Tutorial 9 (Chapter 10 & 11)

Chapter 10

Retailing on the Web

End of Chapter Questions:

1. Why were so many entrepreneurs drawn to start businesses in the online retail sector initially? (Question 1)

n Greatly reduced search costs on the Internet would encourage consumers to abandon traditional marketplaces in order to find lower prices for goods

n Market entry costs would be much lower than those for physical storefronts, and online merchants would be more efficient than offline competitors

n Traditional offline physical store merchants would be forced out of business

n Some industries would become disintermediated as manufacturers built direct relationship with consumer

n Ultimately, few of the above assumptions proved to be correct, and structure of retail marketplace in the U.S. has not be revolutionized

2. Explain the distinction between disintermediation and hypermediation as it relates to online retailing. (Question 9)

3. What are five strategic issues specifically related to a firm’s capabilities? How are they different from industry-related strategic issues? (Question 14)

n Strategic factors that pertain to firm include:

§ Firm value chain

§ Core competencies

§ Synergies

§ Technology

§ Social and legal challenges

Chapter 11

Online Service Industries

End of Chapter Questions:

1. Compare and contrast the two major types of online service industries. What two major features differentiate services from other industries? (Question 2)

n Within service industry groups, can be further categorized into:

§ Transaction brokers

§ Hands-on service provider

n Services industry features:

§ Knowledge- and information-intense, which makes them uniquely suited to e-commerce applications

§ Amount of personalization and customization required differs depending on type of service

2. Define channel conflict and explain how it currently applies to the mortgage and insurance industries. Name two online insurance companies or brokers. (Question 6)

3. Explain how global distribution systems (GDSs) function. (Question 13)

Merchants who buy reservations from suppliers, and then resell the “inventory” to agencies, which then retail the inventory to customers or create vacation packages that are then sold to retail.

4. In addition to matching job applications with available positions, what larger function do online job sites fill? Explain how such sites can affect salaries and going rates? (Question 15)

Company Location, Salary offered by the company, Background and Overview of the company can be found through online job sites.