1.  Why is the performance of supply chains highly dependent upon the uncertainty  of the underlying product market? What have been the effects of the coronavirus pandemic upon uncertainty in many consumer-facing markets? What have been the corresponding effects on supply chain performance?

2.  “The office is obsolete”. Discuss the validity of this statement in the light of the recent surge in home working, caused by the coronavirus pandemic. Give reasons for your arguments.

3.  What security threats do organisations face in their e-business operations? Why are users (employees and consumers) often seen as security weak points? How do organisations use technological and management strategies to address security threats? Are these threats likely to reduce in the future?

4.  Discuss why dynamic pricing is a competitive weapon in the digital economy. Highlight the major challenges companies face when using dynamic pricing.  Justify your argument with examples.

5.  Discuss how ICT supports the generation of network effects. Provide examples to justify your answer.

6.  Discuss the major issues that managers must consider when defining an e- business strategy to support competitive advantage. Support your argument with relevant examples.

Planning your time in the examination

Without proper time  management you will  not  perform well even  if you  have properly revised the course and reached a good level of preparation. You must answer three questions out of six – no more and no fewer.

To answer three questions in three hours means that you should spend roughly 60 minutes on each question. It is surprisingly easy to spend more than an hour on a question that either you find interesting or one for which you have spent many hours in preparation. A common scenario is that instead of ‘answering the question’ (see below), you perform a ‘memory dump’ of everything you know about a topic area. This not only dilutes your answer but it also eats up the time and, before you know where you are, you have spent an hour and twenty minutes on one question.

If you do not properly distribute your time it will be difficult not only to do well but often to pass. If you answer only two questions or, as often happens, the third answer is presented in a bullet point form, it will be difficult to score well and even to pass the examination. Hence you must divide your time equally between the three questions you answer.

What are the examiners looking for?

Examiners are mainly looking for a critical analysis and discussion of the specific aspect,  strategy,  or  theory,  which   is  framed   in  the  examination  question. Candidates are expected to elaborate upon the material. The high marks, the distinctions, are granted to candidates who have clearly digested the material they have studied and used it to properly address the questions asked in the examination paper. If the answer is based on a perfect summary of the theory or subject, the examiners will not award a distinction grade and such an answer can also be a fail if the question is not specifically about the theory or the subject summarised. What  makes a very good answer is critical,  personal reflection, analysis of the subject and not the replication of definitions or abstract descriptions of related theories.

1. Do not live in the past

One of the attractions of e-business is that it is an exciting and dynamic area that is constantly changing. The downside of this is that many of the examples from the subject guide, textbook and articles quickly become out of date as new  services  are  introduced  and  old  ones  terminated.  Similarly,  some companies that were successful 10 years ago have since failed or been taken over. Although all writers try to keep their material up to date, this is not always possible and this provides you with an opportunity in the examination to quote  more recent examples and, provided that they are relevant, the examiners will give you extra credit for your contributions.

However, although some of the examples given by writers may ‘date’ fairly quickly, you should  not assume that the theory or conceptual framework contained in the article is similarly obsolete. The theories and frameworks emphasised in the subject guide, many of which are more than 20 years old, are remarkably good at standing the test of time and are still very relevant today.

Hence, you should develop your reading skills so that, when you read articles, you can easily distinguish between theoretical or conceptual issues that are still valid from example cases which may be losing their relevance. Similarly, you should also read widely in the management and practitioner literature to keep abreast of recent practical developments but you must ensure that you can link them to older theories.

2. Work steadily through the year

This course is a blend of a variety of disciplines, ranging from economics to information technology and from marketing to logistics, all within an overall context of information systems and management. This means that you cover a large area, made up of rather diverse elements, each one of which has its own, often rather different theories and paradigms. Some of the theoretical concepts, such as transaction cost economics, are quite difficult to grasp, either in terms of the theory itself or in terms of their range of application.

Hence, you are strongly advised to ‘think through’ and work through the material steadily through the year as you progress through the course. It’s important to do the reading for a topic at the time you are studying that topic. You need to reflect on and understand each topic and its theoretical base before you  move on to the  next topic.  Do  not  leave  all the  reading  and studying until just before the examination; then it will just appear to be a complex tangle and you are guaranteed to do badly.

3. Follow the subject guide

The examiners strongly recommend that your preparation for the examination focuses on reflecting upon the course material rather than writing summaries of it. The knowledge of theories is a pre-requisite to be able to answer the examination questions properly. To prepare effectively for the examination, candidates have to be acquainted with the logical and intellectual journey that is framed in the subject guide. This journey provides the proper logical link between the different topics addressed in the course. We strongly advise you to read the subject guide carefully and, where possible, discuss the material with fellow candidates before starting your wider reading. The subject guide provides the analytical framework, you need to be critical rather than relying on superficial factual knowledge.

The subject guide for this unit is a guide, not a summary of the readings. So the examiners expect and recommend that candidates read the subject guide and then study the readings for the course. The subject guide is a road map to address the complex subject matter of the course. Once you have properly prepared for the examination we strongly suggest you try to critically analyse real  experiences  or  cases   as  exercises  to   learn  how  to   address  the examination questions successfully.

4.   Answer the question that you are asked

The  most common  mistake made  by candidates is to fail to address the question asked. This is a remarkably easy trap to fall into for two particular reasons.  Firstly, you  may  have  spent  the weeks  before the  examination memorising  huge  chunks  of  the  subject  guide,  textbook  and  supporting articles. You arrive in the examination room with your brain overflowing with this stuff and you can’t wait to dump it down on your answer paper. The relief may be initially satisfying but the answer is very unlikely to score many marks as most of the material, although perhaps accurate and interesting in itself, will be irrelevant and will score very few marks. Examiners are not impressed by the breadth of your topic knowledge – they are looking for answers to the specific question.

The second scenario is when you have based your revision on examination questions from previous years. These are certainly important to study as they give you a good picture concerning the style of question you can expect. However, we do not repeat questions from one year to the next and, if you are  locked  into  last  year’s  questions,  there  is  the  danger  that,  like ‘old admirals’ you will ‘fight the last war and not the current one’. In other words, you answer  last year’s question and  not this year’s  one. Again, you will probably get very few marks for this approach.

This means that you should go into the examination prepared to think on the spot. In many ways, an examination is like a job interview. You probably know the sort of questions to expect and you can prepare little chunks of material beforehand; for example, the interviewer may ask for examples of your past leadership experience and it’s a good idea to have this prepared in advance. However, you cannot totally predict the interview questions and you should treat the examination in the same way. You certainly do need to prepare small chunks  of  material  concerning  e-business  but  you  must  be  prepared  to answer the question, through selecting relevant chunks and not just writing everything you know about a topic. Examiners, like interviewers, know full well when you’re beginning to ‘waffle around’ and you are unlikely either to be offered the job or to be awarded a high examination grade.

Many examination questions are multi-part questions, comprising a number of   sub-questions.   Normally,    it’s   best   to    answer   each   sub-question consecutively as you are less likely to miss a sub- question and hence lose marks. Similarly, if the question asks you to provide examples and discuss them, this must be done.  If you fail to do so, the answer is only partially answered.

Hence, you must directly address the question and you have to remember that the answer is marked in relation to the question and not to extraneous peripheral knowledge.

Key steps to improvement

From the above discussion, it follows that to do well in this unit you should follow the below points:

. Do not live in the past – keep up to date with recent developments in e- business and integrate them into your studies. Read frequently and widely.

. Work steadily through the year –  a ‘big  bang’ of revision of only  half- understood material just before the examination is doomed to fail.

. Follow the subject guide – use the subject guide as an essential road map to the often complex and confusing multi-disciplinary field of e-business.

. Answer the question that you have been asked – you must answer the question on the examination  paper, not one that you wish  is there. Give yourself time to think in the examination – don’t just write pages of irrelevant material for the whole three hours of the examination.

Examination revision strategy

Many candidates are disappointed to find that their examination performance is poorer than they expected. This can be due to a number of different reasons and the Examiners’ commentaries suggest ways of addressing common problems and improving your performance. We want to draw your attention to one particular failing – ‘question spotting’, that is, confining your examination preparation to a few question topics which have come up in past papers for the course. This can have very serious consequences.

We recognise that candidates may not cover all topics in the syllabus in the same depth, but you need to be aware that examiners are free to set questions on any aspect of the syllabus. This means that you need to study enough of the syllabus to enable you to answer the required number of examination questions.

The syllabus can be found in the Course information sheet in the section of the VLE dedicated to this course. You should read the syllabus very carefully and ensure  that  you  cover  sufficient  material  in  preparation  for  the  examination. Examiners will vary the topics and questions from year to year and may well set questions that have not appeared in past papers – every topic on the syllabus is a  legitimate  examination  target.  So  although  past  papers  can  be  helpful  in revision, you cannot assume that topics or specific questions that have come up in past examinations will occur again.

If you rely on a question spotting strategy, it is likely you will find yourself in difficulties when you sit the examination paper. We strongly advise you not to adopt this strategy.

Examiners’ commentaries 2022

(May)

IS3167 Management and innovation of e-business

Important note

This commentary reflects the examination and assessment arrangements for this course  in  the  academic  year  2021–2022.  The  format  and  structure  of  the examination may change in future years, and any such changes will be publicised on the virtual learning environment (VLE).

Information about the subject guide and the Essential reading references

Unless otherwise stated, all cross-references will be to the latest version of the subject guide (2018). You should always attempt to use the most recent edition of any Essential reading textbook, even if the commentary and/or online reading list and/or subject guide refer to an earlier edition. If different editions of Essential reading are listed, please check the VLE for reading supplements – if none are available, please use the contents list and index of the new edition to find the relevant section.

Comments on specific questions

Candidates  should  answer  THREE  of  the following SIX questions. All questions carry equal marks.

Question 1

Why  is  the  performance of  supply chains highly dependent upon the uncertainty of the underlying product market? What have been the effects of the coronavirus pandemic upon uncertainty in many consumer-facing markets?  What  have  been the corresponding effects on supply chain performance?

Approaching the question

Supply chain uncertainty is a complex phenomenon that involves different factors which  impact  the  ability  of  a  company  to  respond  to  demand  and  demand fluctuations  efficiently  and  timely.  Demand  uncertainty  is  associated  to  the fluctuations in the demand for goods. Demand can be stable for some products, but highly unpredictable for others. Beside demand fluctuation, supply chain as to  respond to  supply  uncertainty.  Supply  uncertainty  refers  to  the  difficulties companies face in procuring the inputs needed to effectively and efficiently deliver their goods. , Supply uncertainty can be the result of various factors such as weather conditions, availability of materials, or technological changes.

Coronavirus   pandemic   obviously   had   massive   impacts   on   supply   chain uncertainty, as lockdowns, labour shortages, and transport restrictions disrupted the  flow  of  goods  and  materials.  Also,  Coronavirus  has  changed  consumer behaviour. As a result the pandemic has also increased demand uncertainty, with some products experiencing surges in demand while others have seen reduced sales.

Therefore, the performance of lean supply chains has been particularly affected by the pandemic. Indeed, supply chains are optimised for low levels of uncertainty and  have  limited  resources  to  adapt  to  unexpected  changes.  Hence  the uncertainty created by the pandemic has severely challenged the ability of supply chains to provide efficient solution to business needs. Also, responsive supply chains, which are designed to be more flexible and adaptable to uncertainty, have been  challenged  by  the  disruptions  caused   by  the  pandemic.   Indeed,  the pandemic has created unexpected dynamics in both demand and supply that cannot be match by supply chains efficiently.

To cope with these challenges, companies need to invest in more responsive and agile supply chains that can quickly adapt to changing circumstances and mitigate the risks of uncertainty.

Question 2

“The office is obsolete”. Discuss the validity of this statement in the light of the recent surge in home working, caused by the coronavirus pandemic. Give reasons for your arguments.

Approaching the question

This question belongs to the domain of new organisational forms and is covered fairly comprehensively in the subject guide.

To answer the question, you need to appreciate the impact of remote working on organisation  dynamics.  Thus,  you  need  to  think  about  both  different  home working solutions and how they have offered new way to support and coordinate remote  working.  Secondly,  you  need  to  consider  to  whom  the  benefits  and drawbacks accrue: the employee, the employer and/or wider society. Something that may be a benefit to the employee may be a drawback to the employer (or society). The question is a straightforward one but you should not immediately focus  on  the  employee,  as  may  seem  natural,  but  you  should  consider  the benefits and drawbacks to the other stakeholders.

Another issue concerns the types of job for which remote working is appropriate. It may make perfect sense in consultancy but not in conventional retailing.

A good answer to this question would deal with all these aspects in a clear, objective and systematic fashion, without exaggerating either the benefits or the drawbacks.

Examples of employment contexts would also gain marks.

Question 3

What security threats do organisations face in their e-business operations? Why are users (employees and consumers) often seen as security weak points? How do organisations use technological and management strategies to address security threats? Are these threats likely to reduce in the future?

Approaching the question

This question asks you to focus on the problem of e-business security. Even if the  question  is  quite  simple  and  straightforward,  it  needs  to  be  properly addressed.  The  question  in  fact  poses  specific  emphases  on  e-business activities.  The  question  asks  you  to  discuss  the   security   risks  which  are associated with either B2C or B2B business settings and, more specifically, those which are caused by human and not technical challenges. E-business is always associated with a large set of technical and information related interdependencies but also to human and organisational ones.

The answer can also  be approached  by discussing the risks of opportunistic behaviour for the execution of e-business transactions and by highlighting how human errors or mistakes cannot  be avoided,  it does not matter the  level of technical security in place. E-business systems do indeed involve humans in their design, development and use. The problem of security of corporate information systems therefore needs to give particular attention to human related problems in the planning and management of information systems security. This requires consideration of the social context within which the technology is implemented and used. Moreover, the implementation of security measures always involves humans so that every security related aspect is directly or indirectly exposed to risks associated to unpredictable human behaviour.

This question is quite open to different approaches to the answer. You must however focus on the specificity of the e-business context while discussing the human threats to e-business.

A good answer will discuss the security challenges of e-business at a general level and will than focus on the human one. An excellent answer will discuss the differences  between  B2B  and  B2C  when  human  threats  and  problems  are concerned.

Chapter 10 of the subject guide offers a comprehensive analysis of the material which needs to be covered to answer this question. Chapter 11 of Chaffey (2009) offers an even more detailed account of this material.

Question 4

Discuss why dynamic pricing is a competitive weapon in the digital economy.  Highlight  the  major challenges companies face when using dynamic pricing. Justify your argument with examples.

Approaching the question

The implementation of dynamic pricing in the digital economy is eased by the reduction  of transaction  costs  companies face to  design  and  implement this pricing strategy. ICTs have reduced search costs, making it easier for sellers to obtain information about market conditions and consumer behaviour, especially pricing preferences and willingness to pay. The costs companies face to process this information have also been reduced, making it possible for sellers to analyse large amounts of data and define dynamic prices based on real-time demand. Large volumes of data and quick response are needed to set dynamic prices that maximise companies value creation.

In the digital economy markets are more open which means a larger number of customer and competitors needs to be accounted for when dynamic prices are set.  This  increase  uncertainty  and  demand  volatility  and  the  abundance  of information and the speed at which this information shall be processed. This environment creates opportunities for the adoption of dynamic pricing, as it allows companies to respond quickly to changes in demand and competition, and to capture more value from their customers.

However, dynamic pricing itself can also increase price uncertainty. Prices can change rapidly and unpredictably in response to market conditions which make even more challenging to set dynamic prices which deliver the executed value. This can create challenges for buyers and sellers alike, as they may struggle to anticipate future prices and make informed decisions.

Overall, the implementation of dynamic price policies in digital markets is more complicated and challenging than in physical markets. The rapid pace of change and the abundance of information increase the complexity of the dynamic pricing setting process. Companies need to invest in sophisticated pricing strategies and technologies, and to monitor market conditions closely, in order to succeed in this dynamic and uncertain environment.

Question 5

Discuss  how  ICT  supports the generation of network effects. Provide examples to justify your answer.

Approaching the question

Companies that compete in an environment where the value of goods in not defined by the quality of the product but rather by the level of its adoption and use, shall deploy a strategy that allows them to generate as  much value as possible by fostering the level of adoption and use of their services and products. This is the case for most of the companies that operate in the digital economy and indeed very well depict the competitive environment within which companies compete in e- business.

Digital technologies facilitate the emergency of network effect.

Network  effects  are  generated  by  critical  mass,  increasing  returns  of  scale, positive feedbacks and locks-in.

Critical mass occurs when the technology or the product reaches a certain level of  adoption,  which  make  valuable  for  most  users  or  consumers  to  use  the technology  or  product.  Increasing  returns  of  scale  occur  when   the  value generated by the use of consumption of certain technologies or product generate exponential value as the number of users increases. Positive feedback occurs when the benefits of using a technology or product  in association with other technologies or create a value generating circle.  Finally,  lock-in occurs when users incur in switching costs to adopt a different technology, use a different product.

Digital technologies have endogenous characteristics which positively impact the mechanisms by which network effects emerge and are consolidated.

Overall,  companies  operating   in  the  digital  economy   must  understand  the importance of the network effect and implement strategies that enable them to generate value by fostering the adoption and usage of their technologies and products.

Question 6

Discuss the major issues that managers must consider when defining an e- business   strategy   to   support   competitive   advantage.   Support   your argument with relevant examples.

Approaching the question

To generate competitive advantage in digital marketplace, managers must deploy strategies that exploit ICTs to differentiate their company from competitors in a way that generates value for customers and ultimately, for the company. When it comes to ICTs, managers must consider how their e-business strategy impacts their company's position in the competitive advantage and the resulting impact on the value created for customers.