Brian Ghilliotti

CST 111

Chapter 1

Review Questions

2/4/2019

2. Business processes are any interrelated and sequential activities and transactions that
frequently carried out toward production, distribution and sale of a service or product. These
activities include transferring funds, placing orders, sending invoices, and shipping goods to
customers.

5. Value added networks are business entities that provide firms with connections to potential
buyer as well as transaction services, known as Electronic Data Interchange (EDI). Before the
internet developed into its current form, value added networks provided most of the B2B
connections between trading partners and ensured the security of the data that they
exchanged. These EDI firms have sustained their services despite the growth of the internet.

6. During the first wave of electronic commerce, many investors were driven by fear of missing
initial investment opportunities presented by entrepreneurs trying to experiment with the sales
potentials that could be generated from establishing on-line channels for business. This need
for rushing in to buy low on these on-line based “good ideas” were usually met with investor
disappointment as many found that these so called good ideas were poorly implemented.

7. Many investors who tried to capitalize on first mover firms, or those firms that were part of
the dot.com bubble in order to experiment with the marketing potentials that the internet
provided, saw dollar signs more than risk. They over looked the fact that many of these firms
were smaller, less experienced and incapable of meeting the production, distribution, and
effective product marketing goals that the dot.com bubble investors were expecting from these
first mover firms. Those firms that generally succeed in the first mover phase of internet
commerce were larger, more experienced, had well established brands, and had more robust
production and distribution capabilities than the smaller firms.

8. During the third wave of electronic commerce, the proliferation of mobile devices, especially
smartphones, which are combined phone and internet capable devices, helped spread the
growth of electronic commerce in the third world. This trend was supported by enhanced
technological capabilities throughout the industry that permitted both miniaturization of internet
access devices as well as reduced expenses required to make them.

12. Business models examine the process that support the organizations primary goals, which
are usually related to profit. This model focuses more on the “how?” aspects of their growth
goals. For example, some business may chose to be strictly on-line, while others may chose
to be predominantly online with a secondary on-line division (this may be the model chosen by
a motorcycle firm). A revenue model focuses more on consumer market variables to support
the firms financial goals. Examples may include “what is our product(s)?” or “what is our
primary target customer?” This model is interested in identifying market niches more than
asking how the firm will distribute its goods and services into the market.

14. Observers have felt that so called booms and busts in internet commerce cycles are very
misleading, as internet commerce never really collapsed (as is implied by the term “bust”) at
any point in its development. If anything, it just slowed down, while continuing to evolve,
despite the market climate. Internet commerce is a high volume sector of the commerce
market, and thus it is very volatile, further reinforced by the business information it also makes
instantly available. Thus, changes are rapid in internet commerce, yielding high volatility
markets, with sudden large transfers of funds. This volatility may seem like a “bust”, but in
reality it is just another cycle in an environment that goes through many rapid cycles, mostly
related to constant changes in products and technologies. Additionally, B2B internet
commerce has seen a steady growth in the face of more volatile B2C business cycles.

15. One reason for the growth of hierarchal business structures, as opposed to the market
model of business structure, stems from the fact that manufacturing and distribution methods
became more complex as technologies were designed to make production techniques more
efficient. Essentially, output became more efficient with the influence over technology in
manufacturing, but the various process and secondary supporting processes to ensure
seamless continued production became more specialized. This ironically made supervisory
tasks more complicated, and it became necessary for production firms to develop specialists
who only specialized in ensuring that no disruptions occurred in any of the increasingly
fragmented and specialized aspects of production process.

Smaller independent firms, who were used to operating in local “market focused” production
environments, were small enough so that their general managers could play roles in both the
production and overall sales and distribution of their goods and services. However, these firms
found themselves unable to effectively compete with the efficiency of more verticalized
production firms, with management structures consisting of those who specialized in
supervisory functions, workers who specialized in producing the goods, and support workers
who specialized in sustaining production operations on behalf of the management and
workers. “Verticalized” production firms were usually able to obtain wider economies of scale,
but the smaller market focused firms were usually able to respond more quickly to changing
market trends.

17. A value chain is a way of coordinating the activities that each business unit undertakes to
promote sales of goods and services. Four examples of business value chain primary activities
are design, manufacturing a product or creating a service, deliveries, and providing after sales
service and support.

19. “Translation” usually involves direct rendering of a website or software product to another
language in its literal original form. This approach, however, may still leave in foreign concepts
that are not readily understood by users within the targeted market. Translators like to render
interpretations of software, hardware products, as well as web pages, to fit into local language
syntaxes, enabling preservation of the subtle ideas the were originally incorporated into these
products through abstractions used by the local culture. This form of translation emphasis is
known as “localization.”