Chapter 1.

The revolution is just beginning

1. What is EC? How does it differ from e – business? Where does it intersect with e – business?
2. What are some of the unique features of E – commerce technology?
3. What is a marketspace
4. Compare online and traditional transactions in terms of richness?
5. Give examples of B2C, B2B, C2C, B2B2C e-commerce website
6. Describe three different stages in the evolution of e – commerce
7. List the major trends of EC
8.

Question 1
1a. E-commerce is the use of the Internet, the Web, and mobile apps and browsers
running on mobile devices to transact business. More formally, digitally enabled
commercial transactions between and among organizations and individuals.

1b. E-business the digital enabling of transactions and processes within a firm, involving
information systems under the control of the firm.

The difference of E – business and E-commerce:

E-commerce E – business

Focus Primarily concerned with Encompasses the broader

commercial transactions range of internal and
that involve an exchange of external digitally based
value across organizational activities within a firm.
boundaries.
 Revenue Generation Directly generates revenue May not directly generate
for the firm by selling revenue but provides
products or services to essential support for e-
external customers. commerce activities.
Examples Online sales, electronic Inventory management,
payments, supply chain customer relationship
management. management, online
collaboration.

In conclusion, while e-business includes e-commerce, e-commerce is a specific subset of

e-business that focuses on revenue-generating transactions. Moreover, the boundary
between e-business and e-commerce often blurs at the point where internal business
systems interact with external suppliers or customers. E-business applications become e-
commerce when a value exchange occurs.

1c. E-commerce and e-business intersect at the point where internal business systems link
up with external suppliers or customers. This is essentially where the firm's internal
processes and systems meet the external marketplace.
For example:
 Inventory management systems (e-business) are used to track stock levels. When these
systems are connected to online ordering platforms (e-commerce), customers can place
orders that directly impact inventory levels.
 Customer relationship management (CRM) systems (e-business) store customer data.
When integrated with e-commerce platforms, CRM systems can personalize marketing
efforts and provide relevant product recommendations.
 Supply chain management systems (e-business) coordinate the flow of goods and
services. When linked to online marketplaces, these systems can facilitate efficient order
fulfillment and delivery.
In these scenarios, the e-business systems provide the foundation for e-commerce
activities, enabling seamless transactions and interactions with customers and suppliers.

Question 2:
Eight unique features of E – commerce technology is: Ubiquity, Universal Standards, Global
Reach, Richness, Interactivity, Information Density, Personalization and Customization, Social
Technology
- Ubiquity: available just about everywhere and at all times
+ Example: E – commerce liberates the market from being restricted to a physical
space and makes it possible to shop from your desktop, at home, at work, or even
from your car.
- Global Reach: E-commerce can reach a global audience, expanding potential
markets beyond local or regional limitations.
- Universal Standards: The Internet's universal standards reduce market entry costs
and facilitate global transactions.
- Richness: E-commerce offers a richer experience, allowing for more detailed
product information and interactive communication.
- Interactivity: E-commerce enables two-way communication between merchants
and consumers, fostering engagement.
- Information Density: E-commerce provides vast amounts of information,
increasing transparency and reducing information asymmetry.
- Personalization and Customization: E-commerce allows for tailored marketing
messages and product offerings based on individual preferences.
- Social Technology: E-commerce platforms enable user-generated content, social
networking, and community building.
Question 3:
Marketspace is the area of actual or potential commercial value in which a business intends to
operate
It encompasses the entire online landscape where a business can interact with customers,
suppliers, and other stakeholders. This includes:
 Online platforms: Websites, mobile apps, social media channels, and other digital
platforms where a business can sell products or services.
 Digital channels: Email, SMS, chatbots, and other communication channels used to
reach and engage customers.
 Data and analytics: Information collected and analyzed to understand customer
behavior, preferences, and market trends.
Question 4:
Comparing Online and Traditional Transactions in Terms of Richness
Richness in the context of transactions refers to the complexity and content of the message or
interaction.
Traditional Transactions
 High Richness: Traditional transactions often have high levels of richness. This is due to
face-to-face interactions, which allow for:
- Visual cues: Seeing body language and facial expressions.
- Aural cues: Hearing tone of voice and other verbal nuances.
- Tactile cues: Physically examining products.
Online Transactions
 Historically Lower Richness: Online transactions were initially limited in richness, often
relying solely on text and static images. This could make it difficult to convey the full
experience or quality of a product.
 Increasing Richness: With advancements in technology, online transactions have become
increasingly rich:
- High-quality images and videos: Providing detailed visual representations of
products.
- Virtual reality and augmented reality: Creating immersive experiences that closely
mimic physical interactions.
Question 5: Examples of B2C, B2B, C2C, B2B2C e-commerce website.
+ B2C—business-to-consumer
- Amazon: A massive online retailer selling a wide range of products to individual
consumers.
- eBay: An online auction and marketplace where individuals and businesses can
buy and sell items.
- Zappos: An online shoe retailer known for its excellent customer service.
+ B2B—business-to-business
- Go2Paper is an independent third-party marketplace that serves the paper
industry.
- Alibaba: A global online marketplace for wholesale trade, connecting businesses
from around the world.
- Grainger: A leading distributor of industrial supplies and equipment to
businesses.
- SAP Ariba: A cloud-based procurement platform that helps businesses manage
their supplier relationships.
+ C2C—consumer-to-consumer
- Online platforms such as eBay, Etsy, and Craigslist enable consumers to sell
goods directly to other consumers. Airbnb and Uber provide similar platforms for
services such as room rental and transportation.
- Etsy: An online marketplace for handmade and vintage items, primarily sold by
individual sellers.
 - Facebook Marketplace: A platform within Facebook where users can buy and
sell items locally.
- Craigslist: A classifieds website where users can buy, sell, or trade items in
various categories.

+ B2B2C (Business-to-Business-to-Consumer)
- Booking.com: A travel booking website that partners with hotels and other
accommodations to offer rooms to individual consumers.
- TripAdvisor: A travel website that allows users to review hotels, restaurants, and
attractions. It partners with businesses to offer bookings and promotions.
- Groupon: A daily deals website that partners with local businesses to offer
discounted deals to consumers.
Question 6:

1. Invention (1995-2000): This period was marked by explosive growth and innovation. E-
commerce primarily focused on selling simple retail goods due to bandwidth limitations.
Marketing relied on basic display ads and search engines were not very powerful. This period
was fueled by venture capital and ended with the "dot-com crash" in 2000.
2. Consolidation (2001-2006): This period saw a shift towards a more business-driven approach.
Traditional firms embraced the web to strengthen their market positions. E-commerce expanded
to include services like travel and finance. Broadband adoption and powerful personal computers
facilitated this growth. Marketing strategies included search engine advertising, rich media ads,
and targeted marketing based on user queries.
3. Reinvention (2007-Present): This ongoing period is characterized by the rise of Web 2.0 (user-
generated content), mobile devices (smartphones, tablets), and local e-commerce (local goods
and services). On-demand service economies facilitated by mobile apps and cloud computing
emerged. Social media like Facebook, Instagram, etc. became a central marketing tool.
Entertainment content became a major source of revenue and mobile devices became shopping
and entertainment hubs. The future of e-commerce might involve the metaverse and Web3
concepts.
Question 7:
The major trends of EC:
Chapter 2. E – commerce Business Models and Concepts
1. What is a business model? How does it differ from a business plan?
2. What are eight key components of an effective business model?
3. Describe the five primary revenue models used by e – commerce businesses
4. Examples of: transaction model, subscription model, advertising model, sale models,
affiliate marketing model
5. Benefits of E-commerce
6. Business Value Proposition
7. What is CPA, CTR, CPQL, CPL, PPC, CPS, CPO stand for?

Question 1: What is a business model? How does it differ from a business plan?
A business model is a set of planned activities (sometimes referred to as business processes)
designed to result in a profit in a marketplace.
A business plan is a document that describes a firm’s business model which takes into account
the competitive environment.
In some cases the business model and business plan are very close insofar as the business model
explicitly takes into account the competitive environment (Ovans, 2015; Magretta, 2002). The
business model is at the center of the business plan.
Question 2: What are eight key components of an effective business model?
a, Value Proposition
b, Market Opportunity
c, Revenue Model
d, Competitive Environment
e, Competitive Advantage
f, Market Strategy
g, Organizational Development
h, Management Team
Question 3: Describe the five primary revenue models used by e – commerce businesses
a, Advertising
In the advertising revenue model, a business that offers content, services, and/or products also
provides a forum for advertisements and receives fees from advertisers. Companies that are able
to attract the greatest viewership or that have a highly specialized, differentiated viewership and
are able to retain user attention (“stickiness”) are able to charge higher advertising rates.
b, Subscription
The subscription revenue model involves businesses charging a subscription fee for access to
their content or services. To overcome user disinclination, content must be perceived as high-
value, premium offerings.
c, Transaction Fee
In the transaction fee revenue model, a business receives a fee for enabling or executing a
transaction.
d, Sales
The sales revenue model involves a business selling goods, content, or services to customers.
Amazon uses this model for physical products, digital content, and services. Subscription-based
models like Birchbox and Dollar Shave Club offer home delivery and subscription-based
services.
e, Affiliate
In the affiliate revenue model, a business that steers customers to an “affiliate” receives a referral
fee or percentage of the revenue from any resulting sales. Social media influencers who receive a
commission from brands they represent can also be characterized as using an affiliate revenue
model
Question 4:
Examples of: transaction model, subscription model, advertising model, sale models, affiliate
marketing model
a, Advertising
Yahoo, for instance, derives a significant amount of revenue from display and video advertising.
b, Subscription
eHarmony (dating services), Ancestry (genealogy research), Microsoft’s Xbox Live (video
games), Pandora, Spotify, and Apple Music (music), Scribd and Amazon’s Kindle Unlimited
program (e-books), and Netflix and Hulu (television and movies)
c, Transaction Fee
For example, eBay provides a marketplace platform and receives a small transaction fee from a
seller if the seller is successful in selling the item. E*Trade, a financial services provider,
receives transaction fees when it executes certain types of financial transactions on behalf of a
customer.
d, Sales
Birchbox, which offers home delivery of beauty products for a $15 monthly or a $156 annual
subscription cost, is one example. Dollar Shave Club, which sells razor blades by subscription
and was acquired by Unilever for $1 billion, is another.
e, Affiliate
For example, MyPoints makes money by connecting companies with potential customers by
offering special deals to its members. When they take advantage of an offer and make a
purchase, members earn “points” that they can redeem for freebies, and MyPoints receives a fee.
Community review businesses, such as TripAdvisor, Yelp, and Angi typically receive some of
their revenue from steering potential customers to websites where customers make a purchase.
Question 5:
Benefits of E-commerce
For Businesses:
a, Global Reach: E-commerce allows businesses to transcend geographical limitations, enabling
them to serve a worldwide market. Unlike traditional commerce, which is limited to a particular
region, e-commerce connects companies with customers around the globe.
b, Ubiquity: E-commerce operates 24/7, giving businesses the ability to reach customers at any
time and providing continuous access to their platforms. This is a fundamental shift from brick-
and-mortar stores that are limited by operating hours.
c, Interactivity: Laudon emphasizes that e-commerce enables direct two-way communication
between businesses and consumers. This creates a more dynamic and interactive customer
experience compared to traditional methods.
d, Customization/Personalization: E-commerce platforms can tailor marketing, sales, and
products to individual consumer preferences. Businesses can use data collected through customer
interactions to personalize recommendations and offers, enhancing customer loyalty and
satisfaction.
e, Cost Efficiency: E-commerce reduces the costs of physical storefronts, warehousing,
inventory management, and personnel. Automation of processes such as order fulfillment and
customer support further enhances operational efficiency.
f, Information Density: The Internet increases the richness and amount of information available
to both businesses and consumers. Companies can provide more detailed product descriptions
and data while customers can access user reviews, price comparisons, and expert opinions before
making a purchase decision.
g, Lower Transaction Costs: Through automated sales processes, e-commerce reduces costs
associated with traditional sales channels, such as handling cash, employing salespeople, or
managing physical stores.
h, Scalability: E-commerce businesses can easily scale operations up or down based on market
demand without requiring significant capital investment in new physical infrastructure.
For Consumers:
a, Convenience and Accessibility: E-commerce platforms are available anytime, allowing
consumers to shop whenever and wherever they want, without the constraints of traditional store
hours or locations.
 b, Information Richness: E-commerce platforms provide consumers with detailed product
information, customer reviews, and easy access to comparison shopping. This empowers
consumers to make better-informed purchasing decisions.
c, Increased Choices and Variety: Customers have access to a wider variety of products and
services than they would in traditional retail settings. They are no longer limited by their local
stores’ inventory.
d, Lower Prices: Due to reduced operating costs, e-commerce businesses often offer lower
prices than their brick-and-mortar counterparts. Online marketplaces also make it easier for
consumers to compare prices and find the best deals.
e, Personalization: Customers benefit from personalized shopping experiences. Based on their
browsing behavior, purchase history, and preferences, e-commerce platforms can recommend
products that align with their needs.
f, Social Networking and Community: E-commerce allows consumers to engage with brands
and other customers via reviews, forums, and social media, creating a more community-driven
shopping experience.
Question 6:
Business Value Proposition
A company’s value proposition is at the very heart of its business model. A value proposition
defines how a company’s product or service fulfills the needs of customers (Payne, Frow, and
Eggert, 2017). To develop and/or analyze a firm’s value proposition, you need to understand why
customers will choose to do business with the firm instead of with another company and what the
firm provides that other firms do not and cannot. From the consumer point of view, successful e-
commerce value propositions include personalization and customization of product offerings,
reduction of product search costs, reduction of price discovery costs, and facilitation of
transactions by managing product delivery
For example, Amazon revolutionized book shopping by allowing customers to shop from home
or office 24/7, with immediate stock availability. The Kindle e-book service further enhances this
convenience, making e-books instantly available with no shipping delay. Amazon's primary
value propositions are unparalleled selection and convenience.
Question 7:
What is CPA, CTR, CPQL, CPL, PPC, CPS, CPO stand for?
CPA: cost per action. Advertiser pays only for those users who perform a specific action.
CTR: Click Through Rate
CPL (cost per lead): Customers fill out the registration form and they get a commission, often
seen in financial campaigns Customers just need to fill out the form, even if they don't borrow
money, they still get a commission.
CPQL (Cost Per Qualified Lead): Orders that meet the criteria required by the supplier will be
counted as commission for you.
PPC: stands for pay-per-click, a model of digital advertising where the advertiser pays a fee each
time one of their ads is clicked.
CPS : Cost per Sale. CPS is a form of paying commission on a successful purchase (sale).
CPO: Cost per order.

Chapter 3. EC infrastructure: The internet, The Web, and The Mobile Platform
Chapter 2 Part 2. Technology Infrastructure for E – commerce
Chapter 3. EC infrastructure: The internet, The Web, and The Mobile Platform
 1. What are the attribute of website (interactive, measurable…)
2. List data privacy policy of Lazada (short summary)
3. List data privacy policy of Google
4. What are smartphones a disruptive technology?
5. How is TCP/IP protocol related to information transfer on the Internet?
6. What is an Ipv6 address? Why are Ipv6 address necessary?
7. What is cloud computing, and how has it impacted the Internet?
8. What has been the impact of the development of mobile apps?
9. Name and describe five services currently available through the Web
10. Whay is smartphone a disruptive technology
11. What is 5G
12. Name and describe five services currently available through the Web
13. What is LAN, WAN, MAN. Types of LAN
14. Compare and contrast Internet, Intranet, Extranet
15. List of TLDs by ICANN
16. What is TCP/IP

Question 1:
A website is a collection of interconnected web pages that are accessible through the internet. It
can serve various purposes, from providing information to facilitating e-commerce or social
interaction. Here are some key attributes of a website:
- Interactive:
 Dynamic content: Websites can dynamically generate content based on user input or real-
time data.
 User interaction: They allow users to interact with the content through forms, buttons,
and other elements.
 Feedback mechanisms: Websites often include features for user feedback, such as contact
forms or comment sections.
- Measurable:
 Analytics: Websites can track user behavior, such as page views, time spent on site, and
conversion rates.
 Key Performance Indicators (KPIs): Websites can be measured against specific goals and
objectives, such as increasing traffic or improving user engagement.
- Accessible:
 Usability: Websites should be designed to be easy to navigate and use, even for users
with disabilities.
 Compatibility: Websites should be compatible with different devices and browsers.
 Accessibility standards: Websites should adhere to accessibility standards like WCAG
(Web Content Accessibility Guidelines) to ensure inclusivity.
- Secure:
 HTTPS: Websites should use HTTPS to encrypt data transmitted between the server and
the user's browser.
 Data protection: Websites should have measures in place to protect user data from
unauthorized access or breaches.
- Responsive:
  Adaptive design: Websites should adjust their layout and content to fit different screen
sizes and devices.
 Mobile-friendly: Websites should be optimized for mobile devices to provide a good user
experience on smaller screens.
- Informative:
 Clear and concise content: Websites should present information in a clear and concise
manner.
 Relevant content: The content should be relevant to the website's purpose and target
audience.
- Engaging:
 Visual appeal: Websites should be visually appealing and use appropriate design
elements.
 User experience: Websites should provide a positive and enjoyable user experience.
Question 2:
List data privacy policy of Lazada (short summary)
 Lazada collects and processes personal data from individuals participating in its Delivery
and Station Programs. This data includes:
 Personal Information: Name, gender, national ID number, date of birth, nationality,
country and city of birth/residence, driver's license details, geo-location, location tracking
data, vehicle information, bank account/payment details, mailing address, phone
numbers, email address, work-related health issues, disabilities, and photographs.
 Documents: Any other documents or information containing personal data submitted
when accessing or using Lazada's Portals.
 Lazada collects this data for various purposes, including:
 Processing and screening applications for the Delivery Program.
 Assessing suitability for the Delivery Program through interviews.
 Conducting background checks.
 Maintaining and updating records of applications.
 Complying with laws and regulations.
 Preventing fraud and illegal activities.
 Allocating services to participants.
 Facilitating service provision.
 Providing solutions to improve service delivery.
 Administering accounts and contractual relationships.
 Conducting market research and analysis.
 Supporting business operations.
 Communicating with emergency services.
 Lazada may disclose personal data to third parties where necessary for the above
purposes.
 Lazada uses cookies and other technologies to collect information about user behavior on
its Portals. This data is used to improve the user experience and provide personalized
content.
 Participants have the right to withdraw their consent to Lazada's use of their personal data
at any time. However, this may affect their participation in the Delivery or Station
Program.
  Participants can request access to or correction of their personal data by contacting
Lazada's Data Protection Officer.
 Lazada takes measures to protect the security of personal data but cannot guarantee
complete security.
Question 3:
List data privacy policy of Google:
 Account Information: Name, email address, phone number, profile picture, etc.
 Usage Data: Information about how users interact with Google products, including search
queries, websites visited, videos watched, etc.
 Location Data: Information about the user's location, including IP address, GPS data, etc.
 Device Information: Information about the user's device, including device type, operating
system, and app usage.
Google uses this data to:
 Personalize user experiences: Google tailors search results, recommendations, and ads
based on user preferences and history.
 Improve products and services: Google uses data to identify trends and improve product
features.
 Protect user accounts: Google uses data to detect and prevent fraud and abuse.
Google shares user data with third parties:
 Google's partners: Google may share data with trusted partners to provide services, such
as advertising and analytics.
 Legal requirements: Google may share data with law enforcement or government
agencies as required by law.
Users have control over their data:
 Privacy settings: Users can manage their privacy settings to control what data Google
collects and how it is used.
 Data deletion: Users can delete their Google account or request the deletion of specific
data.
Google is committed to protecting user data:
 Security measures: Google implements robust security measures to protect user data from
unauthorized access.
 Transparency: Google is transparent about its data practices and provides users with
information about how their data is collected and used.
Question 4.
What are smartphones a disruptive technology?
Smartphones are a disruptive technology because they have radically altered the personal
computing and e-commerce landscape. They involve a major shift in computer processors and
software from the 40-year dual monopolies established by Intel and Microsoft. The mobile
platform also has profound implications for e-commerce because it influences how, where, and
when consumers are able to shop and buy.
Question 5.
How is TCP/IP protocol related to information transfer on the Internet?
Transmission Control Protocol/Internet Protocol (TCP/IP) (also sometimes referred toas the
Internet protocol suite) has become the core communications protocol for the Internet (Cerf and
Kahn, 1974). TCP/IP is a large family of protocols named after its most important members: TCP
and IP. TCP establishes the connections among sending and receiving computers and makes sure
that packets sent by one computer are received in the same sequence by the other, without any
packets missing. IP provides the Internet’s addressing scheme and is responsible for the actual
delivery of the packets.
Question 6.
What is an Ipv6 address? Why are Ipv6 address necessary?
The IP addressing scheme answers the question “How can billions of devices attached to the
Internet communicate with one another?” The answer is that every device connected to the
Internet must be assigned an address—otherwise it cannot send or receive TCP packets. For
instance, when you sign onto the Internet, your device is assigned a temporary address by your
Internet Service Provider. Most corporate and university computers attached to a local area
network have a permanent IP address. An IPv6 Internet address is 128 bits, so it can support up
to 2 (3.4 1038) 128 × addresses, many more than IPv4 can. According to Akamai, in the United
States about 40% of Internet traffic now occurs over IPv6. (Akamai, 2022)
The main reason IPv6 was developed was to provide a solution for the eventual exhaustion of
addresses in IPv4. Unlike its predecessor, IPv6 uses four times more bits to address devices on
the internet. These extra bits provide an address space for approximately 3.4 x 10^ 38 devices.
IPv6 addresses offer a much larger address space, capable of supporting a significantly greater
number of devices connected to the internet. This scalability is crucial to accommodate the
growing demand for internet connectivity. IPv6 provides a foundation for future internet
technologies and services, ensuring that the internet can continue to evolve and meet the needs of
users for years to come.
Question 7.
What is cloud computing, and how has it impacted the Internet?
Cloud computing is a model of computing in which computer processing, storage, software, and
other services are provided as a shared pool of virtualized resources via the Internet. These
“clouds” of computing resources can be accessed on an as-needed basis from any connected
device and location.
Cloud computing has impacted the Internet by radically reducing the cost of building and
operating Web sites because the necessary hardware infrastructure and software can be licensed
as a service from Internet providers at a fraction of the cost of purchasing these services as
products.This means firms can adopt “pay-as-you-go” and “pay-as-you-grow” strategies when
building out their businesses. For instance, according to Amazon, hundreds of thousands of
customers use Amazon Web Services. For individuals, cloud computing means you no longer
need a powerful laptop or desktop computer to engage in e-commerce or other activities. Instead,
you can use much less expensive tablet computers or smartphones. For businesses, cloud
computing means that a significant part of hardware and software costs (infrastructure costs) can
be reduced because firms can obtain these services online for a fraction of the cost of owning
them, and they do not have to hire an IT staff to support the infrastructure.
Question 8.
The impact of the development of mobile apps:
The smartphone in your pocket or the tablet computer on your lap has become not only a
general-purpose computer but also an always-present shopping tool as well as an entirely new
marketing and advertising platform for vendors. Early e-commerce applications using desktops
and laptops were celebrated as allowing people to shop at home in their pajamas. Smartphones
and tablets extend this range to far beyond the home: You can now shop anywhere, everywhere,
and all the time, in between talking, texting, watching video, and listening to music.
Question 9.
Name and describe five services currently available through the Web
 E-mail: This is one of the oldest and most widely used services on the Internet, enabling
users to send and receive messages and file attachments to and from other users globally.
Popular e-mail providers include Gmail, Outlook, and Yahoo Mail.
 Instant Messaging (IM): This service allows real-time text communication between
users over the Internet. Platforms like WhatsApp, Facebook Messenger, and Slack
provide the ability to send instant messages, voice notes, and multimedia content.
 Search Engines: Web search engines like Google, Bing, and Yahoo enable users to locate
information quickly by entering keywords. These engines retrieve relevant content from
vast databases of indexed web pages.
 Blogs: Blogs are personal or corporate web pages used to communicate with a broad
audience on a variety of topics. Websites like WordPress, Blogger, and Medium allow
users to create and share blog posts.
 Video Conferencing and Chat: Services like Zoom, Microsoft Teams, and Google Meet
allow individuals and businesses to hold virtual meetings, webinars, and conferences with
real-time video and audio interaction over the web.
These services enhance global communication, collaboration, and information sharing.

Question 10. Why is the smartphone a disruptive technology?

There are several key reasons why the smartphone is considered a disruptive technology:
 Industry Disruption
Smartphones have brought about significant changes across multiple industries, leading to the
decline or extinction of several traditional products and services.
In telecommunications, landlines and payphones have become nearly obsolete as smartphones
dominate the way people communicate. Similarly, the rise of high-quality cameras in
smartphones has caused a decline in the demand for standalone cameras. Portable music players,
such as the iPod, have also been largely replaced by smartphones that offer built-in music
playback capabilities. Additionally, print media, including newspapers and books, has seen a
sharp decrease in demand as people turn to digital formats on their smartphones. Even
standalone calculators have become less relevant as smartphone apps now offer calculator
functions.
 Functionality and Indispensability
Smartphones have become essential to modern life due to the wide range of functionalities they
provide. In terms of communication, smartphones offer the ability to make calls, send messages,
and participate in video conferencing. They also provide easy access to information through
internet browsing and apps, making them a valuable tool for quick searches and staying updated.
Smartphones have also become a major source of entertainment, allowing users to play games,
watch videos, and listen to music. Additionally, they enhance productivity by enabling users to
manage tasks like checking emails, editing documents, and organizing calendars, making them
indispensable in both personal and professional settings.
 Technological Advancements
The continuous evolution of smartphone technology has made these devices more powerful and
versatile. Improved processing power allows smartphones to handle complex tasks and run
demanding apps smoothly. The quality of smartphone cameras has also advanced significantly,
with many now capable of capturing professional-level photos and videos. Moreover,
advancements in battery technology have increased the longevity of smartphones, allowing them
to last longer on a single charge. With faster internet speeds, such as 5G, and better connectivity
options, smartphones have become even more effective tools for communication and data access.
 App Ecosystem
One of the key elements of smartphones' success is the vast and diverse app ecosystem. There
are apps available for nearly every specialized task, from fitness tracking and navigation to
language learning. For businesses, smartphones have become essential tools, with apps that
enhance productivity, streamline communication, and aid in management tasks. Entertainment
apps, including games, streaming services, and social media platforms, have also become a
significant part of smartphone usage, providing endless options for users to engage with content.
 Economic Impact
Smartphones have had a profound economic impact, creating entirely new industries while
disrupting traditional ones. The development of mobile apps has grown into a massive industry,
providing jobs and fueling innovation. E-commerce has been transformed by smartphones,
making it easier for consumers to shop online and make payments through mobile platforms.
Furthermore, businesses have adapted to the smartphone era by focusing on digital marketing,
using mobile advertising to reach their target audience in more personalized and effective ways.
 Social Impact
The adoption of smartphones has dramatically changed the way people interact and consume
information. Social media platforms like Facebook, Instagram, and Twitter have become integral
parts of social life, facilitating communication and content sharing. Smartphones have also made
information sharing easier and faster, enabling individuals to share news, opinions, and
experiences with just a few taps. However, the widespread use of smartphones has highlighted
the issue of the digital divide, as not everyone has equal access to these technologies, raising
concerns about societal inequality.

Question 11. What is 5G?

5G - a cellular standard for high-bandwidth mobile broadband. It is the fifth generation of
cellular technology, designed to offer significantly faster speeds, lower latency, and greater
capacity compared to previous generations like 4G. With 5G, users can experience download
speeds of up to 10 Gbps or more, and latency as low as 10 milliseconds, allowing data to be
transmitted and received almost instantly. Moreover, 5G supports massive connectivity, with the
ability to handle up to 100,000 devices per square kilometer, enabling large-scale connections.
5G's features open up a wide range of applications. For example, in autonomous vehicles, the
low latency is crucial for real-time communication between cars and infrastructure, which is
essential for safe and efficient autonomous driving. Augmented and virtual reality experiences
also benefit from 5G's high speed and low latency, creating more seamless and immersive
interactions. Additionally, the Internet of Things (IoT) will see expanded capabilities, with 5G
enabling the connection of a vast number of devices, making smart cities, smart homes, and
automated industries a reality.
In the business world, 5G can enhance online retail experiences by supporting features like live
streaming, AR/VR try-ons, and faster, contactless payments. In digital marketing, 5G allows for
more interactive and personalized ads, such as high-resolution mobile videos and AR/VR-based
advertising.
Although 5G networks are being rolled out globally, full coverage and widespread adoption may
take some time. As the technology develops, it is expected to revolutionize various industries,
bringing significant changes to how we live and work in the future.
Question 12. Name and describe five services currently available through the Web.
The impact of the development of mobile apps:
The smartphone in your pocket or the tablet computer on your lap has become not only a
general-purpose computer but also an always-present shopping tool as well as an entirely new
marketing and advertising platform for vendors. Early e-commerce applications using desktops
and laptops were celebrated as allowing people to shop at home in their pajamas. Smartphones
and tablets extend this range to far beyond the home: You can now shop anywhere, everywhere,
and all the time, in between talking, texting, watching video, and listening to music.

Question 13. What is LAN, WAN, MAN. Types of LAN

LAN (Local Area Network): LANs connect devices within a limited geographical area, such as
a single building, office, or school. They allow for the sharing of resources and data among
connected devices. LANs offer very high speeds, typically ranging from 100 Mbps to 10 Gbps,
and are generally privately owned. They have low maintenance costs, minimal congestion, and
cover areas up to a few kilometers. LANs are known for their high fault tolerance and reliability.
Common types of LAN include:
 Ethernet LAN: Utilizes Ethernet cables to connect devices in a wired network.
 Wi-Fi LAN: Uses wireless technology to connect devices without physical cables.
 Token Ring LAN: Uses a token-passing protocol to control access to the network.
 Home Area Network (HAN): A specialized LAN within a home environment to connect
personal devices.
MAN (Metropolitan Area Network): MANs cover larger areas than LANs but smaller than
WANs, typically ranging from 5 to 50 kilometers. They connect devices across a city or
metropolitan area, providing moderate speeds from 10 Mbps to 1 Gbps. MANs can be either
publicly or privately owned and are more costly to maintain than LANs, with higher congestion
levels. They offer average fault tolerance and are designed for high-speed connectivity over
medium distances. Types of MAN include:
 Fiber Optic MAN: Utilizes fiber optic cables to deliver high-speed data over a
metropolitan area.
 Wireless MAN: Uses wireless technology to connect devices over medium distances,
often employed in urban environments.
WAN (Wide Area Network): WANs span extensive geographical areas, potentially covering
entire countries or continents. They connect multiple LANs and MANs over long distances,
using technologies such as public switched telephone networks, satellite links, or leased lines.
WANs offer lower speeds compared to LANs and MANs, ranging from a few Kbps to Mbps, and
are expensive to maintain. They experience high congestion and significant propagation delays
due to the vast distances involved. Types of WAN include:
 Public WAN: Operated by telecommunications companies and accessible to the general
public, such as the Internet.
  Private WAN: Owned and operated by private organizations for internal communication,
often using leased lines or VPNs.
 Hybrid WAN: Combines various WAN technologies to optimize performance and cost-
effectiveness.
Question 14. Compare and contrast Internet, Intranet, Extranet

Feature Internet Intranet Extranet

A global network An extension of an intranet,
connecting billions of A private network within an connecting to external
Definition devices organization parties
Global information Internal communication and Collaboration with external
Purpose sharing document management partners
Between internal and
Scope Global Within an organization external
Security Low High Medium
Anyone with an Employees and authorized
Users internet connection Organization's employees external partners
Public
accessibility Public Private Semi-public
Access
control Open Restricted Restricted
Complexity High Medium Medium

Often free for end- Higher due to infrastructure Lower than Internet, higher
Cost users investment than Intranet
Employee portal, internal
Google, Facebook, document management Partner portal, order
Examples YouTube system management system

Question 15. List of TLDs by ICANN

 Generic Top-Level Domains (gTLDs)
+ Common gTLDs:
.com: Originally designated for commercial organizations, it is now available for any purpose.
.net: Typically associated with network services, but can be used broadly.
.org: Often used by non-profit organizations.
.edu: Specifically reserved for educational institutions.
.gov: Restricted to government entities.
.mil: Designated for military organizations.
+ New gTLDs:
Geographic names: Examples include .nyc (New York City) and .london (London).
Business identifiers: Such as .restaurant and .realtor.
Brand names: Examples include .bmw and .suzuki.
A wide range of other options with diverse themes.
  Country Code Top-Level Domains (ccTLDs)
.uk: United Kingdom.
.au: Australia.
.cn: China.
.jp: Japan.
Each country typically has its own ccTLD, reflecting its national identity on the Internet.

 Sponsored Top-Level Domains (sTLDs)

.aero: For the aviation industry.
.coop: For cooperatives.
.museum: For museums.
These domains serve specific use cases and communities.

 Infrastructure Top-Level Domain (arpa): Specifically designated for purposes related

to Internet infrastructure.

 Test Top-Level Domain (test): Reserved for testing and development purposes.

Question 16. What is TCP/IP

TCP/IP, or Transmission Control Protocol/Internet Protocol, is a suite of communication
protocols used to interconnect devices on the Internet and other networks. It is the foundational
technology that underpins the Internet and many other networks.
 Transmission Control Protocol (TCP): Manages the establishment of connections
between devices, ensuring that data packets are delivered accurately and in the correct
order. It handles error-checking and guarantees that packets are reassembled correctly.
 Internet Protocol (IP): Provides addressing and routing, ensuring that data packets are
sent from the source to the correct destination across networks. It defines how addresses
are assigned and how packets are routed through the network.
TCP/IP is organized into four layers:
1. Network Interface Layer: Manages the physical and data link aspects of network
communication, including how packets are placed onto the network and received from it.
2. Internet Layer: Handles addressing, routing, and packaging of data packets to ensure
they reach their destination across diverse networks.
3. Transport Layer: Ensures reliable communication between applications by managing
the flow of data, error checking, and packet sequencing. TCP and UDP operate at this
layer.
4. Application Layer: Includes protocols that provide various network services to
applications, such as HTTP (web browsing), FTP (file transfer), and SMTP (email).
TCP/IP enables diverse devices and networks to communicate and share information effectively,
forming the backbone of modern digital communication.
 Chapter 4: Building EC Presense: Website, Mobile sites, and Apps
Chapter 3 Chapter 4. Building EC Presense: Website, Mobile sites, and Apps
1. What are the main factors to consider in developing an e – commerce presence?
2. Define the systems development life cycle, and discuss the various steps involved in
creating an e – commerce site
3. Discuss the differences between a simple logical and a simple physical website design
4. Compare the costs for system development and system maintenance. Which is more
expensive, and why?
5. Why is a website so costly to maintain? Discuss the main factors that impact cost.
6. Name the basic functionalities that web server software should provide?
7. What are the main factors to consider in choosing the best hardware platform for your
website
8. What are eight most important factors impacting website design, and how do they effect a
site’s operation?
9. What is the difference between a mobile web app and a native app?

Question 1. What are the main factors to consider in developing an e – commerce presence?
Management; software; hardware architecture; design; telecommunications and human
resources:
On the organizational and human resources fronts, you will have to bring together a team of
individuals who possess the skill sets needed to build and manage a successful e-commerce
presence. This team will make the key decisions about business objectives and strategy,
technology, design, and social and information policies. The entire development effort must be
closely managed if you hope to avoid the disasters that have occurred at some firms.
Hardware, software, and telecommunications infrastructure: The demands of your customers
should drive your choices of technology. Your customers will want technology that enables them
to easily find what they want, view the product, purchase the product, and then receive the
product from your warehouses quickly.
You will also have to carefully consider design. Once you have identified the key decision areas,
you will need to think about a plan for developing the project. There are a number of different
methodologies for building information systems such as websites.

Question 2. Define the systems development life cycle, and discuss the various steps
involved in creating an e – commerce site:

Systems development life cycle (SDLC) a methodology for understanding the business
objectives of any system and designing an appropriate solution.
Various steps involved in creating an e-commerce site: systems analysis/planning, systems
design, building the system, testing, and implementation and maintenance.
 Systems Analysis/Planning: Identify Business Objectives, System Functionality, and
Information Requirements: One way to start is to identify the specific business objectives
for your site and then to develop a list of system functionalities and information
requirements. Business objectives are simply capabilities you want your site to have.
System functionalities are types of information systems capabilities required to achieve
your business objectives. The information requirements for a system are the information
 elements that the system needs to achieve the business objectives.These objectives must
be translated into a description of system functionalities and ultimately into a set of
precise information requirements.
 System Design: Hardware and Software Platforms: Once you have identified the business
objectives and system functionalities and have developed a list of precise information
requirements, you can begin to consider just how all this functionality will be delivered.
You must come up with a system design specification—a description of the main
components in the system and their relationship to one another. The system design itself
can be broken down into two components: a logical design and a physical design.
 Building the System:
 In-House versus Outsourcing: Once you have a clear idea of both the logical and the
physical designs for your site, you can begin considering how to actually build the site.
You have many choices, and much depends on the amount of money you are willing to
spend. Choices range from outsourcing everything (including the actual systems analysis
and design) to building everything yourself (in-house). Outsourcing involves hiring an
outside vendor to provide the services involved in building the site rather than using in-
house personnel. You also have a second decision to make: Will you host (operate) the
site on your firm’s own servers or will you outsource the hosting to a web host provider?
These decisions are independent of each other, but they are usually considered at the
same time. There are some vendors who will design, build, and host your site, while
others will either build or host (but not both).
 Build Your Own versus Outsourcing Let’s take the building decision first. If you elect to
build your own website, there are a range of options. Unless you are fairly skilled, using a
pre-built template to create the website may be the best choice. A number of companies,
such as WordPress, Wix (see the Insight on Business case), Squarespace, Shopify, Square,
and Weebly, provide inexpensive and easy-to-use website-building tools. All of these
companies also provide access to built-in e-commerce functionality. However, if you do
so, you will be limited to the “look and feel” and functionality provided by the templates
and infrastructure supplied by these vendors
 Host Your Own versus Outsourcing: Now let’s look at the hosting decision. Few small to
medium-sized businesses host their own websites anymore. Most choose to outsource
hosting, which means that the hosting company is responsible for ensuring the site is
“live,” or accessible, 24 hours a day. By agreeing to a monthly fee, the business need not
concern itself with many of the technical aspects of setting up a web server and
maintaining it, telecommunications links, nor with staffing needs
 Testing the System:
Once the system has been built and programmed, you will have to engage in a testing process.
Depending on the size of the system, this could be fairly difficult and lengthy. Testing is required
whether the system is outsourced or built in-house. A complex e-commerce site can have
thousands of pathways through the site, each of which must be documented and then tested. It is
important to note that testing is generally underbudgeted. As much as 50% of the budget can be
consumed by testing and rebuilding (usually depending on the quality of the initial design). Unit
testing involves testing the site’s program modules one at a time. System testing involves testing
the site as a whole, in the same way a typical user would when using the site. Because there is no
truly “typical” user, system testing requires that as many conceivable paths as possible be tested.
Final acceptance testing requires that the firm’s key personnel and managers in marketing,
production, sales, and general management actually use the system as installed on a test server.
This acceptance test verifies that the business objectives of the system as originally conceived
are in fact working.
Another form of testing is called A/B testing (or split testing). This form of testing involves
showing two versions (A and B) of a web page or website to different users to see which version
performs better. There are several different types of A/B testing that can be used for a website
design project. A template test compares the same general page content using two different
layouts and/or design treatments. A new concept test compares a control page with one that is
very different. A funnel test compares the flow through a series of pages (such as a product page,
to a registration page, to a shopping cart page, versus skipping the registration page) to see which
one results in a higher percentage of conversions. Multivariate testing is a much more
sophisticated form of testing than A/B testing. Multivariate testing involves identifying specific
elements, or variables, on a web page, such as a headline, image, button, and text, creating
versions for each element, and then creating a unique combination of each element and version
to test. So, for example, if there are three elements and two versions of each, there will be eight
possible combinations (222 ⋅ ⋅ = 8) to test. When used correctly, multivariate testing enables
designers to identify the most optimal layout, color, content, and format.
 Implementation, Maintenance, and Optimization:
Many people mistakenly believe that once an information system is installed, the work is done.
In reality, system maintenance is just beginning. Systems often break down unpredictably and
require ongoing checks, tests, and repairs. Maintenance costs are usually similar to development
costs. For example, a $40,000 e-commerce site might need $40,000 annually for upkeep, with
larger sites benefiting from economies of scale.
E-commerce sites require more maintenance than static systems like payroll because they are
constantly evolving. About 20% of time is spent fixing issues, 20% on updating data and
backend systems, and 60% on general administration, catalog updates, and system
improvements. A dedicated web team, including programmers, designers, and business
managers, is essential to ensure the site's success. Key tasks include responding to customer
feedback, monitoring performance, testing regularly, and benchmarking against competitors to
stay competitive and avoid losing customers due to site issues.

Question 3.Discuss the differences between a simple logical and a simple physical website
design
Logical design: describes the flow of information at your e-commerce site, the processing
functions that must be performed, the databases that will be used, the security and emergency
backup procedures that will be instituted, and the controls that will be used in the system
Simple physical design: translates the logical design into physical components. For instance, the
physical design details the specific model of server to be purchased, the software to be used, the
size of the telecommunications link that will be required, the way the system will be backed up
and protected from outsiders, and so on.

simple logical design simple physical design

 Purpose Focuses on the workflow and how Translates the logical components
data moves through the system. into actual physical components that
will be implemented.

Components It outlines the abstract processes Includes specific technologies,

and data stores without specifying hardware, and software that will be
the actual hardware or software used to build the system.
technologies.

Key User Actions: Such as login Hardware: Specifies the type of

elements verification and purchasing hardware like HP or Dell web servers,
products. and the necessary storage capacity
Data Flow: Shows how data moves (e.g., 5 terabytes).
between different entities (e.g., Software: Details the specific
from the user to the database). software and databases that will be
Processes: Such as verifying logins, used (e.g., Oracle SQL Database,
displaying catalog pages, and HCL Commerce).
confirming shipped orders. Network Connections: Types of
Data Stores: Customer information internet connections such as Cable,
and catalog databases that hold data DSL, or Wi-Fi that will support the
without specifying their structure or website's connectivity.
technology.

Question 4. Compare the costs for system development and system maintenance. Which is
more expensive, and why?
Cost for system maintenance: Ongoing Expenses: Maintenance is a continuous investment, often
comparable to the original development cost, or even higher over the lifespan of the system. For
example, an e-commerce site that costs $40,000 to build might require around $40,000 annually
for ongoing maintenance. This includes activities like bug fixes, updates, security patches, and
system enhancements to ensure optimal performance.
Larger websites, costing $1 million to develop, may benefit from economies of scale, potentially
reducing the annual maintenance budget to about 50%–75% of the original development cost.
For instance, such a site may require $500,000–$750,000 per year for maintenance.
Example: A $40,000 e-commerce site might need $40,000 each year for maintenance, while a $1
million site could require $500,000 to $750,000 annually for upkeep and improvements.

Costs for system development :

Initial Investment: Developing an e-commerce site can be a significant upfront expense. If you
opt for more advanced site-building packages, you’re likely investing in state-of-the-art software
that’s robust and well-tested, potentially allowing you to launch your site faster. However, the
evaluation process for choosing the right package can be time-consuming, and costs can escalate
quickly if extensive modifications are needed to fit your specific business requirements. A
package initially priced at $4,000 can easily grow into a $40,000–$60,000 development project
once customizations and integrations are factored in.
Example: A typical e-commerce site development could range from $40,000 to $1 million
depending on the complexity and level of customization involved.

=>Maintenance is typically more expensive over the long term.

 Recurring Nature of Maintenance: Unlike development, which is a one-time or short-term
investment, maintenance is ongoing. Over several years, the cost of maintaining and
updating the site will exceed the initial development cost.
 Dynamic Environment: E-commerce sites are constantly changing, improving, and
correcting issues. This constant evolution drives up the maintenance cost, especially if the
business frequently adds new features or needs to adapt to market changes and
technological advancements.
 Security and Compliance: As the site grows and handles more traffic, maintenance
becomes crucial to ensure the site remains secure, fast, and compliant with any new
regulations (e.g., GDPR, PCI-DSS compliance for payment security).
 Economies of Scale: While very large sites benefit from economies of scale, their
maintenance costs can still be significant, especially as their size and complexity
increase.
Although the initial cost of development can be high, maintenance is often more expensive in the
long run, especially since it is a recurring cost. Maintenance costs can parallel or exceed the
development cost annually, especially for small to medium-sized e-commerce sites. For very
large projects, maintenance may be somewhat reduced proportionally, but it remains a substantial
long-term investment.

Question 5. Why is a website so costly to maintain? Discuss the main factors that impact
cost.
Why is a website so costly to maintain: Unlike payroll systems, for example, e-commerce sites
are always in a process of change, improvement, and correction. Studies of traditional systems
maintenance have found 20% of the time is devoted to debugging code and responding to
emergency situations. Another 20% of the time is concerned with changes in reports, data files,
and links to backend databases. The remaining 60% of maintenance time is devoted to general
administration (making product and price changes in the catalog) and making changes and
enhancements to the system. E-commerce sites are never finished: They are always in the
process of being built and rebuilt. They are dynamic—much more so than payroll systems.

Discuss the main factors that impact cost: The long-term success of an e-commerce site for a
medium-sized to large business typically depends on a dedicated team of employees (the web
team) whose sole job is to monitor and adapt the site to changing market conditions. The web
team must be multi-skilled; it will typically include programmers, designers, and business
managers drawn from marketing, production, and sales support. One of the first tasks of the web
team is to listen to customers’ feedback on the site and respond to that feedback as necessary. A
second task is to develop a systematic monitoring and testing plan to be followed weekly to
ensure all the links are operating, prices are correct, and pages are updated. Other important tasks
of the web team include benchmarking (a process in which the site is compared with those of
competitors in terms of response speed, quality of layout, and design) and keeping the site
current on pricing and promotions. The Web is a competitive environment where you can very
rapidly frustrate and lose customers with a dysfunctional site.
Question 6. Name the basic functionalities that web server software should provide?
Basic web server functionality includes security services, file transfer, search services, data
capture, e-mail, and site management tools

Question 7. What are the main factors to consider in choosing the best hardware platform
for your website
 Speed, capacity, and scalability are three of the most important considerations in
choosing the most appropriate hardware for an e-commerce site.
 To evaluate how fast the site needs to be, companies need to assess the number of
simultaneous users the site expects to see, the nature of their requests, the types of
information requested, and the bandwidth available to the site. The answers to these
questions will provide guidance regarding the hardware necessary to meet customer
demand. In some cases, additional processing power can increase capacity, thereby
improving system speed.
 Scalability is also an important issue. Scaling up to meet demand can be done through
vertical or horizontal scaling or by improving processing architecture.

Question 8. What are eight most important factors impacting website design, and how do
they effect a site’s operation
  Metatags, keywords, titles, page contents: Search engines “crawl” your site and identify
keywords as well as title pages and then index them for use in searches. Pepper your
pages with keywords that accurately describe what you say you do in your metatag site
“description” and “keywords” sections of your source code. The goal is to find a balance
of the different types of keywords, including shorter head keywords that may be more
generic (such as “car”), body keywords that may be slightly more specific (such as
“British sports car”), and long-tail keywords that are much more detailed (such as “1968
red Jaguar XKE convertible”).
 Offer expertise: White papers, industry analyses, FAQ pages, guides, and histories are
excellent ways to build confidence on the part of users and to encourage them to see your
website as the place to go for help and guidance.
 Get linked up: Encourage other sites to link to your site; create a blog that attracts people
and who will share your URL with others and post links in the process. Create a
Facebook page for your company, and think about using Instagram or Pinterest to
develop a following or fan base for your products.
 Buy ads: Complement your organic search optimization efforts with paid search engine
keywords and ads. Choose your keywords, and purchase direct exposure on web pages.
You can set your budget and put a ceiling on it to control costs. See what works, and
observe the number of visits to your site produced by each keyword string.
 Local e-commerce: Developing a national market can take a long time. If your website is
particularly attractive to local people, or if it involves products sold locally, use keywords
that connote your location so that people can find you nearby. Town, city, and region
names in your keywords—such as “Hudson Valley honey” or “San Francisco blues
music”—can be helpful.

Question 9. What is the difference between a mobile web app and a native app?
A mobile web app is an application built to run on the mobile web browser built into a
smartphone or tablet computer. In the case of Apple, the native browser is Safari. Generally, a
mobile web app is built to mimic the qualities of a native app using HTML5, CSS, and
JavaScript. Mobile web apps are specifically designed for the mobile platform in terms of screen
size, finger navigation, and graphical simplicity. Mobile web apps can support complex
 interactions used in games and rich media; can perform real-time, on-the-fly calculations; and
can be geo-sensitive using the smartphone’s built-in global positioning system (GPS) function.
Mobile web apps typically operate more quickly than mobile websites but not as quickly as
native apps.

A native app is an application designed specifically to operate using a mobile device’s hardware
and operating system. These stand-alone programs can connect to the Internet to download and
upload data and can operate on this data even when not connected to the Internet. You can
download a book to an app reader, disconnect from the Internet, and read your book. Because the
various types of smartphones have different hardware and operating systems, apps are not “one
size fits all” and therefore need to be developed for different mobile platforms. An Apple app that
runs on an iPhone cannot operate on Android phones. As you learned in Chapter 3, native apps
are built using different programming languages depending on the device for which they are
intended, which is then compiled into binary code, and which executes extremely quickly on
mobile devices. For this reason, native apps are ideal for games, complex interactions, on-the-fly
calculations, graphic manipulations, and rich media advertising.

Chapter 4:
Chapter 4 Reading: Page 184 -
- Book 2: Chaffey, Dave – Digital business and E – commerce management 232
- PPT

Review question
1. What is digital business strategy
2. What are the functions of digital business strategy
3. List generic strategy process model (four steps)
4. Describe links of e-commerce strategy with other strategy in a company (ex.
Link with SCM strategy, marketing strategy…)

Question 1. What is digital business strategy

Definition of the approach by which applications of internal and external electronic
communications can support and influence business strategy
Question 2. What are the functions of digital business strategy
Supports corporate strategy: Digital business strategy should align with the overall goals and
objectives of the organization. It helps to ensure that digital initiatives contribute to the
achievement of the company's mission and vision.
Influences corporate strategy: Digital business strategy can identify new opportunities and
threats related to electronic network adoption. This information can be used to update and refine
the corporate strategy to capitalize on emerging trends and mitigate risks.
Supports functional marketing and supply chain management strategies: Digital business
strategy can provide guidance for specific functions such as marketing and supply chain
management. It can help to define digital initiatives that support the goals of these departments,
such as improving customer experience or optimizing operations.
Avoids problems associated with poorly defined digital business strategy: A clearly defined
digital business strategy can help to prevent issues such as missed opportunities, inappropriate
direction, limited integration, and resource wastage. By establishing a clear roadmap for digital
transformation, organizations can make informed decisions, allocate resources effectively, and
avoid costly mistakes.
Question 3. List generic strategy process model (four steps)
Four steps:
STEP 1: Strategic analysis
- External Environment: This stage involves assessing the external factors that can impact the
organization's strategy. It includes analyzing the industry, competitors, customers, technology,
economic conditions, political and regulatory factors, and socio-cultural trends.
- Internal Resources: This stage focuses on evaluating the organization's internal strengths and
weaknesses. It includes assessing financial resources, human capital, technology, intellectual
property, and operational capabilities.
STEP 2: Strategic Objectives
- Vision: This defines the long-term desired future state of the organization. It articulates the
organization's aspiration and sets a direction for its growth and development.
- Mission: This outlines the organization's purpose and reason for existence. It clarifies the
organization's core values, beliefs, and the contribution it aims to make.
- Objectives: These are specific, measurable, achievable, relevant, and time-bound (SMART)
goals that support the organization's vision and mission. They provide a clear focus for strategic
initiatives.
STEP 3: Strategic Definition
- Option Generation: This stage involves identifying and exploring various strategic options
that could help the organization achieve its objectives. It includes brainstorming, creativity
techniques, and market research.
- Option Evaluation: This stage involves assessing the potential benefits, risks, and costs
associated with each strategic option. It helps in selecting the most promising options based on
their alignment with the organization's goals and their feasibility.
- Option Selection: This stage involves choosing the most appropriate strategic option based on
the evaluation process. It requires careful consideration of the organization's resources,
capabilities, and external environment.
STEP 4: Strategic Implementation:
- Planning: This stage involves developing detailed plans and strategies to implement the chosen
strategic option. It includes setting timelines, allocating resources, and assigning responsibilities.
- Execution: This stage involves carrying out the strategic plans and initiatives. It requires
effective leadership, teamwork, and resource management.
- Control: This stage involves monitoring progress, evaluating performance, and making
adjustments as needed. It ensures that the strategic initiatives are on track and aligned with the
organization's objectives.
Question 4. Describe links of e-commerce strategy with other strategies in a company (ex.
Link with SCM strategy, marketing strategy…)
Amazon, a global e-commerce giant, provides a prime example of how e-commerce strategy can
be intricately linked with other functional strategies. Let's examine how Amazon's e-commerce
strategy interacts with its supply chain management, marketing, finance, human resources, and
information technology strategies:
a, Supply Chain Management (SCM)
- Fulfillment Centers: Amazon's extensive network of fulfillment centers is a cornerstone of its
e-commerce strategy. These centers are strategically located to minimize delivery times and
optimize inventory management.
- Prime Delivery: Amazon's Prime membership program, which offers fast and free shipping, is
directly tied to its SCM strategy. To meet the expectations of Prime members, Amazon has
invested heavily in efficient logistics and transportation infrastructure.
- Inventory Management: Amazon's advanced inventory management systems use data
analytics to predict demand, optimize stock levels, and minimize inventory costs. This is crucial
for maintaining a vast product catalog while avoiding stockouts.
b, Marketing
- Personalized Recommendations: Amazon's recommendation engine leverages customer data
to suggest products tailored to individual preferences. This personalized marketing approach
drives sales and enhances customer satisfaction.
- Content Marketing: Amazon's content marketing initiatives, such as reviews, product
descriptions, and guides, help customers make informed decisions and build trust in the platform.
- Social Media Marketing: Amazon actively engages with customers on social media platforms
to promote products, address inquiries, and gather feedback. This helps to build brand awareness
and foster a sense of community.
c, Finance
- Payment Processing: Amazon's secure payment infrastructure enables seamless transactions
and protects customer data.
- Financial Forecasting: Amazon's financial team uses data analytics to predict revenue,
expenses, and cash flow, ensuring that the company can allocate resources effectively to support
its e-commerce growth.
- Risk Management: Amazon's finance strategy involves managing risks associated with
currency fluctuations, economic downturns, and cybersecurity threats.
d, Human Resources
- Talent Acquisition: Amazon's HR strategy focuses on attracting and retaining top talent in
areas such as technology, logistics, and customer service. These employees are essential for
driving innovation and delivering exceptional customer experiences.
- Training and Development: Amazon invests in training programs to equip its employees with
the skills needed to thrive in a rapidly evolving e-commerce environment. This includes training
on emerging technologies, data analytics, and customer service.
- Employee Engagement: Amazon's culture of innovation and employee empowerment fosters a
highly engaged workforce. This contributes to the company's success and its ability to meet the
demands of its customers.
e, Information Technology
- E-commerce Platform: Amazon's proprietary e-commerce platform is highly scalable and
customizable, allowing the company to adapt to changing market conditions and customer
preferences.
- Cloud Services: Amazon Web Services (AWS) is a major revenue driver for the company. The
integration of AWS with Amazon's e-commerce operations provides a competitive advantage and
drives efficiency.
- Data Analytics: Amazon's IT team leverages data analytics to optimize website performance,
personalize recommendations, and improve supply chain efficiency.
As illustrated by Amazon, a successful e-commerce strategy requires a holistic approach that
integrates various functional areas. By aligning these strategies, companies can create a powerful
synergy that drives growth, innovation, and customer satisfaction.