of convergence.

Q.2 Discuss the working concepts of EDI

Answer: Working concepts of EDI discuss the step by step process:

1. Preparation of electronic documents: The first step in any sequence of Electronic Data

Interchange is the collection and organisation of data by ABCs internal application systems.

Instead of printing out purchase orders,

Q.3 What are the four Ps of marketing? Explain how it is applied to internet marketing

Answer: The four Ps - Product, Price, Place and Promotion are widely used to divide marketing.

Let us now discuss the four Ps in terms of e-marketing in order to understand the full

significance of the internet in marketing.

Product: Various factors have to be thought upon by online marketers with respect to the

products they sell. The

Q.4 Analyze the structure of a website

Answer: The website structure is similar to the human skeleton or nervous system. A website is

connected through a network of links into something that provides form and function to the site.

In order to analyse the web

Q.5 List the benefits of online catalogue

Answer: An online catalogue is a list or itemised display, as of titles, course offerings, or

articles for exhibition or sale, usually including descriptive information or illustrations. It is a

time saving tool that provides valuable information to the prospective customers about your

product specifications. It facilitates the potential customers to locate the products according to

their specifications.

Q.6 Define m-commerce? Describe the areas of potential growth and future of m-

Commerce?

Answer: m-commerce does not have any precise definition. m-Commerce and its definition

varies from every individual. m-Commerce is called as next generation e-commerce. The process

of buying and selling of goods and

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