1.Describe three factors that would cause a company to continue doing business in traditional ways and avoid electronic commerce.
Traditional commerce is a better way to sell the items or services when personal selling skills are a factor, as in commercial real estate sales; or when the condition of the products is difficult to determine without making a personal inspection, as in the purchases of high-fashion clothing, antiques, or perishable food products.
2.How might a manager use SWOT analysis to identify new applications for electronic commerce in their strategic business units?
In SWOT analysis you list strengths and weaknesses of the business unit and then identify opportunities presented by the markets of the business unit and threats posed by the competitors of the business unit. This is accomplished by analyzing all the business operations into value adding activities and supporting activities.
3.Write a paragraph in which you describe the conditions under which a Web site can hope to become profitable if it relies exclusively on advertising revenue. In a second paragraph, provide an example of a company not mentioned in the chapter that is using the advertising-supported model and that is likely to be successful in the long run. Explain why you think it will succeed.
A Web site that relies exclusively on advertising revenues must contend with two major problems. First, no consensus has emerged on how to measure and charge for site views and the second problem is that very few Web sites have sufficient numbers of visitors to interest large advertisers. To be successful using the advertising-supported revenue model exclusively, a Web site must be large search engine, because they generate sufficient traffic to be profitable. Another alternative is to become a site that targets niche markets, for example employment-advertising sites.
4.In two paragraphs, explain why a customer-centric Web site design is so important, yet is so difficult to accomplish.
An important part of a successful electronic business operation is a Web site that meets the needs of potential customers. It is a significant challenge however, to design an effective website that introduces the company to different audiences (shareholders, the financial community, suppliers, potential alliance partners, potential customers, current customers and so on) with very different interests.