SET-I
ANS.1.
Winston, Choi, and Stahl (1997) say that e-commerce is the use of electronics and technology
to buy, sell, transfer, or trade goods, services, or information. It shows how traditional
commerce has changed in the digital age, with business deals happening online through
computer-mediated networks like the internet. E-commerce is more than just shopping
online. It also includes the exchange of business information without paper through email,
Electronic Data Interchange (EDI), electronic fund transfers, and electronic bulletin boards.
This digital framework makes it easy to move money, rights to goods, or access to services
from one person or group to another. This changes how people and businesses interact in the
marketplace.
Features Of e-commerce
1. Existence in a Virtual Environment: E-commerce operates in a virtual marketplace,
whereas a traditional "bricks and mortar" store is based on a physical structure (a
brick and mortar) and requires a significant investment in a physical structure or
building (the actual building) to set up the store or sell products. With e-commerce,
creating an online store or platform is much easier and less expensive than
establishing a traditional store with a physical presence, allowing companies to create
an online presence without being limited to a physical location.
2. Open 24/7: The e-commerce platform is open for transactions 24 hours a day, 7 days
a week. This allows customers to log in and buy from you at any time that is
convenient for them rather than being restricted to a physical store's hours of
operation (because a physical store typically has a limited number of operational
hours on any given day). By being able to transact with customers when it’s
convenient for them, e-commerce will enhance customer reach and sales
opportunities.
3. Eliminating the Need to Travel: E-commerce has drastically reduced the time spent
on commercial activities. In the past, consumers had to travel (drive or take a bus) to
visit different physical stores to search for or select items they would like to purchase.
With e-commerce, consumers can browse products online and complete an entire
purchase transaction (from selecting a product to paying for it) in a matter of seconds
by simply clicking a button; this significantly increases efficiency in commerce.
4. Affordability for Consumers: Shopping via e-commerce is more economically
viable for consumers by saving them the money, time and effort that they would
normally have to expend when shopping offline. For example, consumers will have to
spend less on transportation costs and time that would typically be spent waiting in
line. Because of the affordability and convenience of e-commerce, consumers are
more likely to shop online.
5. Convenience for Sellers: E-commerce provides sellers with affordable advertising
and promotion avenues. Most products listed for sale in an e-marketplace can be
marketed for a fraction of the cost of using other traditional methods because of the
decreased amount of time, cost and physical resources used to market the products.
This allows sellers, especially small and medium-sized businesses, to market to
consumers around the globe without having to make a large investment.
ANS.2.
Various Activities of E-commerce
1. Buying & Selling of Goods & Services: This would entail e-commerce transactions
such as B2C, B2B, and C2C buying/selling of goods & services through online
shopping malls, businesses, and auction-classified websites.
2. Digital Content Distribution: This refers to the online distribution of digital product
offerings, which include songs, software, e-books, and information services.
3. Financial Transactions and Trades: E-commerce provides support for electronic fund
transfer, stock trading, and electronic payment instruments for example, e-cash, e-
cheques, and electronic invoices.
4. Online Procurement & Auctions: This covers business-to-business procurement of
components & materials, online auctions, & online procurement processes undertaken
by governments (G2C).
5. Supply Chain and Business Collaboration: Activities such as collaborative design,
engineering, manufacturing, and online sourcing include more than one partner
working electronically.
6. Administrative And Support Services: E-commerce platforms enable the automation
of various business processes such as preparing purchase orders and financial reports,
handling customer service, and configuring logistics through electronic bills of lading.
7. Government Services - Citizen Services/Citizen-Centric Services: Governments are
utilizing e-commerce platforms to deliver various citizen-related services using the
G2C model. Examples of such services are the registration of certificates (birth and
marriage) and the auctioning of assets.
Distinction between E-business and E-commerce
E-commerce is a subset of e-business. It is specifically defined as "internet commerce" that
comprises the buying and selling of goods and services or sending money or data online. Its
primary focus is on external commercial transactions with customers, suppliers, or partners
(e.g., B2B, B2C, C2C). The defining characteristic is that the trader and customer do not
meet physically, conducting business remotely. Examples include online retail, auctions, and
electronic payments.
E-business is a broader, more comprehensive term. It refers to the conduct of online business
processes on the Internet, extranet, or both. While it encompasses e-commerce activities, it
also includes a wide range of internal, customer-focused, and management-focused company
activities. These are processes that may not directly involve a financial transaction. Key
aspects of e-business include:
• Internal Processes: Using intranets for employee self-service (B2E), training,
onboarding, and sharing information within the organization.
• Collaboration: Working with partners over extranets, collaborating on research, and
managing integrated supply chains.
• Business Management: Automating employee services, processing payments
internally, managing production, and hiring staff.
In conclusion, e-business entails the digital transformation of all business processes,
including internal operations and external transactions, while e-commerce is mainly focused
on external commercial transactions (the exchange of value). E-business encompasses much
more than just online purchases and sales, but all e-commerce is a part of it.
SET-II
ANS.3.
The World Wide Web's second generation, Web 2.0, has greatly changed the way people use
the Internet by creating a platform that allows individuals to not only view but also actively
participate, share information and create new types of content. Unlike Web 1.0's primarily
static HTML documents that could only be viewed, Web 2.0 provides for an ongoing
interchange of ideas, thoughts and materials between users that is based on the principles of
collaboration, co-creation and user participation. A more social and organized way for people
to communicate is made possible through the collaborative abilities of web users in real time
(e.g., co-editing the same document, blogging, vlogging, etc.), commentary, sharing of
opinions and creative expressions, and increased opportunity for users to express themselves
as part of an online community. Examples of some of the technology/tools which are
examples of Web 2.0 include blogs, wikis, user-generated content sites/service and many
other types of web-based user-generated content services.
Seven Layers of OSI Model
1. The Physical Layer (Layer 1) consists of the basic building blocks of any
telecommunications network. The physical layer defines everything about how
electrical signals are transmitted over a telephone line or wireless medium including
types of electrical properties - for example: voltage levels - as well as establishing an
electrically defined path to transmit the proper amount of electrical energy (the bits of
data) through the media (cable or wireless).
2. The Data Link Layer (Layer 2), is the second layer of the OSI Reference Model.
Layer 2 provides data link services for reliable communications between end systems
over the same channel or link. Some of the services provided by layer 2 include
framing of the data into packets suitable for transmission, detection of transmission
errors, and control of the use of the physical medium to ensure no collisions occur.
3. The third layer in the OSI model is the Network Layer (Layer 3). The Network Layer
is responsible for routing data packets between multiple interconnected networks. The
Network Layer handles critical issues related to how to route packets from their
originating host to their destination host including how to determine optimal routes
for packets based on their destination address, controlling the flow of data, managing
IP addressing schemes, and how to identify which packets belong to each network.
4. The Transport Layer (Layer 4) provides complete and reliable communications
between end systems. The Transport Layer establishes and maintains logical circuits
between the two nodes (hosts) on the network, provides a means for users to enter and
exit the network, segments and reassembles Data at each terminal station, provides
mechanisms for error recovery as well as managing flow control.
5. One way to look at it - the Session Layer, number five in the stack, handles how apps
talk to one another across machines. Instead of just sending messages, it sets up those
conversations, keeps them running, lines things up right, then wraps it all up when
done. Data moves smoothly because someone is watching over how everything
connects.
6. Here comes the sixth layer - sometimes named the translation layer. Data moves
between apps, but only if it makes sense across different platforms. This level handles
how information looks when sent, shaping output so another system can understand it
easily. Not just sending raw bits - it adjusts structure, applies security wraps if needed,
squeezes files smaller when space matters. The result? A consistent shape for data,
picked together by connected systems so nothing gets lost in transit.
7. Here lies the seventh layer, sitting right beside those using it. What happens next? The
sorting and handling of app tasks unfold here - think browsing or sending messages.
Instead of just moving data, this level lines up what programs need from real people
typing away. Services pop up where apps can grab them without extra steps.
ANS.4.
Purpose of an ISP
The primary responsibility of an ISP is to supply Internet connectivity; however, it also
provides a host of services that support e-Commerce and other online business activities.
Below are a few of the important services that ISPs provide:
1. Equipment: Internet Service Providers (ISPs) typically rent out networking equipment
(modems, routers, and fiber access terminals) to customers or businesses. This allows
customers and businesses a reduction in the initial cost of purchasing equipment, which is
typically owned by the ISP.
2. Technical Support: Most ISPs provide technical support to help them maintain their
networks and keep them running without issues. This can be particularly advantageous to
users who may not employ someone who has networking expertise or experience.
3. Email: Many ISPs offer email hosting services, allowing businesses to use a professional
email address when communicating on behalf of their business.
4. Internet Connection Plans: Many ISPs offer a tiered pricing structure (Tier 1, Tier 2, and
Tier 3) to allow customers to choose an Internet connection speed and reliability that meets
their needs.
5. Internet Connection Technology: ISPs are able to provide various types of Internet
connection technologies, such as LTE and 5G, to meet customers' diverse Internet
connectivity needs.
Importance of Domain Name Registration
1. Accessibility and Identity: Compared to numerical IP addresses, domain names, or
URLs, are much simpler to recall. They serve as the foundation of a company's online
persona and facilitate consumer access to a website. [Link], for example, is
instantly identifiable and memorable.
2. Crucial to the Domain Name System (DNS): The process of integrating a domain
name into the global Domain Name System (DNS) requires registration. In order to
route the request to the appropriate website server, a DNS server converts a user's
typed URL into the corresponding machine-readable IP address. ICANN (Internet
Corporation for Assigned Names and Numbers) oversees this system on a global
scale.
3. Exclusive Usage and Ownership: There should only ever be one registered domain
name for the entire world. When you register your domain, you have secured your
exclusive use of that web address. This way, you will not have any conflicting
domains or ownership and it establishes your legal ownership of the site. By
registering a domain name, it protects your brand's online identity from impersonation
or cybersquatting.
4. Professionalism and Authority: Having a registered domain name (most often a
unique name, such as a .com or a .in) demonstrates a professional presence and adds
to your brand's authority, which leads to increased customer confidence. It is also a
crucial digital asset that serves as the building block for all online marketing,
communication, and commerce activities.
5. Identification and Selection: The choice of domain name extension when registering
is an important consideration. A generic TLD (such as a .com) indicates a global
commercial entity, while a Country Code TLD (such as an .in) will specifically target
a particular country, and a Sponsored TLD (such as an .edu) represents a particular
community, helping user perception and relevance in search engines.
ANS.5.
The Value Proposition represents the fundamental reason why customers prefer one business
to another. It explains how unique and distinct a company's products or services are from
other businesses and what gives those products or services added value relative to
competitors.
For example customers illustrates how in a traditional book store, customers were required to
go to the store to purchase a book, and when they arrived, there was no guarantee that the
book would be available for purchase. Amazon recognised that this was a pain point for its
customers and developed its Value Proposition based on the convenience and ease of
purchasing books online. Similarly, in the competitive ride sharing industry, Uber, Ola, and
Rapido all provide similar services to the same group of customers; however, they have
developed different value propositions through things like pricing, service type, user
experience, etc.
For e-commerce businesses, having a clearly defined Value Proposition is more than just a
functional statement; it serves as a strategic vehicle for creating a competitive advantage by
addressing and fulfilling the unmet needs of customers and establishing a foundation upon
which the Revenue Model and Market Strategy are built. The Value Proposition is the answer
to the question of what value an e-commerce business provides for its customers.
Components of a Business Model
A business model is made up of a number of essential components that collectively
describe how a company runs:
1. Value Proposition: It outlines the advantages and remedies provided to clients. It
draws attention to what makes the good or service special and worthwhile.
2. Customer Segments: This component lists the various customer groups that the
company seeks to cater to, such as individuals, companies, or particular age or income
brackets.
3. Channels: Channels explain how a business provides its clients with its goods or
services. These consist of distributors, retail locations, internet platforms, and direct
sales.
4. Customer relationships: This describes how a company engages with and keeps
clients. Personal help, self-service, customer service, and loyalty programs are a few
examples.
5. The revenue streams highlight where exactly the business makes money from. This
may come from products, subscriptions, licenses, or advertisements.
6. These are some of the key assets needed to carry on the business, such as technology,
human capital, brand equity, or physical infrastructure.
7. Key activities: These refer to the key functions or tasks that a business has to
undertake. These include the basic activities such as production, marketing, research,
and servicing. These activities Key Partnerships: The third type is partnerships, which
engage suppliers, distributors, or other firms to mitigate risks and costs.
8. Structure: This corresponds because all the significant expenses that are incurred in
carrying out a business are described here, such as operational, salaries, marketing,
and technology expenses.
ANS.6.
Value Proposition's Significance in a Business Model
A key component of any business model is the value proposition, which explains how a
company's goods or services specifically satisfy the needs of its clients. Its main significance
is that it is the primary factor that leads consumers to select one company over its rivals. It
clearly states the particular value or advantage provided, successfully setting the business
apart from competitors. For example, in a crowded market like ride-hailing, businesses like
Uber, Ola, and Rapido compete by offering different value propositions, whether they are
based on cost, ease of use, or type of service.
A strong value proposition fixes problems that are already in the market. In the past, you had
to go to a store to buy a book, which wasn't always easy to find. Amazon saw this customer's
pain point and based its value proposition on the fact that online shopping is extremely
convenient, has a huge selection, and is available 24/7. This example shows that a value
proposition is not just a list of features; it is also a strategic tool. From the customer's point of
view, it is important to find a competitive advantage, guide market strategy, and answer the
basic question of why a business exists. It has a direct effect on all other parts of the business
model, such as the way it makes money and how it goes to market.
Stages of ELSC
1. The Development Stage is where the e-business concept begins and is primarily
concerned with the development of the foundation for the e-business; there are no
sales during this phase. All efforts during this stage will be focused on preparing for
an e-business.
2. The Startup Stage is where the e-business begins officially operating (selling
products/services), slowly gaining traction and growing its customer base and market
presence.
3. The Growth Stage shows the largest increases in sales and profits; these increases
occur because consumers have begun to accept the company and it is expanding
quickly into new markets. An e-marketer must secure further resources and/or
financing to develop and scale their business model.
4. Maturity Stage, the e-business is well-established in the market and has reached its
point of saturation (where sales will stabilize), resulting in the e-business becoming
static in its sales volume/profitability, and likely having to spend its time focusing on
maintaining market share and optimizing profit.
5. The Decline Stage of an e-business is characterized by a decrease in sales/profit; this
decline can occur for a variety of reasons including increased competition, increased
saturation in the market, and/or changes in consumer preferences resulting in an
overall decline in the company's overall performance in the marketplace.
6. Exit Stage: The last step in the life cycle is when the management has tried everything
they can to save or keep the failing business going and it is time to close it down.