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14188-37032_Ch03_Solutions - Electronic Commerce 7th...

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Electronic Commerce, 7th Edition Solutions 3-1 Electronic Commerce, 7th Edition 14188-37032 Chapter 3 Solutions Review Questions 1. Write a paragraph in which you describe the conditions under which a Web site could become profitable by relying 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. Answer: 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 a 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. 2. Describe two possible service-for-fee offerings that might become available to users of Internet-enabled wireless devices (such as PDAs or mobile phones) in the near future. Write one paragraph for each service in which you outline the profit potential and risk of losses for each. Answer: Two possible fee-for-service offerings that might become available are medical and legal services. The profit potential for these services would be higher than the traditional brick and mortar services offered. There are limitations placed on these services because of licensure issues and dispensing legal and medical advice over the Internet is still a major hurdle. As technology and the Internet mature, it will be possible to offer these services offer the Internet. 3. In two paragraphs, explain why a customer-centric Web site design is so important, yet is so difficult to accomplish. Answer: 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 Web site 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.
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Electronic Commerce, 7th Edition Solutions 3-2 4. In one paragraph, define the term “presence”. Write an additional paragraph in which you explain why firms that do business on the Web should be more concerned about presence than firms that operate only in the physical world. Answer: A business presence is the public image a business conveys to its customers, suppliers, employees, stockholders, neighbors, and the general-public. Businesses have always created a presence in the physical world by building stores, factories, warehouses, and office buildings.
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14188-37032_Ch03_Solutions - Electronic Commerce 7th...

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