Week four - eBusiness

Week Four Questions - eBusiness

Chapter 3 Questions

1.     The web has grown so dramatically through the rapid advances in today's technology. The web is extremely easy to access and not complicated to use. It is no longer a 'mystery' and people are becoming more and more adventurous. With the development of smartphones, ipads and wireless internet it has become more of an every day tool and is now being incorporated into our every day lives.

2.     

       What is Web 2.0 or 'Live Web' refers to parts of the web which anyone can add to its content e.g. Facebook, Twitter etc. Web 1.0 refers to the parts of the web which can not be added to by anyone. Viewers can only read what has been posted but are not able to add.

3.    Web 2.0 technology can be used within a business to allow customers to post about their experiences, e.g. A hospitality business may allow a site where people can post about their dining experience, the service, the food, the decor etc.. It could also provide up to date product updates and other company news e.g. specials etc.. 

4.    eBusiness defines the transaction of goods and services as well as serving customers and conversing with business partners over the internet i.e. Running a business over the Internet. This differs from eCommerce which purely defines an online monetary transaction in exchange for goods or services. 

5.    Pure eCommerce defines a business whose transactions take place solely over the internet e.g. ITunes, where as Partial eCommerce defines a business where there is a large part of the business transactions which take place offline e.g. Amazon books where the transaction of money is over the internet, then, the book is shipped to the purchaser. This means that the books need to be stored at a specific location and purchased from another company.

6.    List and describe the various eBusiness models? 

•       Merchant Model: Utilises the Internet to enable original retail practices to be transformed into eCommerce practices.
•       Brokerage Model:  Acts as a facilitator bringing together buyers and sellers, earning a profit through taking a commission of the sale.
•       Advertising Model: Sites, which are free to use, earn profit by selling advertising space, e.g. Facebook.
•       Mixed Model: Generates an income from a number of sources e.g. Advertising, Internet subscriptions, profits from taking a commission from sales transactions.

7.     The two major B2B models include Sell-Side B2B and Buy-Side B2B. The model below outlines the differences between these two models..

8.   Two opportunities faced by companies doing business online may include

•      Easily accessible: Business information can be easily accessed. Can also provide customers and clients with around the clock product updates. Can also make available important statistical information to managers in real time.
•      Decreased costs in services and production.

9.   Two challenges faced by companies doing business online may include

• Privacy: Customer information needs to be protected (e.g. Account information) as well as company information and/or assets (e.g. Itunes need to ensure the protection of their stock to ensure the prevention of copying files/receiving goods without proper payment).
• Protection: Customers need to be protected against scams, viruses the purchase of faulty or harmful products and also against false advertising. This may result in a bad company brand reputation and / or the harm to an innocent person followed by legal action.

Week three - Strategic Decision Making

1. TPS or Transaction Processing Systems are systems put in place to manage the daily, fundamental processes of a business.  Some examples may include, but are not limited to: Sales of goods and services, Cash deposits, receipts, payroll.

DSS or Decision Support Systems are the systems within a business which solve more complex problems otherwise known as un structured or semi structured problems such as, preparing an operating budget for the next 5 years or estimating future cash flows from the use of long lived assets.

TPS and DSS both create competitive advantages for a business. The use of computerised systems helps to dramatically reduce human resource costs and allows relevant information to be documented and displayed for both the externally e.g. shareholders – allowing them to see point of sale statements to gain a greater understanding of how well the business is performing financially and internally e.g. Financial department – to help them develop accurate/appropriate financial budgets for the many different sectors within the business.

2. Three quantitative models typically used by Decision Support Systems include;

- Sensitivity analysis: Shows how a change in one part of a graph will impact other parts of a graph

- What if analysis: Checks the impact on a change in an assumption on the solution

- Goal seeking analysis: Finds the input necessary to create outcome.

3. Business processes are the standard set of business activities, which accomplish a specific service or task e.g. processing a customers order. Business processes is important to an organisation as it helps to increase business productivity.

4. Business process improvement is the understanding and measurement of current business processes resulting in the identification of any changes that can be made to ensure the improvement of outputs.

Business process re-engineering is the complete re-design of an organisations business processes, setting new standards for the business.

5. Business Process modeling (or mapping) is the process of adding all business processes into a flow chart to enable complete visualisation, which can help identify problems and/or new opportunities. The use of technology results in many of these processes becoming invisible, so BMI makes it visible again.

A business process model is the standard set of business activities, graphically portrayed in sequential order.

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Week two - Information Systems in Business

1. a) Information Technology is used within Business to help gain, manage, measure and store specific data within an organisation.  It provides Businesses with a clear overview of specific information regarding the business. This information is vital to a businesses success as it is an enabler assisting in the decision making process, allowing accurate and positive decisions to be made helping support the overall stratedgy and future direction of the business.

b) Success is measured by a range of practices.  KPI or Key Performance Indicators are quintifiable measurements which help to determine if a business is meeting their pre-determined goals.  Also Businesses look at their IT systems themselves to determine the efficency and effectiveness of its performance.

Efficency IT Metric looks at the IT system and its performance e.g. the throughput (quality and amount of information), speed, and availability of the information gathered.  Is the Business getting the most up to date accurate information? Benchmark tests are also used to see how each individual computer system is operating (e.g. Response times) and enables its performance to be compared with the other computer systems operating under similar conditions.

Effectiveness IT Metric looks more on the positive or negative impact these systems have on the Business.  It helps to make important decisions and set important goals and then allows organisations to view if their goals are being met.

2. Porter’s Five Forces Model helps a Business to determine the larger, environmental factors which, in time, may influence the Business.  If a Business is able to understand these forces they can develop strategic practices to create opportunities from these changes.

The factors named in Porter’s Five Forces Model include;

-          Buyer Power: Knowing your customer, their needs and wants and working to keep a relationship with them e.g. a rewards program

-          Supplier Power: Know your supplier and maintain a good relationship with them. 

-          Threat of substitute products or services: If a product is common e.g. shoes then the threat of subsitiute products is high. If you do not provide the best service or your pricing is too high then your customer will happily move on the the cheaper pair of shoes next door.

-          Threat of new entrants: Depending on your product or service it may be easier or in other cases harder for competition to arise e.g. the ‘tour guide’ business is easier to break into than setting up a cancer clinic.

-          Rivalry among existing competitors: There is a large amount of competition around.  By finding ways to stand out or be different, seem better you will be able to gain customers.

Below is a diagram of Porter's Five Focus Model

3. Business processes and value chains both help to add and determine the value of a Business.  The Business processes are the sequence of activities which must be undertaken to create or provide the businesses specific product or service.

Value chains are the series of processes where the product passes through each step gaining more and more value as it advances.

4. Porter’s three generic strategies include Cost Leadership, Differentation and Focus.  Cost Leadership is the process of lowering the business costs in order to provide a product or service at a cheaper price e.g. Sourcing cheaper materials to build a quality assured product at a lower production cost the technologies which are implemented within an organisation must support its future goals.

Differentation strategies is the creation of a product which will stand out from the rest e.g. blackberry creating the ‘white’ version of their mobile handhelds.

Focus Strategies concentrates the Marketing of a product to a ‘focus group’ allowing the business to focus directly on the needs of their specific group allowing them to more accurately meet these very specific needs thus creating a much greater relationship with their customers.

Each of these strategies help to create a more profitable and reliable business. 


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