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Summary Activity 4.8.1 Answers
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Activity 4.8.1 Answers for IBM Textbook with ISBN 4
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Activity 4.8.1: E-COMMERCE ON THE INCREASE1. Define the term “e-commerce”.
The term ‘e-commerce’ refers to the buying and selling of goods through the
internet, in other words, online.
2. Describe how Currys has used business-to-consumer e-commerce to market its
products.
Currys have decided to close down many of its physical stores and shift into using the
internet, allowing their customers to see their product catalogue and make
purchases online. When consumers make a purchase, they can simply place an
address to deliver their purchased products to. In short, everything is done online,
through the internet.
3. Analyze a potential benefit to Burberry of using e-commerce to market its
products.
One potential benefit to using e-commerce would be the massive exposure Burberry
could get in a very short amount of time. With more exposure in less time, there will
be higher chances for Burberry to increase its sales and expand its customer base.
Another benefit would be the reduced cost for not having to pay the cost of opening
physical stores.
4. Evaluate Dixons’ decision to close its high-street shops and to go ‘fully online’ as
the only method of selling its products.
E-commerce refers to the buying and selling of goods through the internet, in others
words, online. In this context, Dixons, a major retailer of electrical products, have
decided to close its high-street shops and go fully online to sell its products. This
decision of Dixons’ certainly would bring both advantages and disadvantages to the
business.
One advantage to going fully online and closing its physical stores would be the
reduced costs. As Dixons decide to close its physical stores, they would not have to
pay of the rent of the building, the electricity bill or any repair fees for the building or
furniture. This, in turn, would allow Dixons to save its capital and use it for better
purposes to develop its business further. Considering Dixon is a major retailer, going
online would also mean a reduction in the number of employees, hence a reduction
in costs as well. This is mainly because when opening physical stores, Dixons should
employ sufficient employees to be responsible in taking care of each store whereas
going online, Dixons would be more focused on hiring employees in its headquarters
to handle the purchases, management and deliveries.
Another advantage to going fully online would be the exposure Dixons could receive
in a short period of time. Though Dixons is a UK retailer, going online would give
Dixons the opportunity to reach a larger audience, perhaps customers from
overseas. In addition, with the advancement of technology, more people are shifting
towards online retailing, with the UK increased by 22% in 2013 when compared with
high-street sales growth of 1.8%. Thus, going online could help Dixons in maximizing
its profitability as more customers are shifting towards online retailers.
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