Turban- 3e
Instructor’s Manual
Chapter 12
Launching a Successful Online Business and EC
Projects
Learning Objectives
Upon completion of this chapter, you will be able to:
1. Understand the fundamental requirements for initiating an online business.
3. Understand the process of adding EC initiatives to an existing business.
5. Describe the process of acquiring Web sites and evaluating building versus hosting
options.
7. Evaluate Web sites on design criteria, such as appearance, navigation, consistency,
and performance.
9. Discuss the major steps in developing an EC system.
11. List the various EC application development methods along with their benefits and
limitations.
12. Describe the criteria used in selecting software vendors and packages.
Content
Opening Case: Vodafone Essar of India
12.2 Adding E-Commerce Initiatives or Transforming to an E-Business
12.4 Web Site Hosting and Obtaining a Domain Name
12.6 Web Site Design
12.8 Development Strategies for E-Commerce Major Applications
12.9 Vendor and Software Selection
Managerial Issues
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Supplementary Videos for this Chapter
1. How to start a business – Starting a business (3:33 min)
How to start an online business; what are the major steps in the process?
2. How LinkedIn referrals helped build a company
LinkedIn can provide the contacts needed to succeed in a new business. It also provides
marketing leads and provides for referrals.
3. How to build an eCommerce website using osCommerce Part 1 (7 min)
4. Google Wave: NLP (5:04)
All about natural language processing as a facilitator of e-commerce
5. Midmarket: How Jive Social Business Suite 4.0 Looks in Microsoft Office, on iPhone
(8 slides)
An illustration of Jive features that support social commerce, including integration with
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Answers to Pause/Break Section Review Questions
Section 12.1 Review Questions
1. List the major steps in the process of building an online business.
2. Describe the formation process of a typical online business.
3. What special requirements must an online business consider in its formation? In e-
business planning?
4. What is a business case and how does it contribute to business success?
5. Describe initial, secondary, and IPO funding options available to a startup.
Initial funding is usually from an incubator or an angel investor.
6. What is an angel investor? An incubator?
7. How does a VC company support a start-up?
Section 12.2 Review Questions
1. Which EC initiatives are brick-and-mortar organizations most likely to add?
2. Describe the steps in becoming an e-business and the major activities involved in the
process.
See Exhibit 12.1
3. List some of the issues involved in transforming to an e-business.
4. Define BPR and BPM.
Business Process Reengineering and business process management are two systems to
5. Describe the major characteristics (key points) of organizational transformation.
The organization’s ways of thinking and vision will fundamentally change.
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Section 12.3 Review Questions
1. Distinguish between informational, interactive, transactional and collaborative Web
sites.
2. List the six steps in building a Web site.
Select a host
Section 12.4 Review Questions
1. What are the advantages and disadvantages offered by the different Web hosting
options?
2. What is a mirror site? Why would a company use a mirror site?
3. What criteria should an online business consider in choosing a Web hosting service?
4. What is a domain name? Why is selecting a domain name an important step for going
online?
5. How are domain names controlled in order to avoid duplication?
Section 12.5 Review Questions
1. What is content? Dynamic content? Personalized content?
2. How can a business use content for cross selling? For up selling? For promotion?
3. Where does content come from? Identify four sources of Web site content. What is
content creation?
4. What is syndication? How does it relate to content?
5. What e-newsletter content does a subscriber value most?
6. What is the purpose of content management?
Section 12.6 Review Questions
1. Describe 10 criteria used to judge Web site design.
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2. Name four site navigation aids.
Navigation bar
3. Why is performance a key design criterion? What causes slow performance? What can
be done to decrease download time?
4. Describe some issues for proper use of color and graphics on a Web site.
5. What is usability? List the major criteria used to determine usability.
Web site usability is a measure of the ease-of-use of a site by its audience. Factors
involved include:
Section 12.7 Review Questions
1. Examine 10 different Web sites and choose your 5 favorites.
Student answers will vary.
2. Go to the Web site of each of the developers/Webmasters of your 5 favorite Web sites.
What expertise do they profess to have? What projects have they completed? Would you
feel comfortable hiring their services?
Student answers will vary.
3. List the major steps in developing an EC application.
4. Define the various types of testing used during the EC development process.
The types of testing include:
unit testing: testing application software modules one at a time
Section 12.8 Review Questions
1. List the major e-commerce development strategies.
Build the system in-house.
Have a vendor build a customized system.
2. Define insourcing.
3. List some of the pros and cons of using packaged EC applications.
Some of the benefits of using packaged solutions include the variety of available
4. Compare the buy option against the lease option. What are the benefits and risks
associated with each option?
5. Compare the other development options. If you were the owner of a small company
trying to establish a new Webstore, which would you choose?
Section 12.9 Review Questions
1. List the major steps in selecting an EC application vendor and package.
2. Describe a request for proposals (RFP).
3. Describe a service level agreement (SLA).
Answers to EC Application Case Questions
EC Application Case 12.1: Innovation and Creativity at Amazon.com
1. What were the opportunities and needs in the consumer market that inspired Bezos to
create Amazon.com?
2. What factors, at both personal and business levels, led Bezos to his brilliant idea?
3. Visit Amazon.com and find some of their recent innovations.
EC Application Case 12.2: How Small Companies Use a Storebuilder
1. What benefits did the owners of these businesses derive from using Yahoo!’s services?
2. Identify the common elements in all of the cases.
3. Why would a large company such as TMaG use templates to create a B2B site?
Answers to Individual Discussion Questions
1. Compare and contrast setting up a traditional, brick-and-mortar business and an
online business. Consider factors such as entrepreneurial skills, facilities and equipment,
and business processes.
2. How is an e-business plan different from a traditional business plan?
3. Describe organizational transformation, and discuss some of the difficulties involved.
Organizational transformation is the process of changing an organization to be more
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4. How would you decide which Web site hosting option an online business should use?
List and briefly explain factors to include in your decision.
Student answers will vary. Criteria would include:
5. Who should be on a Web site development team for a small business? For a large
business?
6. Several times in this chapter online business owners are advised to gather competitive
intelligence from competitors (e.g., in SEO, what sites link to competitor sites). Is this
ethical? Why or why not?
7. Why is a store such as cattoys.com not be economically feasible off-line?
8. Yahoo! provides many services, including Web site hosting, storebuilding tools, and an
online mall. List the benefits of these services. What are the drawbacks, if any?
9. How is usability related to Web site design?
10. Discuss the advantages of leasing an application over purchasing one.
Leasing has several advantages. One of these advantages is the decrease in cost and time
11. A large company with a number of products wants to start selling on the Web.
Should it use a merchant server or an EC application suite? Assuming it elects to use an
EC application suite, how would you determine whether the company should outsource
the site or run it in-house?
12. An enterprise wants to modify its EC site so that it conforms more closely with the
company’s overall business strategies. What sorts of online data are available for this
purpose? What types of business strategy questions can be addressed by these data?
The company can evaluate its system access logs and any EC management tools it may
Answers to Class Discussion Questions
1. Discuss the logic of outsourcing the combined Web hosting and site construction.
What are some of the disadvantages?
2. Should a small business maintain its own Web site? Why or why not? Should a large
business maintain its own Web site? Why or why not?
3. What are the trade-offs in giving the customer everything possible (e.g., personalized
content, high-resolution graphics, a feature-full site) and the fundamental rules of Web
design?
4. What capabilities are offered by B2B and B2C EC applications? How do they differ?
Internet Exercises
(Note: URLs may change over time; please check the Internet Exercises on the
1. Go to the vFinance Capital (vfinance.com) and National Venture Capital Association
(nvca.com) sites and identify any trends or opportunities in acquiring start-up funding.
Student reports will vary.
2. Go to a Yahoo! category such as tourist agencies or insurance companies and pick 10
sites. Rate them as informational, interactive, or transactional Web sites. Make a list of
informational, interactive, or transactional features.
Student reports will vary.
3. Many individuals attempt to make a living simply by buying and selling goods on eBay.
Visit ebay.com and make a list of the ways in which these entrepreneurs use cross selling
and up selling in their sales activities.
Student reports will vary.
4. Visit Webmaster Forums (webmaster-forums.net), register (for free), and visit the Web
site critique area. Compare the design rules offered in this chapter with some of the Web
sites being offered for critique here. Offer at least one design suggestion to a Webmaster
who is soliciting feedback.
5. Explore the Web to find five dedicated Web site hosting services. Compare them on the
criteria listed in this chapter. Write a report that explains your findings.
Student reports will vary.
6. Go to godaddy.com. Examine their Traffic Blazer. How can it help you with SEO?
7. Enter 1and1.com. Examine their hosting, development, and other tools. Take the Test
Drive. Compare it with services offered by jstreettech.com. Write a report.
Student reports will vary.
8. Go to checkout.google.com and find the services offered to buyers. Why is shopping
here faster than in Amazon.com or Yahoo!?
Student answers will vary.
9. Enter emc.com and find its enterprise content management products. Write a report.
Student answers will vary.
10. Access choicemall.com. Visit some of the online stores in the mall. What are the
functionalities of the mall? What are some of the benefits of the online mall to the
participating vendors? To shoppers? Do you think a shopper is better off using an
online mall or using a search engine such as AltaVista to locate a store providing a
product of interest? In what ways could Choice Mall improve the chances that buyers
will make return visits?
11. Visit a large online storefront of your choice. What functions does it provide to
shoppers? In what ways does it make shopping easy? In what ways does it make
shopping more enjoyable? What support services does it provide?
Student responses will vary.
Team Assignments and Role Playing
1. Enter entrepreneurs.about.com. Each team member should select two or three of the
“browse topics” and relate it to online businesses. Make a presentation to the class.
Student reports will vary.
2. Enter myownbusiness.org/s2/index.html. Obtain a template and design a business plan
for your class EC project.
Student reports will vary.
3. Form two teams, the client team and the Web design team. After suitable preparation,
both teams meet for their first Web site planning meeting. Afterwards, both teams critique
their own and the other team’s performance in the meeting.
Student reports will vary.
4. Enter webhosting.yahoo.com/ps/sb and download the SiteBuilder. As a team, build a
storefront for your dream business. You can try it for free for 30 days. Use the design
features available. Have visitors check out the site. Rewards will be given to the best
stores. Alternatively, you may use the equivalent tools from eBay or 1and1.com.
Student reports will vary.
5. Select a series of Web sites that cater to the same type of buyer (e.g., several Web
sites that offer CDs or computer hardware). Divide the sites among the teams and ask
each team to prepare an analysis of the different sorts of functions provided by the sites,
along with a comparison of the strong and weak points of each site from the buyer’s
perspective.
Student reports will vary.
6. Several vendors offer products for creating online stores. The Web sites of these
vendors usually list those online stores that currently use their software (customer
success stories). Assign each team a number of vendors. Each team should prepare
reports comparing the similarities and differences among the vendors’ sites and
evaluating the customers’ success stories. Do the customers take advantage of the
functionality provided by the various products?
Student reports will vary.
7. As a team, explore the desired capabilities of various EC applications (B2B, B2C,
auctions, portals G2C, etc.). Look at the capabilities of these applications and at their
functionalities, and then compare the two. (See Section 18.3 for a list of functionalities.)
If the functionalities of the applications are not sufficient, explain what additional
functionalities are needed.
Student reports will vary.
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End–of-Chapter Real-World Case Questions: DEVELOPING A WEB
2.0 PLATFORM TO ENABLE INNOVATIVE MARKET RESEARCH
AT DEL MONTE
1. What motivated Del Monte to use social networking?
2. Relate the capabilities of the social network site to the market research activities (be
specific on a one-to-one basis).
3. Compare the methods used here to both computerized and noncomputerized focus
groups.