E-Business Exam Issues - Essay Example

Business exam QUESTION A) Illustrate & explain the four value-adding domains identified by the Amit & Zott model, giving examples to support your answer. b) Critically evaluate the role of Porters value chain in underpinning the efficiency sector of the Amit & Zott model, giving applied case study examples to support your argument where appropriate. The Amit and Zott model has underlined the importance of the e business model in the modern business scenario. The model is based on the four value adding domains- “efficiency, complementarities, lock in and novelty.” The four domains have increased the viability of the modern business houses where the operations are influenced by the growth of the technology. The modern business models work on creating values for the customers. This can be expressed under the four domains: Efficiency: With the rise of the Internet, the customers are more aware of the products and the services offered to them. The customers know what the firms are offering to them and thus have better visions to choose from them. The social welfare of the businesses increase and they look to increase the welfare to the customers. There can be price discrimination with the use of the Internet as the customers are aware of the products. The business houses may look to decrease the price of the goods to attract the customers. The e business model of Amazon is based on offering products at lower costs. This helps in the increase of the social welfare. With the rise of the Internet, various other business opportunities are open for the entrepreneurs. Complementarities: The model has described the services as the complementarities. The services of the e business model should be quick and precise. The basic concept is to provide the customer’s with valuable information that helps in the development of the business. Lock in: The lock in period of the business houses is relatively low while using the e business model. The search for customers’ get quicker and the cost is less than that of the traditional process. Therefore, the lock in of the company is automatically reduced. The company may also adopt a model to produce what is demanded. Novelty: In the e business model, there has been a rise in the novelty process with the rise of innovation. The business houses look to attract the customers with the use of innovative techniques. Amazon and Ebay offer discounts and gift vouchers, which encourage the customers to shop online. (Kirikova & Grundspenkis, 2002; Pp 378-379) Porter’s value chain activities describes that a relation exists between the firm’s activities regarding the suppliers and the customers. The value chain activities of a firm can be described as follows: With the advancement of technology and the use of the Internet, the value chain of a company can be related easily. The effectiveness of a company has increased with the use of the Internet. All the components in the value chain have been benefited by the use of the Internet. The inbound logistics related to the relation with the customers. With the use of the Internet, business can now choose from a wide variety of customers as they get more information. The operations in the business have been developed by the use of the Internet. The quality checks can be done more effectively which results in the development of the products. The outbound logistics relates to the distribution of the goods and Internet again helps in the process by providing the information about the distributors. The marketing and the sales process is helped by the use of the Internet as more and more people are using the Internet today. The business houses take the advantage by making advertisements in the Internet. In the case of the after sales service, the customers take the advantage of the Internet by providing information to the companies about the problems. The use of the Internet has increased the efficiency of the organizations. The business looks to improve the benefit of the customers and increase the social welfare the ease of the information has led to the increase of efficiency of the business houses. Customer welfare is the main aim now for the companies in the modern environment. (Porter’s value chain, n.d.) QUESTION 2 A) Explain the function of Enterprise Resource Planning (ERP) within e-business Strategies. B) Critically evaluate the role of Balanced Scorecards for the effective achievement of ERP objectives. The use of the technology and the Internet has transformed the business world. The Enterprise Resource Planning (ERP) is a system that combines all the activities of the firm like the inbound logistics of the firm, the human resource, finance, marketing etc. All these activities are connected with the help of software and the system evaluates the operations of the departments. The centralized system helps the organizations to evaluate the operations of the different departments. The system of ERP is inbound and is available to all the components of the business. This helps the components to keep a track of the changes in the business. The information can be send to the different systems resulting in the saving of time and money. The ERP also helps in the outbound activities of the firm. The marketing and the logistics of the firms can benefit from the system. For the marketing activities, the information of the research department is taken care of by the marketing department. The purchase department gets the full details of the requirement of the organization. This helps in the appropriateness of the information and helps the business to attain the efficiency. In the case of the e business model, the ERP has a big role to play. As the Internet and software based programs performs most of the activities of the business, it is useful to have the proper information from the other departments. ERP helps in the communication process with quick transfer of information. (Significance of ERP implementation, n.d.) Balanced Scorecard helps in the evaluation of the performances of the various departments in the organization like the Finance, HR, operations, marketing etc. The performances of all the departments are evaluated in various spheres. The objectives of the department and the initiatives for the fulfilling the objectives are noted. The targets of the departments provided by the management are noted also. After noting all the fields, the performance of the various departments is evaluated. The underlying factor of the balanced scorecards is the vision and mission of the companies. The functions of the departments are in confluence with the vision and the mission of the company and the activities pertaining to them are evaluated. It is natural that the department fulfilling the objectives set up by the vision and mission will rate higher. For example, in the case of the marketing department of Walmart, the main aim is to increase the sales. In this way, the functions of all the departments and that of the company on the whole can be evaluated. This helps in bettering the performance of the company, as the management knows which areas have to be improved. In the case of the ERP, the objective is to increase the business efficiency. With the help of the Balanced Score Card, the business finds out how the departments perform in achieving the efficiency of the functions. The ERP helps in the ease of the information between the different departments. Using the Balanced Score Card, it can be seen how the departments can be fared. One of the most important steps in the ERP is the evaluation process and the Balanced Score Card helps in the accomplishment of the objectives. (What is the balanced scorecard, n.d.) QUESTION 3 A) Briefly explain why many businesses choose not to become e-business enabled. B) Critically evaluate any two reasons from your answer to part a) using a case study examples to support your arguments as appropriate. The use of the Internet and the e business model has been visible in all components of the business world. Today, most of the business organizations use the e business model as a huge number of customers can be reached at a time. Though the upfront costs in this kind of a business model are higher with the use of the sophisticated technology, the maintenance costs are low. The evaluation of the business can be done very easily with the help of the e business model. The customers can get all information on the Internet and the business organizations can have an idea of the market. This helps the business organizations to get better deals in the market in the case of suppliers. The customer service is improved as the business can interact with the customers more easily. In a way, the benefits of the customers are increased and this helps in the performance of the businesses. With the rise in the benefits, the customers prefer the goods and services of the businesses. This helps in increasing the turnover of the business. In the modern world, most of the businesses have begun using the e business model to some extent. Every business uses the e business model in some part or the other. There are some companies that have integrated the e business model fully like the Amazon and the Ebay. Some business organizations use the “brick and mortar” model. In this model the activities of the firms are based on the use of the online and the offline models. This is the model used by most of the firms nowadays. In the case of the huge logistics chain of the some organizations, it has not been possible to integrate the whole process in the e business model. In some cases, the customers need to have the visibility of the product before they can buy it. This has meant that the companies should have a substantial presence. In the e business model there is a case of trust. Customers feel that the e business models are not trustworthy and are apprehensive of doing business with them. They feel that the organizations can liquidate any time. This has made it essential for the organizations to operate in the traditional model, at least to some extent. (What is a brick and mortar business, n.d.) The “brick and mortar” model is viewed in the case of the retailers. Wal-Mart is one of the prime retailers of the world. It has presence all over the world with thousands of stores. It is one of the biggest organizations of the world and offers the customers products at a cheap price. The company could have shifted to the e business mode given its reputation and stature. However, in the case of the e business models, the company would not have got the visibility it presently attains. The customers are still apprehensive of shopping online. The rise of the scams in the payment processes has further reduced the likeliness of the customers. Moreover, in the retail outlets the customers can have a look at the required goods. This helps in the huge turnover the company attains all the year round. The company also has a website and the online shopping system. However, it has continued with the process of the physical presence of the stores. This helps in building a bond of trust and visibility with the customers. (Wal Mart Corporate, n.d.) QUESTION 4 A) Explain why an e-business organization might be better placed to outsource elements of their business activities than a conventional business. b) Critically analyze the arguments against outsourcing as an ERP strategy. The business organizations using the e business model have been outsourcing most of their works to the companies in the other countries. This has been an increasing trend in the recent years. The e business models use the technology to function most of the business processes. Most of the business activities are performed on line. Therefore, the company supplies part of their operations to the other companies. The outsourced companies provide the expertise to work on the project. It gives the parent company the option to perform the required functions at a much lower cost. It has to be noted here that most of the outsourcing is done to the developing countries where the cost of the labor is lesser than that of the developed countries. The outsourcing firm can have a contract defining a specific time period and the amount of activity to be done. This helps the companies to reduce the risks associated with the performance of the functions by the in house labors. In the case of the e business firms, the outsourcing will mean a transfer of various programs or software that helps in the operations. As the business is done through the online activities the transfer of the programs and the software is not a problem. The expertise of the knowledge on the outsourced firm helps in the completion of the functions. The knowledge of the technology is practically uniform all over the world. Therefore, it is not a problem for the companies to perform the operations. However, in the case of the conventional business model, outsourcing will mean that production or the sales process have to be outsourced. This would be problematic given the techniques of the production and the availability of the customers. The outsourced firm may not have the expertise to perform the functions. For example, in the case of Champagne, the production process cannot be transferred to Nigeria. The labor and the climate may not be suitable for the production. This will have an consequence with respect to the sales of the products. Therefore, it is easier for the e business firms to outsource than the traditional business models. In the case of the outsourcing, there are certain drawbacks even for the e business models. The ERP underlines the effectiveness and the communication process of the departments of the firm. Outsourcing will have a department in another company or in another country. This will deter the communication process of the firm. On the question of effectiveness, there may be problems in implementing the required expertise in the field. Though the outsourced firm may have the required expertise in terms of knowledge in implementing the functions, the level of implementation may vary from the parent company. The outsourcing of the e business firms requires the transfer of technologies like various programs and software to the other firms. This can have a deteriorating effect on the company as the outsourced firm can use technology for other purposes. This decreases the effectiveness of the firms in the operations. This is why companies take into account the detailed analysis of the firms where the activities are to be outsourced. Outsourcing major portion of the operations of the company may leave the company into the mercy of the vendors. Over dependency on the outsourced firms may be deteriorating to the effectiveness of the company. (Arabe, 26th March 2001) QUESTION 5 A) Briefly explain the main reasons for the development of customer relationship management (CRM) software in e-business. B) Critically evaluate the limitations of CRM systems within e-business giving examples where appropriate. One of the major factors of the development of the business organizations in the modern world has been the rise of the customer welfare. The subject of customer welfare has gained importance with the rise of the customer relationship management (CRM). CRM has been an integral part of the e business models. It has given rise to the e-CRM process. The e-CRM process integrates the suppliers of the companies and the customers. With the development of the Internet, the scope of marketing of the companies increased providing a reach to a wide range of customers. The customers can now make queries and can interact with the company for the buying or the selling of the products. The traditional CRM practices involved interaction with the customers with the help of the call centers. The process was lengthy and time consuming. The customers would get agitated with the refusal of their calls. With the rise of the e-CRM process, the companies can now directly link to the customers. One of the greatest benefits of the e-CRM process has been transparency where the customers can have a view of the prices and the specifications of the products from the various companies before being able to decide. This was not possible earlier. The client service has significantly improved with the development of the e-CRM model as the customers are attended to quickly. The e-CRM process has been helpful in the development of the marketing activities as it can provide a detailed view of the customers. The analysis of the customer’s preference can be made with the help of the e-CRM process. This has been helpful; for the preparation of the policies of the firms for the development of the business functions. In the case of the inbound logistics of the firms, the e-CRM keeps track of the records of the vendors and helps the management to compare them with the market. (E business basics: from customer relationship management to e-manufacturing, n.d.) The e-CRM model has been very useful for the business organizations all over the world. However, there are certain limitations to the process that have to kept in mind in implementing the e-CRM model in the company. The e-CRM process is new to the business world and the organizations have not been used to the implementation of the process. The main problem for the e-CRM model is the implementation. The e-CRM model is the confluence of man and technology. As there is a confluence, there is a resistance from the human element of the companies. This happens because the implementation of the e-CRM decreases the importance of the human element in the business. Moreover, the usage of the new model can be problematic for the human elements if not proper training is provided. The e-CRM model also integrates with the existing systems of the company like the ERP. This leads to the confusion of the employees in the organization. The organization may not be flexible enough for the integration of the process. In the case of the new model, the a range of departments like the marketing, operations and the logistics are integrated that can add up to the confusion of the employees. The e-CRM model is the integration of all the departments of the organization and this can lead to problems during the implementation. Moreover, in the case of the e-CRM model, the set up cost is higher which can pressurize the financials of the company. (Fjermestad & Romano, 2006; Pp 11-13) References: 1. What is the balanced scorecard? (n.d.). Balanced Score Card Institute. Available at: http://www.balancedscorecard.org/bscresources/aboutthebalancedscorecard/tabid/55/default.aspx (Accessed on 17th May, 2010) 2. Significance of ERP implementation. (n.d.). ERP Wire.com. Available at: http://www.erpwire.com/ (Accessed on 17th May, 2010) 3. Fjermestad, J and Romano, N. (2006). Electronic customer relationship management. Sharpe. 4. E business basics: from customer relationship management to e-manufacturing. (n.d.). Chapter 3. Available at: http://www.isa.org/Content/ContentGroups/Links/B/EBUS-Chap3.pdf (Accessed on 17th May, 2010) 5. Arabe,K. (26th March, 2001). E commerce outsourcing: big advantages for smaller businesses. Thomas net. News. Available at: http://news.thomasnet.com/IMT/archives/2001/03/ecommerce_outso.html (Accessed on 17th May, 2010) 6. Wal-Mart Corporate. (n.d.). About Us. Available at: http://walmartstores.com/AboutUs/ (Accessed on 17th May, 2010) 7. What is a brick and mortar business. (n.d.). Wise Geek. Available at: http://www.wisegeek.com/what-is-a-brick-and-mortar-business.htm (Accessed on 17th May, 2010) 8. Kirikova, M and Grundspenkis, J. (2002). Information systems development. Kluwer academic. 9. Porter’s value chain. (n.d.). Institute for manufacturing. Available at: http://www.ifm.eng.cam.ac.uk/dstools/paradigm/valuch.html (Accessed on 17th may, 2010) Read More