DISCUSSION QUESTIONS ASSIGNMENT

CHAPTER 10 E-COMMERCE : DIGITAL MARKETS,

DIGITAL GOODS

Group
Member

: 5
: Anggit Wahyuningsih (8335132482)
Fathia Rofifah
Halimah

Class

(8335132520)
(8335132402)

Siti Ranita Sakinah

(8335132515)

Ulfa Giny Septianingrum

(8335132550)

Yuliana Putri

(8335132433)

: B

Semester

: 101

Major

: Accountancy

Faculty

: Economy
STATE UNIVERSITY OF JAKARTA
2014
DISCUSSION QUESTIONS

1. How does the Internet change consumer and supplier relationships ?

The Internet has created a digital marketplace where millions of
people all over the world are able to exchange massive amounts of
information directly, instantly, and for free. As a result, the Internet has
changed the way companies conduct business and increased their global
reach. The Internet reduces information asymmetry. An information
asymmetry exists when one party in a transaction has more information
that is important for the transaction than the other party. That information
helps determine their relative bargaining power. In digital markets,
consumers and suppliers can see the prices being charged for goods,
and in that sense digital markets are said to be more transparent than
traditional markets.
Digital markets are very flexible and efficient because they operate
with reduced search and transaction costs, lower menu costs (merchants
costs of changing prices), greater price discrimination, and the ability to
change prices dynamically based on market conditions. In dynamic
pricing, the price of a product varies depending on the demand
characteristics of the customer or the supply situation of the seller. Digital
markets provide many opportunities to sell directly to the consumer,
bypassing intermediaries, such as distributors or retail outlets. As a result,

companies are able to raise profits while charging lower prices. The
removal of organizations or business process layers responsible for
intermediary steps in a value chain is called disintermediation.

Other than that, because internet digitally enabled commercial

transactions between and among organizations and individuals (ecommerce), It changes the relationship between consumer and supplier by
these eight unique features of e-commerce technology.

In other words, one clear change is that consumers can buy

products and services online and then make their purchases on the
Internet. The internet creates value for businesses by enabling digital
markets that are more efficient than traditional markets. It will no longer
need intermediaries which resulted lower prices for consumers. The
relationships between consumer and supplier has also been facilitated by
the Internet, in the digital markets the supplier can interact directly with
consumers, creating the possibility for developing new products and
services and customizing discussion groups to create ongoing dialogues
with their customers and use the information they have gathered to tailor
communication and products precisely to the needs of each individual.
Now both parties can communicate with each other from almost anywhere
on the planet, with a cell phone or laptop. Faster access to information,

faster purchases, and better circulation means the consumer is happy and
the supplier keeps making money.

2. The Internet may not make corporations obsolete, but the corporations will
have to change their business models. Do you agree ? Why or why not ?
Yes, our group is agree with that statement because nowadays, the
Internet is a vital tool for each enterprise as another way to sell their
products or services (e-commerce). In fact, it is the fastest growing form of
retail trade in the United States, Europe, and Asia. It won't be a good move
if the company doesn't take this seriously.

The Internet will paint a

completely different picture of business in the new millennium. Hence, To

stay competitive in the digital market, they should adopt a new business
model

that

best

suits

their

products

or

services

to

commerce at its best.

There are several types of internet business models such as :

exploit

e-

3. How have social technologies changed e-commerce ?

E-commerce technologies have evolved to be much more social by
allowing users to create and share with their personal friends (and a larger
worldwide community) content in the form of text, videos, music, or
photos. Using these forms of communication, users are able to create new
social networks and strengthen existing ones. All previous mass media in
modern history, including the printing press, use a broadcast model (oneto-many) where content is created in a central location by experts
(professional writers, editors, directors, and producers) and audiences are
concentrated in huge numbers to consume a standardized product. The
new Internet and e-commerce empower users to create and distribute
content on a large scale, and permit users to program their own content
consumption. The Internet provides a unique many-to-many model of
mass communications.