Re: 2012 ZB Q5

[William Toh]

Your framework is good and sufficient, but you may have missed some points from the question.

While the question is framed from the sellers' point of view, it does not limit your discussion just the sell-side part of the transaction.

You should have a small section detailing why buyers may prefer to buy from these online businesses.  It is such interests that drive

sellers to want to open and operate e-markets to begin with.

Control costs are the costs of ensuring that exchanges are properly carried out in line with the terms of the contract.

From the buyer's point of view, it is to ensure they receive the goods/services as specified in the contract.

From the seller's point of view, it is to ensure that buyers make good their promise to pay, and that buyers do not abuse the product/service

against the terms of service.

From the above, you should be able to outline some examples within B2C or B2B contexts.

On Fri, Mar 30, 2018 at 9:43 PM, KEK FONG YEE (GUO FANGYU) <fygfk...@mymail.sim.edu.sg> wrote:

hi sir

i've done another isorg question, do you mind giving me some feedback on it?

i would also like to ask , How is control costs reduced for buyers and sellers in b2b and b2c context.

i am quite confused about what are control costs in the perspective of sellers especially.

thank you:)

"An increasing number of businesses are using the internet to sell products and services. Using TCT, explain from the perspective of companies the advantages of establishing internet mediated business."

 

 

1.what is e-business and e-commerce

• E-commerce is the process of buying and selling of goods/services/information electronically over network technologies.
• E-business is the company that does all these processes.
• A B2B business model allows businesses to interact with other businesses, and is a platform for businesses to find and transact with each other. B2b can be buyer centric, seller centric or intermediary centric
• B2C business model targets end consumers and is a channel for firms to reach out and deal with consumers directly.

 

2.Link of ebiz and tcm

• Involves two stakeholders who are value maximising and opportunistic economic agentsFor B2C to succeed, ICT need to reduce the frictions that prevent the transactions from happening -the transaction costs

• Although ICT have the ability to reduce search, contract and control cost,  it can only happen under specific conditions where ict help to mitigate the factors affecting transaction costs- BR, U,OB

• If not, ICT may increase TC which eventuallly leads to the failure of  b2c
• Using ICT itself is a TC, for the biz to be successful, need to reduce more tc that it incurs
• transaction costs are investments incurred by economic agents to reduce their uncertainty and BR surrounding the terms of economic exchange.
• explain what are search, contract and control costs
• TCM views technology as a means to reduce transaction costs so that exchanges can be made more efficient and encourage more economic activity 
• how ICT affects ebiz:act fuels growth of electronic marketplaces
• how the malone effects of ICT affect transaction costs

 

3.How ebiz reduce transaction costs from seller's perspective

• Search costs : b2b-firms and suppliers can easily find each other
• Contract costs: b2b-price transparency leads to reduced contract costs
• Example for b2b: alibaba.com, Baxter healthcare

 

• Search costs: b2c-able to reach out to more consumers so less marketing needed
• Contract  costs: reduced manpower and sales costs throught automated self help systems eg FAQ for consumers during online shopping experience
• Example for  b2c: amazon.com

 

4.How ebiz increases transaction costs for sellers

• B2b

• Increased TC due to building of infrastructure
• Increased switching costs due to lock in eg baxter healthcare
• Sellers may not like price transparency-may discourage them from joining the market

 

• B2c

• Increased TC due to building of infrastructure
• Risk of OB-credit card payment. Buyers may claim they did not make payment
• Privacy issues- info on the internet are vulnerable
• Increased BR- unable to directly clarify benefits with potential customers and they end up deciding based on price

 

 

How is control costs reduced for buyers and sellers in b2b and b2c context