The Difference Between Exchange and Industry Consortia - Essay Example

?Midterm Examination MCQs and True/ False Question No Answer b 2 d 3 b 4 d 5 a 6 c 7 b 8 a 9 d 10 c 11 d 12 d 13 a 14 d 15 b 16 c 17 a 18 d 19 b 20c 21 a 22 b 23 c 24 d 25 c 26 d 27 c 28 a 29 c 30 d 31 False 32 False 33 True 34 True 35 False 36 False 37 True 38 True 39 False 40 False 41 False 42 False 43 True 44 True 45 False 46 True 47 True 48 True 49 False 50 False 51 True 52 False 53 False 54 True 55 True 56 True 57 True 58 True 59 True 60 True 61 True 62 True 63 True 64 True 65 True 66 False 67 False 68 False 69 True 70 True Q 71 Explain the difference between exchange and industry consortia. Ans An electronic exchange is a marketplace where services and goods are traded over internet. These exchanges encompass global trade, operate throughout the day and tend to join the sellers and buyers in B2B business. These exchanges provide a vibrant opportunity for the suppliers and customers to interact through automated business solution efficiently and explore new market places around the world with minimal of cost. Many giant businesses are using e-marketing for quite sometimes now and many have been programmed with other automated businesses since 1990s. For example, at GE’s Aircraft division, the customer could order an aircraft part, get invoice and initiate delivery all within 45 minutes. However, such sophisticated systems require dedicated communication lines and expensive hardware. These costs have been cut to a great extent with the invention of internet. Generally, B2B exchanges can be sub-divided into three main categories. Consortia are primarily a collaboration of vendors dealing with a particular industry e.g. the consortium of Global Food Exchange. Private Marketplaces on the other hand are run by a single organization and is aided by its key suppliers. Wallmart and Dell are examples of Private Marketplace. The third category of exchanges is Public exchanges which are typically controlled by a third party and interact with all companies which follow the exchange defined standards. Another manner which exchanges can be classified by the industry that they deal in. Vertical exchanges are those which deal with a particular industry and Horizontal Exchanges are those which deal a broad category of industries. On the other hand, industry consortium is typically a Vertical market owned by the industry which allows buyers to procure services and goods from restricted participants. The aim of the industry consortium is to generate steady association with the industry with a view to establish a long term affiliation through contractual procurement. These industry consortium tend to bring together all the supply chains within the industry which in-turn bringing the profits back to the industry. The industry consortia provides a number of facilities e.g. systematic procurement process, auctions, pricing and RFQs mechanisms for profitability of the industry. Q 72 What is channel conflict? Give an example of how channel conflict can be avoided or lessened. Ans Channel conflict is a term used to describe the expulsion of channel partners e.g. suppliers or distributors from supply chain by a company to reach out for the customer directly. This may be achieved through the use of internet via e-commerce or through general marketing. E-commerce provides a simple and economic solution for the businesses to directly contact their consumers and sell their brands without intermediaries. However, this simple solution also brings with it a great challenge. The customers can also interact with one another through internet and exchange ideas regarding product quality and price. This scenario forces the companies to fix a competitive price of the product or service without compromising on the quality. Over production by a company can also result in channel conflict. Similarly, newer editions of the products in the market, trend changes and wholesalers insolvency also cause channel conflict. Therefore, the stock clearance strategy of a company is of utmost importance for avoidance of channel conflict. There are many forms of channel conflict. Some are mild in nature to an extent that they are primarily a result of business competitiveness. Some channel conflicts actually phase-out the uneconomical economic players from the market and therefore play a positive role for the manufacturer. Others are high risks for the manufacturers as they occur when a manufacturer targets a market segment already being served by another manufacturer. This results in bad channel economics and disintermediation. Probably the best way to prevent or lessen channel conflict is to let the distributers and dealers decide the best pricing. As these intermediaries cannot compete with the lack of overhead of e-commerce, the businesses can let them decide their price which can be recovered by increased margin through online sales. Another way to reduce channel conflict is to promote the dealers on the e-commerce site. Many customers still want to see the product before buying who can be helped by the manufacturers by directing them to the dealers nearest to their location. Q 73. What is the purpose of Supply Chain Management Software? Give examples of the major infrastructure elements and tools of e-supply chain management tools and infrastructure. Ans. Supply Chain Management Software (SCMS) is a pack of software applications and tools which are utilized to carry out the supply chain functions. This software mainly helps in executing functions e.g. value chain transactions, controlling business processes and managing supplier interactions. Although Supply Chain Management Software vary tremendously in terms of functionality and operations, the main applications and tools of this software are Supply Chain Planning, Demand Planning, Supplier Management, Procurement and Order Fulfillment. The most important functionality of Supply Chain Management Software is the improvement it brings in the operations of business. Moreover, this software also reduces labor costs and wastages. In fact many software have inbuilt intelligence features which identify the wastages and cost wastes in the supply chain and eliminate them automatically. Supply Chain Planning application of the software identifies customer trends and demands through comparison with historical data and adjust the production cycle accordingly. Future inventory requirements of the company are also determined through this software application. Demand Planning application enables a company to forecast demands through analysis of historical data in real time. Users are able to view demands of certain products through application of various filters and simulations to ascertain projected demands. The buyers or the manufacturers can analyze the performance of the suppliers through supplier management application. The financial aspect of customer and supplier relationship is maintained by Procurement application of SCMS. Purchase orders and procurement terms are distributed via this application. Order Fulfillment application of Supply Chain Management Software enables a drastic decrease in lead times of orders for production which ultimately results in smooth operations from forwarding a quotation till receipt of cash. Q 74. Explain importance of customer loyalty and explain ways to increase e-loyalty. Ans. Customer loyalty has become a focus of most of the business involved in e-commerce. Many studies have shown that retention of an existing customer base is much cheaper and profitable than acquiring new customers. The loyalty programs introduced by many companies definitely provide a cost effective way of retaining loyal customers than targeting a new market segment. A loyal customer base is always profitable for the organization due to their frequent visits and increase in business transactions. Customer loyalty is also important for a business because it provides immunity from price competition. Through the use of internet, customers tend to do price comparison of each and every commodity they come across online. However, loyal customer base is less likely to be enticed by a few extra dollars because they enjoy a certain degree of trust and security with the organization they are loyal to. E-loyalty can be increased by online organizations in a number of ways. First and foremost way to increase customer e-loyalty is enhancing the ability of e-retailer to customize the services or the products according to the needs and interests of the customers. Customization raises the likelihood for the customer to find the exact thing he is looking for which in turn produces a satisfied customer. Interactive communication through websites is another method to increase e-loyalty. By providing interactive links on the website and complete product detail available for the customer, it is much more likely for the customer to re-visit the site. Another effective manner to increase e-loyalty is to provide an online discussion forum for the customers who can discuss various features and anticipated problems of the product or service with other customers. Q75. Compare the following market strategies; traditional (mass) marketing, direct marketing and one-to-one marketing. Ans Traditional or Mass marketing refers to a marketing strategy employed by businesses to target the whole market with one propose while ignoring the market segmentation and differences in customer interests. The basic theme behind mass marketing is to target a large population of customers irrespective of demographics and interests. Mass marketing is carried out with the help of advertising on television, radio and other print media so that maximum populace is exposed to the information. Direct marketing refers to a structural framework of advertising which enables businesses and other non-profit organizations to interact directly with the customers through e-mails, cell phone contacts, text messaging, banners, online ads, promotion letters, customized advertisements in newspapers and journals and targeted sponsors ads on televisions. This type of marketing is also referred to as Direct Response Advertising. The messages generated as a result of this marketing strategy are directly addressed to the customers or prospective customers. This marketing strategy often prompts the customers to call a toll free number or click on particular web banner to access the product or service. Personalized marketing, also referred to as one-to-one marketing is an intense product differentiation form. Through the use of this marketing strategy, the businesses try to personalize the product for each customer’s individual need along with making the product unique with product differentiating methodology. One-to-one marketing has found most of its application on the internet whereby, companies tend to track online behavior of the customer and try to suggest websites and products of interest to every customer. Q 76. Explain the role of ERP systems in the context of e-commerce. Ans Enterprise resource planning (ERP) refers to an information system which is formulated to coordinate and control the resources, activities and information of an organization which is required to accomplish a business process. ERP is generally an element of Supply Chain Management Software implemented by the organization. A single database which is used by the organization to fulfill the needs of Supply Chain Management, procurement, production CRM auditing and manufacturing is usually supported by Enterprise Resource Planning. The basic function of ERP is to follow the business resources of an organization. These resources include production capacity, cash and raw materials. Moreover, ERP also records and tracks the business commitment status including purchase order, other orders and payroll. ERP also enables sharing of data among the various departments of an organization e.g. production, technical accounting and sales. Another major function of ERP is to manage connection of the stakeholders of the company with the outside agencies and other businesses while facilitating information amongst the business functions. Businesses across the globe consider ERP as an essential component for business development as it is vital for seamless integration of various systems of organization and enables accurate production and transactions. However, the development of ERP system is much different from traditional system development as ERP operates on various hardware and communication systems and usually utilizes a single database to perform its functions. Although ERP tends to integrate various business functions of an organization, practically speaking, ERP consists of various discrete modules which maintain a discrete set of data which can be fuse or exploited as required by the user. Final Examination MCQs and True/ False Question No Answer 1 d 2 c 3 b 4 b 5 a 6 a 7 c 8 b 9 c 10 c 11 c 12 a 13 d 14 c 15 a 16 a 17 b 18 b 19 d 20 c 21 d 22 d 23 a 24 a 25 c 26 d 27 d 28 b 29 d 30 d 31 True 32 True 33 False 34 True 35 True 36 True 37 True 38 True 39 True 40 True 41 False 42 False 43 False 44 True 45 True 46 False 47 True 48 True 49 True 50 True 51 False 52 False 53 True 54 False 55 False 56 False 57 False 58 True 59 True 60 True 61 True 62 False 63 False 64 True 65 True 66 True 67 True 68 False 69 False 70 False Q71. Discuss how Firewalls and Virtual Private Networks could be used to limit the likelihood of an attack. Ans. A firewall acts as a protection system which enables security of a protected system or a network e.g the private network of a business firm. The main idea of a firewall is to protect the private network from illegal access through public network such as internet. Therefore, firewall is typically placed at every access point of the private network so that every network access request from private domain passes through the firewall after authentication. This mechanism thus abolishes the requirement of security protection of individual servers and hosts in the private network. Effective firewalls are always governed by the company’s security policies. These policies are in fact an explanation of the machines that require protection and provide authorization for their use. These policies also spell out the actions which would be initiated in case the policies are violated. The policy defines the rules which would be applied to the arriving packets. For example, these rules would define which addresses are to be avoided for access to the private network and what addresses within the network can be reached out from outside. A Virtual Private Network (VPN) employs many security mechanisms and techniques e.g. data encryption to avert unauthorized access of data and to ensure that data is not corrupted or modified while it passes through internet. For this purpose, VPN employs tunneling mechanism for data flow through which protocols are encapsulated into one another. For data flow through internet, protocols e.g. AppleTalk and IPX are encrypted and subsequently encapsulated on IP. In case of VPN, data packet is encrypted and enclosed in an IP envelope thus disguising the network protocol layer. This IP envelop is then transported over internet and at the decrypted at the receiving end after removal of envelop. This forms a virtual private tunnel for data transfer in a secure mode. Q 72. Compare three major payment cards (credit card, debit card and charge card) Ans A credit card is a kind of plastic money which is used to make purchases through credit or loan. Credit cards are always associated with a financial institution which extends a loan every time the consumer or the owner of credit card uses it to make purchases. The loan is then paid to the financial institution usually on monthly basis and interests are usually levied on the nonpayment of funds. Credit cards are comparatively more secure as they are protected against fraudulent procurements if the fraud is reported in a timely manner. On the other hand, a debit card is a form of plastic money which a person spends through his own bank account balance. When a consumer or the owner of the card makes a purchase through debit card, he is in fact spending the money which he already has accumulated in his bank account. It is like a prepaid card which is linked with the financial institution. The risk from purchasing through debit card is more as compared to credit card as the debit card does not usually require a pin code for transactions and fraudulent purchases are difficult to settle. However, it has an advantage that as the consumer is spending what he has already earned, he does not have to face heavy debts as in credit cards. Charge cards are sometimes used interchangeably for credit cards however, they are slightly different. Mostly, all charge cards are credit cards but inverse of same is not always true. Unlike credit cards, charge card holders are bound to pay the full amount spent in a month at the time of billing and a consumer cannot carry the billed amount to the next month. Therefore, no interest is associated with charge card. Q 73. Describe pervasive computing and list its principles. Ans Pervasive computing or ubiquitous computing refers to an idea that everyday objects and things e.g. clothes, tables, chairs and coffee mugs and even human beings are fitted with microprocessor chips so that they give out information. The words ubiquitous and Pervasive were aptly chosen for the notion because they simply refer to “existing everywhere”. The devices used for pervasive computing are constantly available and always connected to the host of networks of other devices through wireless technologies, Internet and other advanced communication protocols. The basic aim of the pervasive computing researchers is to develop objects which converse inconspicuously and are always connected to internet which can be used to collect data. The basic principles of pervasive computing are: 1. Decentralization which says that all data is generated by unintelligent devices which are connected to open community dynamic networks. 2. Diversification which says that these small unintelligent devices supply one of very few information. 3. Connectivity which depicts that dumb devices can communicate and produce valuable information provided they are connected through underlying structure e.g. internet. 4. Simplicity which states that the structure should not be restricted and open to all users. Q 74. Define CAN-SPAM law. What are the main provisions of the law and penalties for violations? Ans Email marketing is a common method to sell products however, it is also the fastest method which can irritate the consumers. Commercial emails have been legalized through CAN-SPAM law which was signed by United States legislation in 2003 and is also known as Controlling the Assault of Non-Solicited Pornography And Marketing Act of 2003. According to the provisions of this act, commercial emails can only be sent to people who want it. This implies that emails should only be sent to people who have either subscribed for it, given verbal consent or were recent customers. However, emails should never be sent to the people or organizations which have unsubscribed from the list. This entails that each commercial email sent to individuals must have provision to “unsubscribe” from the mailing list. This also means that once the consumer has forwarded an unsubscribe request, he is not to be bothered again with the same email. The legislation also bounds the email marketing sending companies to put their valid postal address on the email being sent to the consumers. Another restriction of this law is that companies are not allowed to sell or buy email lists for the purpose of email marketing. According to this law, companies can only email to their customers or potential customers who have shown interest in their products and services. Violation of CAN-SPAM law can result into financial penalties and imprisonment. If convicted for law breaking, a business can be fined as high as $300 per SPAM email and can also result in imprisonment. At times both financial penalties and imprisonment can be awarded according to the nature of crime or violation. Q75. Describe biometric devices and explain how they can be used to improve e-commerce security. Ans Biometrics is a cutting edge technology which can be used to identify people through the unique characteristics which every human being possesses. Examples of biometric technology usage include iris scan, fingerprint scan and voice recognition. Biometric devices are tools which enable the use of biometric technology for identification of individuals. These devices capture the biometric information e.g. finger print scan and process it to match the scanned image with the one in its database to authenticate identification. Similarly, voice recognition systems work on the principle of identifying voice pattern or voice print. The reader captures the voice pattern, speaking style and acoustics of the speaker and matches it to the one already saved in its memory. Ambient noise and changes in voice due to aging or illness is required to be addressed in this type of technology use. Another method of biometric identification is through iris recognition. Such devices scan the iris; a colored area around the pupil which is considered to be unique. These biometric devices are normally utilized at government buildings, airports and law enforcement offices. However, the use of these devices is on the increase in e-commerce as well. Typically, internet transactions are carried out through PIN identification or smart card usage. However, both these systems are prone to be hacked and not unique in nature. The results are catastrophic if someone gets hold of someone else’s social security card and assumes the stolen identity. This scenario can be averted by use of biometric technologies which would force the user to identify either his finger prints or voice to the financial institution before a transaction over internet. Moreover, financial institutions can also use biometric devices to identify the individual who has actually electronically signed a document. Q76. Explain domain name issues and propose some solutions to solve them. Ans. An easily remembered or identifiable website name is usually referred to as domain name. The typical examples of easily remembered domain names are google.com, yahoo.com and hotmail.com. These domain names are considered user-friendly and are helpful in human-machine interactions through internet. As these domain names can be identified and remembered easily, they have typically become the identifiers of specific business organizations. These domain names have grasped such importance that they have even become trademarks for some companies such as amazon.com. Moreover, company utilizes their brand names to attract potential customers through domain names e.g. sony.com. Due to this potential market value of domain names, various disputes arise mainly through the application of cybersquatting. This practice employs a third party which registers the trademarks of companies preemptively as domain names. Usually, the domain name registration is done on first come basis at a nominal which is exploited by cybersquatters. These individuals or groups register hundreds of trademarks as domain names of famous businesses, celebrities and other famous people which they have no connection with. Subsequent to registration, these companies sell the domain names to other aspirants or to the people involved. Moreover, cybersquatters also keep these lucrative domain names to attract business for their own benefit. In order resolve the issues pertaining to domain names, it is wise not to use the trademark of a company or an individual in the first place. This would avoid all the legal problems that follow when an individual or a company registers the trademark of another company as domain name. Additionally, the domain names which include names of celebrities, the trade names of other organizations, generic names used by medicine companies for drugs, names and references of international organizations and geographical locations should be avoided as far as possible. Read More