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Chapter 10, Page 166
Conclusion
Planning for an Internet presence can make all the difference. Entrepreneurs will benefit by
1. What advantages does an “online-only” strategy offer a company? Why do
many start-up companies use this strategy? (LO 4) (AACSB: Reflective
2. What advantages do retail stores offer a company? Disadvantages? (LO 4)
(AACSB: Reflective thinking)
3. Why are many companies shifting to a multichannel strategy that involves both
physical stores and an online presence? (LO 4) (AACSB: Application of
knowledge)
1. Why are cybercriminals increasingly targeting small businesses with their
attacks? (LO 6) (AACSB: Reflective thinking)
Copyright © 2019 Pearson Education, Inc.
Chapter 10, Page 167
2. What are the risks and dangers to a small company that is the victim of a
cyberattack?(LO 6) (AACSB: Reflective thinking)
3. Use the information in this chapter and resources of the Internet to develop a list
of at least five suggestions that small business owners can act on to strengthen
the computer security in their companies and reduce the threat of a cyberattack.
Part 4: Chapter Discussion Questions
10-1. In what ways has the Internet and e-commerce changed how companies do
business? (LO 1)
10-2. Discuss the factors entrepreneurs should consider before launching an e-
commerce site. (LO 1)
Before launching an e-commerce effort, entrepreneurs should consider the following
strategic issues:
Copyright © 2019 Pearson Education, Inc.
Chapter 10, Page 168
An ongoing investment of resources is required to create a meaningful
presence on the Internet.
How to measure the success of its Internet-based sales effort.
Six factors are essential to achieve e-commerce success: acquiring customers; optimizing
conversion of visitors into paying customers; maximizing Web site performance; ensuring
a positive user experience; retaining customers; use Web analytics as part of a cycle of
continuous improvement.
10-3. What are the 11 myths of e-commerce? (LO 2)
The 11 myths of e-commerce are:
Myth 1: If I launch a site, customers will flock to it.
Myth 2: Online customers are easy to please.
Myth 3: Launching an e-commerce site is free – or at least really inexpensive
10-4. What can an entrepreneur do to avoid falling victim to these 11 myths? (LO 2)
Myth 1: If I Launch a Site, Customers Will Flock to It
Myth 4: Making Money on the Web Is Easy
Chapter 10, Page 169
Making money online requires an up-front investment of time, money, and energy.
meaningful privacy policies. Trust is the foundation on which the long-term customer
needs, wants, likes and dislikes. Online customers only have to make a mouse click or
two to go to a rival Web site.
Myth 7: The Most Important Part of Any E-Commerce Effort Is Technology
Technology advances have reduced significantly the cost of launching an e-ecommerce
business. Having the right technology is not the most crucial ingredient; instead a
The customer service experience on the Web is vitally important and directly affects
buyer behavior. Customers say convenience is more important than getting the lowest
prices when shopping online. Customers still expect high levels of service. When
shoppers abandon their online shopping cart some companies immediately send an e-
mail message offering free shipping if they will complete their purchase.
orders on a Web site, is just as important as designing the site itself. According to
Daryl Plummer, “The companies with warehouses, supply-chain management, and
solid customer service are going to be the ones that survive.” Virtual order
fulfillment (or drop shipping) is utilized once a customer places an order; the
Copyright © 2019 Pearson Education, Inc.
Chapter 10, Page 170
company forwards the order to a wholesaler or distributor who then ships the product
to the customer with the online merchant’s label on it. There can be problems for the
online company related to the loss of control over delivery times and service quality.
Myth 11: My Business Doesn’t Need a Web Site
Today’s shoppers prefer to purchase from companies that offer a multichannel
approach, particularly those that offer in-store pick-up for online orders and in-store
returns for online purchases. When looking to purchase products locally, most
shoppers go online to conduct research first, and customers routinely share their
opinions online about products and their shopping experience. Successful
10-5. What strategic advice would you offer an entrepreneur about to start an e-
company? (LO 3)
10-6. What design characteristics make for a successful Web page? (LO 4)
Include an E-Mail Option, a Physical Address, and a Telephone Number.
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Chapter 10, Page 171
Create a Fast, Simple Checkout Process.
Provide Customers Multiple Payment Options.
Assure Customers That Their Online Transactions Are Secure.
Establish Reasonable Shipping and Handling Charges and Post Them Up
Consider Hiring a Professional to Design Your Site.
10-7. Explain the characteristics of an ideal domain name. (LO 4)
10-8. Give an example of a company with a good domain name and an example of a
company with a poor domain name.
10-9. What advantages does each e-commerce metric offer? (LO 5)
There are many Web analytics software packages, but effective ones offer the following
types of information:
Commerce metrics. These are basic analytics, such as sales revenue generated,
Copyright © 2019 Pearson Education, Inc.
Chapter 10, Page 172
Cost per acquisition – measures the cost that a company incurs to generate
each purchase (for customer registration).
Average number of page views per visit – measures how much time visitors
spend on a site (visit duration).
Bounce rate – measures the percentage of visitors to a company’s Web site
who view a single page and leave without viewing other pages.
Cart abandonment rate – measure the percentage of shoppers who place at
10-10. What steps should e-businesses take to ensure the privacy of the information
they collect and store from the Web? (LO 6)
10-11. What techniques can e-companies use to protect their banks of information
and their customers’ transaction data from hackers? (LO 6)
10-12. What challenges does evaluating the effectiveness of a Web site pose for
online entrepreneurs? (LO 6).
Part 5: Case Studies
The following text cases may be used for lecture and assignments for topics presented in
this chapter.
Case 8: Gitman Brothers
Case 10: Nuts.com
Chapter 10, Page 173
Part 6: Online Videos and Podcasts
These online videos may enhance class discussion and provide additional insight for the
chapter topics.
How to Market Your Ecommerce Site to Niche Markets 2:20 minutes
http://www.youtube.com/watch?v=pj81F8LrFkw
Five Major Don’ts of Building an Ecommerce Site 2:53 minutes
http://www.youtube.com/watch?v=Or8ZQ0TSCLo
Five Basic Ways to Market Your Site 2:33 minutes
http://www.youtube.com/watch?v=za7NdRtRIwY
Six Website Elements That Impact Customers in 3 Seconds or Less 2:39 minutes
http://www.youtube.com/watch?v=Ze-g2rNBIFc
Five Ecommerce Trends to Make an Impact in 2014 2:26 minutes
http://www.youtube.com/watch?v=icouqKSDspA
Humphry Slocombe: Promote Using Free Online Marketing 2:45 minutes
http://www.sba.gov/tools/sba-learning-center/video/humphry-slocombe-promote-
using-free-online-marketing
The 5 Most Epic Fails of SEO 2:23 minutes
http://www.youtube.com/watch?v=nXTk4xg3d74
Links to additional online resources are available on the companion Web site at
