ecommerce

Question 1

drawbacks of e-commerce

Answer 1

• expensive setting up site
• difficult to find staff with appropriate internet experience
• high marketing expenses to make sure people visit the site
• risk of fraud
• difficulties handling multiple currencies (eg. sterling, dollar yen)
• server could crash
• poorly designed website could drive customers away
• loss of privacy as online shops collect as much data as possible
• system may not be able to cope with multiple languages
• need for secure transactions
• continuous investment to upgrade ICT

Question 2

describe B2C

Answer 2

all businesses regardless of size can set up a website in order to sell their products and services

products online are often at a lower price to reflect a lower cost of sales

Question 3

customer advantages (B2C)

Answer 3

• choice between products / suppliers of the same product
• more unusual products may be accessible
• people in rural areas exposed to a greater variety of goods
• choose delivery address
• choice of payment options
• exclusive online discounts

Question 4

describe B2B

Answer 4

organisations do business electronically with suppliers

provides opportunity to improve relationships with partners and suppliers with cost savings as a consequence

Question 5

business advantages (B2B)

Answer 5

• can pass on savings to the customer therefore increase competitiveness
• able to reach a wider market of suppliers (global)
• easier to compare suppliers in terms of availability, price, delivery times to get the best deal
• progress of orders can be tracked and monitored
• human error is reduced as orders are received directly into suppliers own ICT systems
• faster processing times means greater numbers of orders can be processed

Question 6

advantages to consumer (C2B)

Answer 6

• consumer can research entire market
• use comparison websites to find the best deal in delivery/availability, lowest cost, matches specifications
• eg buying a mortgage institutions will give quotes then pick the best one

Question 7

advantages of e-commerce for business

Answer 7

• global market opportunities - wider market than competitors
• greater ability to track customer buying patterns
• greater opportunity for teleworking
• no time restrictions (trading 24/7)
• online ordering makes it easier to plan stock levels - reduce need for large storage facilities
• can see what competitors are doing in online shop - minimises impact of competitive advantage
• offering e-commerce when competitors don’t / having good website can attract customers