e-commerce a/601/7313 level 3 lo4 - be able to plan e-commerce strategies

Unit 06

E-CommerceA/601/7313

LEVEL 3

LO4 - Be able to plan e-commerce strategies

Scenario Assessment4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21Criteria Tasks 1 2 3

Learning Outcome (LO) The learner will:

Pass The assessment criteria are the pass requirements for this unit. The learner can:

Merit For merit the evidence must show that, in addition to the pass criteria, the learner is able to:

Distinction For distinction the evidence must show that, in addition to the pass and merit criteria, the learner is able to:

1 Know the technologies required for an e-commerce system

P1 Describe the technologies required for e-commerce

2 Understand the impact of e-commerce on organisations

P2 Explain the impact of introducing an e-commerce system to an organisation

M1 - Describe how organisations promote their business using e-commerce

3 Understand the effects of e-commerce on society

P3 Explain the potential risks to an organisation of committing to an e-commerce system

M2 - Explain solutions for the potential risks of using e-commerce

4 Be able to plan e-commerce strategies

P4 Review the regulations governing e-commerce

P5 Examine the social implications of e-commerce on society

D1 - Compare the benefits and drawbacks of e-commerce to anOrganisation

P6 Plan an e-commerce strategy

M3 - Provide annotated planning documentation for your e-commerce strategy

D2 - Evaluate youre-commerce strategy

LO4 - Assessment Criteria


P4 - Be able to plan e-commerce strategies Learners are required to understand the different legislations associated with having

an e-commerce site. They should be taught the different legislation and regulations that apply to e-commerce, the purpose and benefits of them and they should be encouraged to refer to the relevant websites and find out more details as to what the legislations specifically covers. Activities to help them research the legislations could be provided along with a quiz to check that they have understood what they have found out.

P5 – Examine the social implications of e-commerce on society Learners need to understand social implications of the increasing move towards

becoming an e-commerce society, which could be set as research activities. Learners could be asked to identify as many social implications as they can and these can then be distributed to learners in small groups or pairs for further research. The small groups/pairs could then be encouraged to provide feedback to the main group. Learners working in small teams could also be asked to identify a selection of benefits and drawbacks for customers of using e-commerce sites.

D1 - Compare the benefits and drawbacks of e-commerce to an Organisation

Learners should be encouraged to research a selection of e-commerce website interfaces. They should then use an example business (this could be provided) to help them research what the business is, the purpose and target audience for the website, how the business is structured online, creating an outline site plan to show the structure, how it is promoted and hosted. Learners should be encouraged to research W3C and what this means.

Assessment Criterion P4, P5, D1


P4 - The assessment criterion P4 could be evidenced by the use of a report, leaflet or presentation delivered by the learner that could be supported by tutor observation and/or recorded evidence. The learner is required to review and explain the different regulations to include legislation that affect e-commerce websites. They must briefly cover all of the legislation and regulations outlined in the teaching content, explaining what they are and their purpose.

P5 - The assessment criterion P5 could be evidenced by the use of a report, leaflet or presentation delivered by the learner that could be supported by tutor observation and/or recorded evidence. The learner is required to examine the social implications of an e-commerce society and must explain at least four social implications that e-commerce has on society.

D1 - The distinction criterion D1 can be evidenced by the learner providing a comprehensive comparison of the benefits and drawbacks of e-commerce to an organisation. Learners must include all of the benefits and drawbacks outlined in the teaching content and expand on these.



As stated earlier in the project, there are Laws that apply to trading online that do not apply offline and any company with a web presence needs to be aware and abide by these. Each law is designed to protect a specific issue, either data, good protection, theft, deliberate sabotage, infringements of rights and expected setting of standards.

These laws are the most common, but there are other smaller laws that surround specific Internet issues, like the selling of food, the transport of animals, tax specifics, sales to overseas, sale of weapons, age restricted sales, trading rights etc. Just like ordinary society these become more self aware when a business has been around for a while.

Legislation and Regulations ◦ Data Protection Act 1998 ◦ Freedom of Information Act 2000 ◦ Computer Misuse Act 1990 ◦ Copyright legislation ◦ Consumer Credit Act 1974 ◦ Trading Standards ◦ Distance selling 2000 ◦ e-commerce regulations 2002.



Why it is necessary Hacking has been around almost as long as the Internet; some

people just love to try and break into a computer system. Prior to 1990, there was no legislation in place to tackle the

problems caused by hacking. Although everyone knew that it was wrong and should be against the law, there was nothing that anyone could do about it.

As the problem grew, it became apparent that specific legislation was needed to enable hackers to be prosecuted under the law. So, in 1990, the Computer Misuse Act was passed.

The Computer Misuse Act (1990) recognised the following new offences:◦ Unauthorised access to computer material◦ Unauthorised access with intent to commit or facilitate a

crime◦ Unauthorised modification of computer material.◦ Making, supplying or obtaining anything which can be used

in computer misuse offences.

P4.4 – Legislation – Computer Misuse Act 1990


At the end of the day the Computer Misuse Act is there to prevent unauthorised access or damage. The things that it covers without mentioning the names include Viruses (creating and planting), Hacking (internally and externally) DDOS, Spam and Junk emails, directed damage to systems with the intent on causing any slowdown or hindrance to companies.

Despite the 30 years of attempting stopping, hacking and Viruses still happen to this day. Virus checkers, firewalls, constant upgrades and preventative measures like SSL still have weaknesses that can leave companies vulnerable.

The Computer Misuse Act does not prevent the damage but is there to punish those caught. The Act only applies to Britain, every other country has their own versions but some countries do not have any.

Task 4 – P4.4 - Produce a report describing the Computer Misuse Act, and what protections for e-commerce companies it provides.

P4.4 – Legislation – Computer Misuse Act 1990


The Consumer Protection (Distance Selling) Regulations 2005If you sell online, by mail order or by telephone to consumers, then this applies to your business. These regulations do not apply to business to business transactions. Key points to note: You should provide clear information about your offering before

purchase (no extras like tax and freight after the consumer has decided to purchase). It is helpful to be very clear what your freight charges are and whether prices include VAT to avoid doubt

You should provide a written confirmation of order following purchase

There is a "cooling off" period of 7 working days for most goods (exclusions could include perishable or digital goods). You should inform the customers of their right to cancel (without charge, other than return freight). For more information click here.

Task 6 – P4.6 - Produce a report describing the Consumer Protection Regulations, and what protections for e-commerce customers it provides.

P4.6 – Legislation – Consumer Protection Regulation 2005

http://www.berr.gov.uk/whatwedo/consumers/buying-selling/distance-selling/index.html


24 Hour global presence◦ Online businesses are always available for browsing, shopping, checking or any other

service they offer, irrespective of time or location allowing a massive potential market. Flexibility of location (International business from a local shop)

◦ Websites can be viewed or stored anywhere and therefore e-businesses are not location dependant unlike traditional high street stores. This allows businesses to be located in areas suited to the organisation. Sometimes the government offer grants for location to areas of high unemployment.

Personalisation of promotion◦ Websites store what customers have purchased and browsed, this information can be

used to perform targeted marketing, where promotions will be offered depending on what has been bought in the past. This should mean a more relevant marketing strategy.

Feedback from customers◦ All feedback is useful for business and the internet provides a useful tool for gathering

this from customers who perhaps would not have done so through face to face communication. This information if valuable if used to improve the e-business services being offered. Techniques include, forms, online questionnaires and email. Sometimes feedback can be given about the products the organisation sells.

Data collection and use in re-formulating the marketing mix.◦ As mentioned, information is very valuable but only if used and acted upon. Data

should be used to change and develop the marketing mix – Price, Product, Promotion and place. See also extended marketing mix (7ps)

P5.1 – Social Implications of e-commerce - Marketing


Opportunities for competitor analysis◦ Due to the visibility of businesses using the internet it is both easy and useful

to analyse ones competitors. Comparing prices, the service given, look, feel and functionality of other websites are all useful.

◦ However the watched are also watchers and due to this transparency all businesses on the internet should take advantage of understanding their competitors as well. The use of comparison websites are also a useful tool.

Opportunities to communicate with customers.◦ Businesses should take every opportunity to communication over the internet

with their customers. Internet chat (text) can enable a one to one dialogue to enable a personalised service much like a sales assistant within a shop.

◦ FAQs, email invitations, news, bulletin boards, discussion rooms and many other methods can be used to communication with customers and potential customers. The easier and unobtrusive this is made the more likely customers will use it.

Task 9 – P5.1 – Describe the Social Benefits for Companies in terms of Marketing in having an On-Line presence.

P5.1 – Social Implications of e-commerce - Marketing

24 Hour global presence

Flexibility of location

Personalisation of promotion

Feedback from customers

Data collection for marketing

Opportunities for competitor

analysis

Opportunities to communicate with customers.


Reduced requirement for premises◦ Traditional shops need to keep stock on show and be able to

replenish this when customer buy. They also need space for customers to browse both of which are less important for e-businesses. In some instances stock can be sent straight from manufacturers or wholesalers to the customer eliminating the need for any stock to be stored by the e-business at all, although most e-businesses still carry a supply of stock.

Flexibility of location◦ As mentioned previously the need to be located in a particular area

for most online businesses is low which allows businesses to chose cost effective areas to locate their business.

Reduced staffing costs◦ E-businesses can rationalise staff by automating many of the

functions performed through a business transaction. For example – re-ordering of stock, payment processing could be completely automatic and other functions such as maintenance of the website, customer service can be done with far fewer staff thanks to technology.

P5.2 – Social Implications of e-commerce – Business Function


Cash flow advantages◦ Instead of having to purchase lots of stock, and keep that stock

sitting in a warehouse and on shelves of a shop, stock can be ordered using a JIT principle or be dispatched straight from the supplier to the customer. This means that the businesses cash is not tied up in stock and can be used for other purposes.

Advantages of disintermediation of supply chain◦ Disintermediation is the process of cutting down the stages a

product or service goes through before it gets to the customer. Traditionally shops would buy from a wholesaler who in turn buys from the manufacturer. This meant slower product delivery times and more expense passed onto the customer.

◦ Research other advantages of disintermediation. Task 10 – P5.2 – Describe the Social Benefits for Companies in terms

of Business Functions in having an On-Line presence.

P5.2 – Social Implications of e-commerce – Business Function

Reduced requirement for premises

Flexibility of location Reduced staffing costs

Cash flow advantages Advantages of disintermediation of supply chain


24 hour availability◦ Customers can now browse, purchase, enquire, compare and other

activities when ever they wish. Easier cost/product comparisons

◦ Instead of walking around shops noting down prices and features of potential products, or ringing around or even having sales people visit customers can research the products very easily online with very little effort. Sometime product comparisons are offered within retailer websites. Customers can also sometimes use price/product/service comparison websites such as pricerunner, moneysupermarket and many others.

Personalised offers◦ Many e-businesses can personalise shopping experiences based on

browsing or purchase history which in turn can offer promotions based on these. For example buy Jimmy Cools CD and get 10% off his concert DVD. Examples include - Favourites – Tesco.com and Recommendations

– Amazon.com

P5.3 – Social Implications of e-commerce – Customer Benefits


Lower prices◦ Due to many different factors previously mentioned –

rationalisation of staff, disintermediation, less reliance on location e-businesses can offer lower prices. This is certainly true of businesses offering digital distribution which eliminates any medium (CD/DVD etc) or logistic costs.

◦ Many firms instead of offering lower prices offer an ISP or Internet Value Proposition which adds value without adding price. For example an extended warranty, free installation or other value adding incentives to buy from them.

Task 11 – P5.3 – Describe the Social Benefits for Companies in terms of Customer Benefits in having an On-Line presence.

P5.3 – Social Implications of e-commerce – Customer Benefits

24 hour availability

Easier cost/product comparisons

Personalised offers

Lower prices


Customer and user expectations of web access.◦ Customers have high expectations of their internet shopping

experience which can lead to online companies having to try very hard to please these customers.

◦ Providing new experiences has led to many innovations such as streaming video previews of films and music, 3D representations of products, feedback and reviews from purchasers of these products etc.

◦ This has a knock on effect of smaller businesses not being able to compete with the larger better resourced organisations.

Increased competition◦ Due to the relatively low entrance cost to e-business, competition

has increased dramatically, couple this with the confidence the market has especially learning from the mistakes of the past

◦ However this competition is not just from new entrants to the market but also from existing e-businesses trying to gain market share from their competitors.

◦ It is also worth noting that competition can now be global for certain products and services.

P5.4 – Social Implications of e-commerce – Negative Effects


New providers for old services◦ Traditionally if you wanted to buy or listen to music you

would visit a shop and purchase a CD. Now you have many different choices, visiting an online store to buy a CD, visiting an online store and downloading the CD (legally of course). How we have our services provided is changing even the simple telephone call is evolving using the internet.

◦ This can have an impact on the way a business needs to present itself, hardware outlay, new demonstration methods, deskilling, and still can barely compete

◦ Examples include: Music, VOiP, Shopping, Films and Software

Task 12 – P5.4 – Describe the Social Negatives for Companies in terms of Changing Business Methods in having an On-Line presence.

P5.4 – Social Implications of e-commerce – Negative Effects

Customer and user expectations of web

access.

Increased competition

New providers for old services


Competitive pressures◦ As mentioned earlier the pressure due to the expectations of

customers are very high which means certain businesses can not keep up with customer expectations and still remain profitable. This could cause customers to use competitors website.

Closures◦ Closures are inevitable and occur due to many different reasons.

Ultimately it means that the businesses will cease to trade and exist. Mergers

◦ Mergers are the joining of two or more organisations. There are many different reasons mergers take place. It could be the result of two companies wishing to challenge the dominance of another company or both companies agreeing that together they could take advantage of each others unique strengths and become stronger due to the union.

◦ Research what mergers are and why they take place, could this happen to your businesses.

P5.5 – Social Implications of e-commerce – Business Functionality


Take overs◦ This occurs when one firm buys out another and assumes

strategic control over them. Things change, people, premises, departments merge, jobs can be lost. Sometimes companies even close to make room for new management ideas and staff.

Re-focusing of business◦ Changing the focus of the business by perhaps shifting from

selling one particular product or service to selling others.◦ Examples include

Play and Amazon selling digtial downloads, both moving into allowing customers to sell their own products like Ebay.

Ebay buying Paypal and Skype.Task 13 – P5.5 – Describe the Functional Threats for Companies in terms of Changing Business Methods in having an On-Line presence.

P5.5 – Social Implications of e-commerce – Business Functionality

Competitive pressures

Closures Mergers Take overs Re-focusing of business


Employability and ICT skill requirements Understanding how to use a computer is essential in most jobs to a

greater or lesser degree. Many jobs opportunities will simply not be available without some degree of computing skill.

Increase in flexible working models Secondments – Some staff are taking extended leave to pursue other

interests. This leads in the need for contracted staff to fill the gap. Contracting – Employment is changing, it is getting rarer for

employment to be fulltime, instead many of the core workforce of an organisation is contracted on rolling contracts lasting anywhere from monthly to 18 or 24 month contracts. This leads to a transient workforce working where their skills are required.

Isolation and lack of Social Interaction More and more people are shopping from home, playing games form

home, working from home, and this is taking away the social skills needed for life. It is possible now to live completely at home without leaving the comfort of the house, paying bills, ordering food, making a living, social networking. This reduction in face to face communication causes a negative socialisation effect on society.

P5.6 – Social Implications of e-commerce – Socialisation


Closure of High Street Sites◦ Traditional high street shops have had to respond and will continue to in

order to survive against online organisations. This has lead to some loss of traditional shops and service providers. However many traditional shops have had to adapt and adapt quickly or face bankruptcy.

◦ Will we ever be in a position where high street shops are a rarity and online shops are the norm?

Keeping up with technology in order to use e-commerce sites◦ The move towards online dominance could lead to a very real need to

be technically literate in order to take full advantage of the services being offered.

◦ It could be argued that if the service provider is doing its job correctly the interface would be intuitive and very easy to access but perhaps not all service will be this accessible?

Task 14 – P5.6 – Describe the Social Negatives for Companies in terms of Socialisation in having an On-Line presence.


Keeping up with technology Increase in flexible working models

Isolation and lack of Social Interaction

Closure of High Street Sites Employability and ICT skill requirements


Changes in employment When was the last time you saw a blacksmith, a cooper, do you know a

baker other than Greggs. Changes in the way the Society has happened has meant a loss of old skills as well as the rise in un-laboured employment. There was a time when 25000 people worked on the floor of Ford in Luton, they have since been replaced by ten, and more cars are being made because of this. Similarly the Internet has meant the reduction of high street shopping, there are now more people working in Amazon’s warehouse putting things into trolleys than working in the Car industry in the whole of Luton.

De-skilling Technology has allowed many mundane, boring and repetitive jobs to be

taken away from human beings. However technology has also taken some highly skilled jobs from craftsman.

Re-skilling De-skilling has lead to many people re-skilling themselves with other

desirable skills. These include programming, maintenance, component and circuit boards creation and many others.

Task 15 – P5.7 – Describe the Social Negatives for Companies in terms of Employment changes in having an On-Line presence.


Changes in employment

De-skilling Re-skilling


Credit Cards Stolen When a member of staff steals a credit card from a customer in a shop,

they rob one person, when companies like PayPal and Sony had their cards stolen, tens of thousands were robbed. Money was returned, this is the nature of credit cards but Interests go up in comparison. The Internet has not led to more crime, it has led to bigger crime.

Products not as described In a shop you can return it if it is not right, you can check it out, try it on,

products need to be described under the Sale of Goods Act but on the Internet this has become more hazy. Click here for an example. They are still covered under the Sale of Goods Act but it is more difficult to prosecute.

Delivery Issues The biggest thing putting people off shopping is delivery times. Some

goods take weeks to arrive, problems with companies, with distributers etc. There is no guarantee with the Internet when things arrive or the condition. Click here for Amazon’s problems.

Task 16 – P5.8 – Describe the Social Negatives for Companies in terms of Fraud in having an On-Line presence.

P5.8 – Social Implications of e-commerce – Fraud

Credit Cards Stolen

Products not as described

Delivery Issue

http://consumerist.com/2007/05/15/ebay-scam-people-still-trying-to-sell-pictures-of-things/

http://www.consumeractiongroup.co.uk/forum/showthread.php?400237-Amazon-Logistics-delivery-woes


All websites have a function, some as informational needs, some as sales, some as support. Like any company they have a function and an end need. The more professional they are, the more they will have a defined business objective and the more their website will help them meet that objective.

Using an example of a commercial website with and off-line premises you will need to examine the purpose of what the business is, the target audience for the website.

This website needs to have more than one page, have existed for some time, have their website compliment their off-line services. The company can be local, national, international or global. It can be from a Primary, Secondary or Tertiary company.◦ Define the company Purpose and audience in terms of:◦ Business Industry (Primary et al.)◦ Business Function (Sales et al.)◦ Business location (Local et al.)◦ Business Primary needs (Demonstration, promotion etc.)◦ Business website Purpose◦ Business Audience

Task 17 – D1.1 – Define the Purpose and Audience of a Business with a website presence.

D1.1 – Implications of e-commerce – Benefits and Drawbacks


All website are structures online in different ways, stacked by goods, ranked in order of sales, separated into sales, support, demonstration, contact etc. Some have site maps, some have every link on one Page, some even have just one page.

Task 18 – D1.2 – Define the business structure of a corporate website and explain how this structure meets the needs of the target audience.

You will need to draw up and explain how a business. You will also need to create an outline site plan to show the structure. Take into consideration the W3C needs defined within the pages.

Task 19 – D1.2 – Define and illustrate the navigation structure, the site map, W3C considerations and style template of a corporate website.


Navigation Structure

Site map Housestyle W3C Considerations


All sites have their own way of promotion their goods or funding their presence by promoting others. You will need to research the methods your chosen corporation uses to promote their products on the internet.

Evidence should be shown of the research and should include a discussed range of:◦ Visual presentation◦ Banner Ads◦ Pop-ups◦ Email Marketing◦ SEO and SEM

You will also need to explain and evidence how it is hosted by evidencing domain tools here.

Task 20 – D1.3 – Produce a report on how a company promotes its goods and services via internet means.

D1.3 – Implications of e-commerce – Marketing and Promotion

http://whois.domaintools.com/


Obviously companies have gone online and have made use of their sites, it is rare for a company to withdraw their internet services. Using your chosen company discuss under the following terms, the benefits and drawbacks to the company of their web presence. Benefits

◦ wider target audience◦ more competitive◦ easier stock control◦ reduced overheads◦ immediate stock/availability check◦ access to goods globally◦ price comparison

Drawbacks ◦ fraud◦ delivery issues◦ internet access◦ choice◦ increased returns

D1.4 – Task 21 - Compare the benefits and drawbacks of e-commerce to an Organisation.


http://news.cnet.com/8301-1023_3-57616243-93/internet-ad-sales-climb-to-$10.7-billion/


Task 1 – P4.1 - Produce a report describing the risks and the measures employees/employers need to consider when dealing within data heldTask 2 – P4.2 - Produce a report describing how employees/employers are obliged to provide information to interested parties Task 3 – P4.3 - Produce a report describing the risks and the measures employees/employers need to take to prevent illegal use of resources.Task 4 – P4.4 - Produce a report describing the Computer Misuse Act, and what protections for e-commerce companies it provides.Task 5 – P4.5 - Produce a report describing the Consumer Credit Act, and what protections for e-commerce companies it provides.Task 6 – P4.6 - Produce a report describing the Consumer Protection Regulations, and what protections for e-commerce customers it provides.Task 7 – P4.7 - Produce a report describing the Trading Standards needs and what protections for e-commerce customers it provides.Task 8 – P4.8 - Produce a report describing the e-commerce regulations needs and what protections for e-commerce customers it provides.Task 9 – P5.1 – Describe the Social Benefits for Companies in terms of Marketing in having an On-Line presence.Task 10 – P5.2 – Describe the Social Benefits for Companies in terms of Business Functions in having an On-Line presence.

Task List


Task 11 – P5.3 – Describe the Social Benefits for Companies in terms of Customer Benefits in having an On-Line presence.



Task 14 – P5.6 – Describe the Social Negatives for Companies in terms of Socialisation in having an On-Line presence.

Task 15 – P5.7 – Describe the Social Negatives for Companies in terms of Employment changes in having an On-Line presence.

Task 16 – P5.8 – Describe the Social Negatives for Companies in terms of Fraud in having an On-Line presence.

Task 17 – D1.1 – Define the Purpose and Audience of a Business with a website presence.

Task 18 – D1.2 – Define the business structure of a corporate website and explain how this structure meets the needs of the target audience.

Task 19 – D1.2 – Define and illustrate the navigation structure, the site map , W3C considerations and style template of a corporate website.

Task 20 – D1.3 – Produce a report on how a company promotes its goods and services via internet means.

D1.4 – Task 21 - Compare the benefits and drawbacks of e-commerce to an Organisation.

Task List

e-commerce a/601/7313 level 3 lo4 - be able to plan e-commerce strategies

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