Technology/FDI(EBE)

Question 1

Discuss the costs and benefits of FDI when invested into their own facilities

Answer 1

Advantages
Can replicate facilities across
the world.
Can instil new culture in a foreign
land.
Disadvantages
Can take considerable time.
-Constructing new facilities
-Recruitment
-training

Can require considerable finance.

Question 2

Discuss the costs and benefits of FDI when a firm buys an existing enterprise

Answer 2

Advantages
Local market conditions are
known right from the start.
Can enter new markets easily
(already established).
Less time consuming.
Potentially more profitable
sooner.

Disadvantages
Must be able to manage
existing culture.

Resistance from existing
workforce.

Question 3

Discuss the impact of e -commerce on the functional area of an organisation

Answer 3

Human Resources
 Can spend less on employees’ wages as many of the tasks (accepting orders,
checking inventory) can be automated.
o Which will reduce the number of workers needed.
 Training costs may be increased as employees need to be trained in new ways of
working.
 Shift workers may have to be employed at unsociable hours as people will be able
to buy goods 24/7 and may need employees available at help desks.
Finance
 No cash transactions – all electronic funds transfer means that money is
immediately received meaning that keeping track of cash flow is more accurate.
 Payments for wages/shop rent and other related expenses are reduced as there
is no need for a physical outlet for customers to visit.
 Investment in a website will increase costs in short term.
Operations
 Computerised inventory system should be used which will make the process of
inventory control more accurate.
o Accept advantages/disadvantages of electronic inventory control (such as
automatic ordering when inventory hits the re-order level).
 Goods for sale do not have to be kept on premises (warehouse) as the
organisation can be a ‘middle-man’ and order goods from their suppliers once an
order has been received from a customer.
o This will reduce inventory costs such as warehousing and security costs.
 Options in delivering product to customer may increase, changing logistics.

Question 4

Evaluate the impact on the customer of recent
technological developments in retailing

Answer 4

One recent technological development has been stores without cashiers, using
apps and chips to track customer purchases. This would benefit the customer
as it minimises social contact which could be considered a social trend of
younger people preferring not to interact. (1)

This could have a negative impact on customers who may enjoy the social aspect
of shopping, putting them off using a specific retailer. (1)

By avoiding checkout queues in a retail outlet this can speed up the shopping
process for the customer making them more satisfied with their experience. (1)

Through the use of apps to track and record purchases customers will have a
greater level of data available to them. This allows them to keep track of their
spending and make adjustments. (1)

More supermarkets are using online/app based shopping than ever before.

Question 5

Explain the benefits of B2C

Answer 5

Choice between products

Choice between suppliers of the same product

More unusual products may be accessible

People in rural areas are exposed to a greater
variety of goods

delivery to an address of your choice

Choice of payment options

exclusive on-line discounts

Question 6

explain the benefits of C2B

Answer 6

The consumer can research the entire market.

Consumers can benefit by being able to use comparison websites
such as “comparethemarket.com” to

find the best deal available in terms of availability, delivery

find the lowest cost

obtain a product or service which matches their exact
specification.

Question 7

Explain the benefits of C2C

Answer 7

The biggest growth in online sales have been consumer to
consumer.

One common example is online auctions, such as eBay, where
an individual can list an item for sale and other individuals
can bid to purchase it.

Auction sites normally charge commission to the sellers
using them.

They act purely as intermediaries who match buyers with
sellers and they have little control over the quality of the
products being offered, although they do try to prevent the
sale of illegal goods, such as pirate CDs or DVDs.