Assignment 1 – ECOM 320
1. What are the main functionalities and features included in an e-commerce server?
E-commerce servers some or all of the following system functionalities: * Digital Catalog – used to display goods * Product Database – used to provide product information * Customer on-site tracking – used to personalize and/or customize products and to identify common customer paths and appropriate responses * On-site blog; used to engage customers in conversation and community response functions * Shopping cart / payment system – used to execute a transaction and provide secure credit card clearing and multiple payment options * Customer database – used to accumulate customer information, making it easier for returning customers * Sales database – provides after-sale customer support * Ad server, email server, campaign manager, ad banner manager – used to coordinate marketing / advertising and log behaviour of customers linked to email and banner ad campaigns * Site tracking and reporting systems – used to understand marketing effectiveness by tracking unique visitors, returning visitors, products purchased, and information identified by marketing campaigns.
The features that are unique to e-commerce are: * Ubiquity – it is accessible and available anyplace and at anytime. * Global Reach – the potential customers are directly correlated to the number of internet users in the world. * Universal Standards – the technology used by all of the nations in the online global world are shared when conducting e-commerce * Richness – Complex interactions can be delivered without sacrificing content. * Interactivity – allows for two-way interaction between the seller and buyer. * Information Density – the cost to deliver high quality information to the e-marketplace is decreased while the total amount available is increased. * Personalization – the seller is able to customize their products/services to meet the needs of the individual consumer’s purchasing preferences. * Social Technology – content is easily created and distributed by the user through the support of social networks.
2. Explain how and why designing mobile web pages is different from designing traditional web pages
In short, a mobile web site is a version of a regular web site scaled down to accommodate the smaller screen size of most mobile apps. For example there is a big difference between Lethbridge College’s regular web site and the mobile site.
Most desktop websites were not designed to be viewed on the small screens of mobile devices. Fonts can be too small, images too large, navigation can be clunky with lengthy page loads, and the list goes on and on. An optimized mobile website is designed specifically for the small screens of mobile devices. Text is displayed in large and easy to read fonts. Navigating between items is quick and easy. Mapping and calling a phone number displayed on the site can be achieved with a single touch.
Mobile Web designers need to be aware that when they ask for input, that the on-screen keyboard often pops up and blocks the lower half of a web site, so any input should be limited to the top half of the screen. Also, a regular desktop web site may be designed for more side-to-side viewing; mobile web sites need to minimize or eliminate horizontal scrolling and be designed for vertical scrolling. Also, because of different screen sizes, mobile sites should have pictures, frames, etc. coded as percentages of screen width instead of in pixels, as is common in coding desktop sites.
3. Describe the major business-to-business models. Give examples of each model (other than those listed in your readings). * E-distributor: a single company or entity serving a large number of customers; comparable to bricks-and-mortar wholesale stores. This model generates revenues through the sale of goods in an easily accessible “one-stop shopping” model – examples include edistributor.org (a wholesaler of ebooks, audio books and digital print) and finditparts.com (a distributor of heavy duty truck parts) * E-Procurement: companies that create and sell access to digital markets – they make money by collecting transaction fees, fees based on the number of workstations using the service and /or annual licensing fees. Examples include logicsource.com and ivalua.com * Exchange: B2B exchanges are independent digital electronic marketplaces where suppliers and commercial purchasers and usually serve a vertical industry. They generate revenue through fees and commissions for transactions that occur on their site. Example are zenoviaexchange.com and PlasticsNet.com * Industry Consortium: industry owned vertical digital marketplace that serve specific industries – examples are www.aeroexchange.com (Singapore Airlines) and covisint.com (automotive industry) * Private Industrial Network: web based networks that manage the interactions between definite companies in all belongings of the whole supply chain – from suppliers over the wholesaler to the retailers and finally to the customer – from the manufacturer to the end customer. The network is also named as a collaborative system, because the network improves the efficiency in all linked parts. Examples are networks owned by Coca Cola Inc. and General Electric.
4. Explain why it is difficult to categorize e-commerce business models.
It is difficult to categorize e-commerce business models because the term “business model” denotes a general description of how a business structures its activities to earn profits. Traditional business models have usually revolved around a central product or service. There are usually considered to be 11 e-business revenue models, but in reality there is little separation between the models. An e-business can be involved in a variety of relationships and interactions with customers, suppliers, and other entities and therefore fall into more than one “business model”. New models are also continuously developing, for example, Groveshark, Pandora and Spotify do not fall into any of the “regular” business models. There is no one correct way to categorize these business models.

5. Explain how the Internet and e-commerce have impacted the five forces of industry competitiveness.
The five forces of industry and how they are affected by the internet and e-commerce are: * Rivalry among existing competitors: Price competition increases and the market for a supplier has expanded * Threat of substitute products: new substitutes emerge, for example, streaming video is replacing DVDs, online reservations replace travel agents and streaming music and downloadable music replaces CD sales * Barriers to entry into the industry: The internet reduces barriers to entry such as the need for a physical store or a salesforce * Bargaining power of suppliers: Online procurement systems usually decrease the bargaining power of suppliers, but suppliers also gain from the elimination of middlemen. Online systems also allow the suppliers to sell directly to the end purchasers. * Bargaining power of buyers: The availability of global price and product information shifts the bargaining power from the suppliers to the purchasers
6. Describe HTML and XML, and compare them.
HTML is a specialized coding language that is used to encode content so it can displayed in a web browser, using a source code, which is a format in which a program is written that can be read by humans and that is then converted into a different format that the computer can recognize.
XML is a mark up language similar to HTML in that they both contain symbols to describe the contents of a page or file; but while HTML describes the content only in terms of how it is to be displayed and interacted with, XML describes the content in terms of what data is being included. It can transform data into new formats as new tags can be added as opposed to HTML that has a set number of predefined tags.
Case 1 (20 marks)
Read the case Amazon.com: Transforming Estrategy—from Clicks to Bricks in your Lesson 1 reading from Trites & Boritz (pp. 43–44 in your e-text) then answer the following questions. 1. What challenges is Amazon facing with their strategy to expand into new markets? (10 marks)
Amazon faces a number of challenges from a number of sources: * physical-world retailers, catalog retailers, publishers, vendors, distributors and manufacturers of products that Amazon sells, many of which possess significant brand awareness, sales volume, and customer bases, and some of which currently sell, or may sell, products or services through the Internet, mail order, or direct marketing; * Other online E-commerce sites selling similar items; * A number of indirect competitors, including media companies, Web portals, comparison shopping websites, and Web search engines, either directly or in collaboration with other retailers; and * Companies that provide e-commerce services, including website development; third-party fulfillment and customer-service.
Amazon believes the main competitive factors in its market segments include “selection, price, availability, convenience, information, discovery, brand recognition, personalized services, accessibility, customer service, reliability, speed of fulfillment, ease of use, and ability to adapt to changing conditions, as well as our customers’ overall experience and trust in transactions with us and facilitated by us on behalf of third-party sellers”.
For services offered to business and individual sellers, additional competitive factors include the quality of Amazon’s services and tools, their ability to generate sales for third parties they serve, and the speed of performance for their services. 2. What is the main business model adopted by Amazon? Has this model changed since the creation of the business? (10 marks)
Their business model, quite simply, according to Jeff Bezos (founder of Amazon.com) is to “sell and deliver stuff to customers”. If thought of this way, then Amazon’s business model has not changed so much as adapted and evolved. Amazon started out purely as a Virtual Merchant E-tailer, but has now expanded its merchant offerings and now its business model can be said to include “Market Creator” in the B2C arena and E-procurement services in the B2B spectrum.
In the beginning, Amazon focused on online book retailing, but then added auctions (zShops). In 2000, they added the Amazon Marketplace and later added partnerships and logistic services, e-commerce platforms and web services and then the eBooks/Kindle and recently the Amazon Fire smartphone.
Amazon’s business model, as stated above, has not changed, especially when looking at the eight key elements of a business model: market, opportunity, value proposition, revenue model, competitive environment, management team, organizational development, market strategy, and competitive advancement. This is very evident by reading the 2013 Annual Report – in it, they reprinted their 1997 letter to shareholders and reiterated their commitment to a long term approach to success:
“It’s All About the Long Term
We believe that a fundamental measure of our success will be the shareholder value we create over the long term. This value will be a direct result of our ability to extend and solidify our current market leadership position. The stronger our market leadership, the more powerful our economic model. Market leadership can translate directly to higher revenue, higher profitability, greater capital velocity, and correspondingly stronger returns on invested capital.
Our decisions have consistently reflected this focus. We first measure ourselves in terms of the metrics most indicative of our market leadership: customer and revenue growth, the degree to which our customers continue to purchase from us on a repeat basis, and the strength of our brand. We have invested and will continue to invest aggressively to expand and leverage our customer base, brand, and infrastructure as we move to establish an enduring franchise.
Because of our emphasis on the long term, we may make decisions and weigh tradeoffs differently than some companies. Accordingly, we want to share with you our fundamental management and decision-making approach so that you, our shareholders, may confirm that it is consistent with your investment philosophy:
• We will continue to focus relentlessly on our customers.
• We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions.
• We will continue to measure our programs and the effectiveness of our investments analytically, to jettison those that do not provide acceptable returns, and to step up our investment in those that work best. We will continue to learn from both our successes and our failures.
• We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case.
• When forced to choose between optimizing the appearance of our GAAP accounting and maximizing the present value of future cash flows, we’ll take the cash flows.
• We will share our strategic thought processes with you when we make bold choices (to the extent competitive pressures allow), so that you may evaluate for yourselves whether we are making rational long-term leadership investments.
• We will work hard to spend wisely and maintain our lean culture. We understand the importance of continually reinforcing a cost-conscious culture, particularly in a business incurring net losses.
• We will balance our focus on growth with emphasis on long-term profitability and capital management. At this stage, we choose to prioritize growth because we believe that scale is central to achieving the potential of our business model.
• We will continue to focus on hiring and retaining versatile and talented employees, and continue to weight their compensation to stock options rather than cash. We know our success will be largely affected by our ability to attract and retain a motivated employee base, each of whom must think like, and therefore must actually be, an owner.”
(Reprinted from Amazon’s 2013 Annual report)

Case 2 (30 marks)
Read the case Google Glass: Augment My Reality in your Lesson 2 reading from Laudon & Traver (pp. 65–67 in your e-text) then answer the following questions. 1. What is augmented reality technology and how could be used in e-commerce? Explain your answer using an example. (10 marks)
Augmented reality is content (text, video, and sound) that is superimposed over live images (as in the case of sports television such as football, where the “first down” line is often displayed on the TV screen) or a physical real-world environment (similar to a heads-up display, several programs available for the iPhone allow a user to view their environment through their camera and the program tell them their latitude and longitude and compass directions) in order to supplement the user’s experience. The technology brings together location and context, helping the user understand his or her environment better.
Ikea already uses augmented reality in their 2014 catalog app: The extended digital content includes a feature where customers can now view and place selected 3D representations of IKEA products in their own rooms. Other possible e-commerce applications would include the ability to see what a room would look like painted in a different colour scheme simply by choosing the colours and imposing it over the existing room colours. 2. Search the web and find three other augmented reality technologies or developments other than Google Glass. What are these technologies based on? (5 marks)
Microsoft HoloLens:
Details regarding Microsoft HoloLens are very few – it appears to be based on holographic technology, which is considered more VR (virtual reality) technology than Augmented Reality (AR) and the new Windows 10 operating system:
“Microsoft HoloLens is the first holographic computer running Windows 10. It is completely untethered – no wires, phones, or connection to a PC needed. Microsoft HoloLens allows you to pin holograms in your physical environment and provides a new way to see your world.

Microsoft HoloLens features see-through, holographic, high-definition lenses and spatial sound so you can see and hear holograms in the world around you. Complete with advanced sensors and a new Holographic Processing Unit (HPU) that understands the world around you, Microsoft HoloLens is able to run without any wires while processing terabytes of data from the sensors in real-time.” (http://www.microsoft.com/microsoft-hololens/en-us/get-ready)
Land Rover Transparent Bonnet:
This is still in the concept stage. A blend of virtual reality and careful camera placement appears to make the `bonnet` or `hood` of a vehicle to appears transparent and display the road underneath. The camera view starts almost where the driver's ends, and extends from directly in front of and below the grill, all the way under the engine and between the front two wheels.
The car is also equipped with a heads-up display which projects car data like speed and clearance onto the windshield. The new Transparent Bonnet technology also lets it project the camera's view onto the windshield. It's perfectly positioned, at least in the video, so it looks as though the car hood has suddenly become semi-transparent. Essentially, the driver sees not only the road below, but also the orientation of the car's front wheels.
Vizera Labs Furniture Fabric Selector
(http://www.vizeralabs.com/#whats-vizera) This augmented reality program projects different furniture patterns and fabric simulations on existing furniture so that consumers can see what the finished product would look like. It uses a projection device and a tablet device (which is used to choose the fabric texture, colour, and material simulation).
Technology used includes 3D texture characterization, smart beaming, enhanced material simulation, fabric IQ engine (software) and algorithms that augment the decision making process for customers.

3. What are the benefits and limitations or augmented reality? (10 marks)
The benefits of Augmented Reality (AR) are many. Here are three examples: * Education: AR allows learners to visualize complex spatial relationships and abstract concepts, experience phenomena that is not possible in the real world, interact with two and three dimensional synthetic objects in the mixed reality (for example, rotate 3D models of chemical molecules), and develop important practices that cannot be developed and enacted in other technology-enhanced learning environments. * Marketing: The automotive industry has used AR to enable customers to scan their flyer and then, through their smartphone or tablet, see a three-dimensional model of the vehicle (e.g., Layer program); QR codes are another example – scanning a QR code reveals more complex information regarding the product (or it may even display a video about the product). Another example would be Ikea`s program which allows you to see how their furniture fits into your environment. * Tourism: AR allows a person using a smartphone app to point the camera at an object, such as a building or statue and find out more information about it (virtual tour guide). Other programs use the GPS and compass features of the phone to determine where you are and advise you of restaurants, points of interest, etc. that would be in the direction you point the camera on the phone.
Limitations of AR include: * Social acceptance: AR reduces, and in some cases, can almost eliminate privacy for individuals. Information is gathered from your use of AR for use in advertising and marketing (`customizing the user experience` as it is often referred to); likewise, there is a fear that AR can include facial recognition software so that a stranger can know everything about you the moment you meet. * Technology: Currently, GPS systems for consumers are only accurate within approximately 30 feet, also, the compass feature on some phones is not very accurate unless it is calibrated first. This may lead to incorrect information being sent to the user (going down the wrong road to get to their destination and getting lost). The screen size of their mobile unit (cell phone) is also a limiting factor, although today`s trend of bigger cell phones may mitigate this disadvantage. * Information Overload: Some people may overly rely on their AR apps to retrieve information – some of this information may be incorrect or outdated, or, on the other end of the scale, overwhelming. Some people may prefer to use their AR iPhone applications rather than an experienced tour guide, even though a tour guide may be able to offer a level of interaction, an experience and a personal touch unavailable in a computer program. 4. If you are an e-commerce manager, would you adopt any of these technologies, and why? (5 marks)
If I was an e-commerce manager, I would most definitely embrace augmented reality, especially if I was selling a product such as shoes or furniture. The ability to superimpose your product into the consumer`s environment is priceless. Further, technology that would enable users to change colors, fabrics, and textures would be a huge advantage in marketing the product; it brings the consumer one step closer to the traditional buying experience while maintaining the convenience and accessibility of the e-commerce market.
Case 3 (20 marks)
You have been hired as the project leader to develop the e-commerce system of a large retailer specializing in offering grocery products in 20 locations across Alberta. The CEO needs to know the options available for building the e-commerce site and what technologies should be adopted.
1. Consider your options for building the site in-house with existing staff or outsourcing the entire operation. What is the recommendation that best fits best the company’s interests? Explain why and support your analysis with good arguments. (10 marks)
There are three possible options available when creating an e-commerce site: (1) build it `from the ground up`, (2) outsource the entire process, or (3) purchase an off-the-shelf solution and customize it. I would choose the third option – purchase and existing e-commerce suit that is customizable and then customize it to my own particular unique circumstances.
The reason for not building it from the ground up is simple: Why re-invent the wheel? Likewise, outsourcing the entire project removes control from the company and places it in the contractor’s hands – one might have final say in the project, but higher costs may result if something has to be re-designed because your vision” was not followed.
With the right commercial e-commerce suite, you can add components, such as mobile computing apps that incorporate augmented reality, or subtract components that you do not need; it all depends on the answer to the question “What do you want this e-commerce site to do for your business?”
The basic components of a commercial e-commerce suite have already been proven and therefore the risk of failure (e.g., credit card transactions do not get processed or the customer database does not provide the correct information). Commercial software packages will also often contain the ability to provide metrics and data analysis for the business.

2. Which e-commerce suite software package would you choose and why? (Your answer should be based on the nine key factors presented in your Lesson 2 reading from Laudon & Traver, pp. 171–172 in your e-text). (10 marks)
I would choose e-Smart eCommerce Suite as my ecommerce suite (http://www.ydeveloper.com/e-smart-ecommerce-suite.html). This suite was developed by Ydeveloper, an information technologies solutions and services provider.
Here are the factors I based my decision on:
Functionality: This package is scalable and it can be hosted on almost any of the major e-commerce platforms (Yahoo store, Amazon Webstore, eBay Stores, etc.)
Support for different business models; Ydeveloper.com has extensive experience in custom building ecommerce site and eSmart eCommerce Suite is totally customizable to support all types of business models
Business process modeling tools; a full range of tools can be integrated
Visual site management tools and reporting; eSmart eCommerce Suite has a full range of web management tools
Performance and scalability; their package can be extensively customized and adapted to any scale.
Connectivity to existing business systems: This suite integrate with a number of third-party solutions
Compliance with standards: This software complies with all standards
Global and multicultural capability: Our market would primarily be in Alberta, with some shipping to neighbouring provinces. The main language for transactions would be English, although there would be pockets of users whose first language would be French. eSmart eCommerce Suite software is multi-lingual.
Local sales tax and shipping rules: eSmart eCommerce Suite can be fully customized for local taxes
Summary: There are countless off-the-shelf packages available for eCommerce creation. Given the nature and size of this grocery chain, I would not choose something designed for the SMB market. Also, given the unique circumstances of having 20 different store locations, that is to say, the eCommerce site should complement the bricks-and-mortar store; we are not attempting to sell groceries online across the world. We are attempting to provide a better shopping experience for our current customers, including offering sale items, making them aware in-store (with our mobile app) of sale items.
Online shopping, with in-store pickup or local delivery, are also options that can be considered. For all of these items, a fully-customizable eCommerce software suite needs to be considered.
With eSMart eCommerce Suite, because it can be 100% customized as required and can be scaled and integrated with various platforms, and the fact that much of the customization can be done in house or in conjunction with Ydeveloper.com, I believe this would be the best solution for this grocery chain.