TEXT BOOK: Schneider, GP 2015, Electronic commerce, 11th edition

MODULE 1 CHAPTER 1

REVIEW QUESTIONS

1. Briefly describe the technologies that led businesses into the second wave of electronic commerce.

2. Briefly describe the specific activities that a computer assembly operation might include in B2B electronic commerce for its supply management or procurement operations.

3. Many business analysts have discussed the concept of the first-mover advantage. What are some of the disadvantages of being a first mover?

CASE STUDY C1 CRITICAL THINKING QUESTIONS

1. Toys"R"Us sales exceeded $300 million by 2004 on the Amazon.com site. Explain how Amazon, Toys"R"Us, and other toy sellers who participated in Amazon's Marketplace retailer program benefitted from the network effect as a result of the relationship between Amazon and Toys"R"Us.

2. In 2004, Toys"R"Us sued Amazon.com for violating terms of the agreement between the companies; specifically, Toys"R"Us objected to Amazon.com's permitting Amazon Market-place retailers to sell toys. (Note: When the lawsuit was filed, Amazon Marketplace was called "zShops.") Amazon.com responded by filing a countersuit. After more than two years of litigation, a New Jersey Superior Court judge ruled that the agreement had been violated by both parties. The judge ordered that the agreement be terminated and denied both companies' claims for monetary damages. Amazon.com appealed the ruling. In 2009, an appellate court affirmed the lower court ruling but reversed the ruling on damages, which had awarded Toys"R"Us $93 million plus interest. In June 2009, the two companies finally agreed in an out-of-court settlement that Amazon.com would pay damages of $51 million.

Use your favourite search engine and the Web Links for Case C1 to review the courts' findings and rulings. Identify the advantages and disadvantages that Amazon.com should have considered before it entered into the agreement with Toys"R"Us.

3. In 2009, Amazon.com purchased Zappos, a highly successful shoe retailer that was started in 1999. Since the purchase, Amazon.com has kept Zappos operating under its own brand as a separate Web site. Discuss a possible rationale for Amazon.com's decision not to subsume Zappos operations into the Amazon.com Web site.

4. In 1998, Amazon.com purchased the Internet Movie Database for a substantial, but undisclosed, sum. The site offers reviews of movies and information about movies, actors, directors, and others involved in the filmmaking business. The site does not charge membership fees (except for a small area of the site reserved for people who work in the film industry, called IMDbPro, which does not generate a substantial amount of revenue for Amazon.com). Discuss why Amazon.com might have purchased this Web site and explain how it benefits from owning the site today.