ELECTRONIC COMMERCE (IT357)

 

BSc (HONOURS) IN COMPUTING

UNIVERSITY OF PORTSMOUTH

 

ELECTRONIC COMMERCE (IT357)

Assignment

tERM 1/2010

 

 

Instructions:

 

    Answer ALL questions.

    Marks will be awarded for good presentation, referencing and thoroughness in your approach.

• Make sure you have read the Turnitin instructions on the forum.
  

    NO marks will be awarded for the entire assignment if any part of it is found to be copied directly from printed materials or from another student.

• Ensure you have completed the following checklist.
  
• Complete this cover sheet and attach it to your assignment.
  

  
   

  
   

  
   

  
   

IGC coursework checklist	Tick when included
MS word or RTF document (not PDF)	*
Front cover attached	*
Student number on every page	*
Student number included in title	*
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References:-	*
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Reference list provided	*
Has an ECF been submitted for any reason

 

Student declaration:
I declare that:			I understand what is meant by plagiarism The implication of plagiarism have been explained to me by my institution This assignment is all my own work and I have acknowledged any use of the published or unpublished works of other people. In submitting this form and assignment I state that all work carried out is my own, in content, words and ideas, unless otherwise shown using correct citations and quotation marks. In checking the boxes above, I declare that these items have been checked and are correct.
Student's signature: …………don……………….					Date: …………2010.3.21……
Total number of pages including this cover page.						33
Submission Date		2010.3.21		Due Date		2010.3.21
Student's ID		47215		Class Code		IT357
Student's Full Name		Kalupathirannalage Don Duminda Nadeera Karunaratne
Lecturer's Name		Dr. Alice Good

OFFICIAL USE ONLY

MARKER'S COMMENTS
Marker's Name		Marks Awarded	/ 100

Part A

 

Business plans are written for many reasons. In this case and the most common reason is to acquire funding for the business from investors or banks.

 

    Harry Smith intends to write a business plan in order to get funding from the bank. In doing so will force Harry Smith to think of the future, set up achievable goals, look for and analyze competitors , figure out how to reach markets , and setting up a good revenue system. So we see the importance of business strategy, not the plan itself for the business to be successful. A successful e-commerce implementation will contain a dedicated payments system, a customer support system and customer relationship management procedures.

    

 

Figure 1(Porter, 2001)

 

 

 

Well the impact of the internet and e-commerce on a company's strategy and its profitability will differ from industry to industry. All the forces that shape competition in any given industry originated from one of five areas which are shown in figure 1. Interestingly according to the figure 1 (Porter, 2001) the internet make business less attractive for the owner since there are more (-) points than (+) points. But it's the other way round from the customers prospective

 

     According to the Strategic Planning Process firstly an analysis should be conducted on Globetrotter Organization and its environment. This should focus on the organizations missions, goals, strengths, weakness, and assessing competitor factors, business need in the market place, and also the owner's ability to meet the needs.

 

 

 

I have performed a SWOT analysis on the given scenario and the results are as follows,

 

 

 

 

 

 

    

I have analyzed and shown the services provided by GT to Customer and to Hotels in the figure 2.

 

 

 

 

 

 

 

Well analysing only on Strategic elements will not be sufficient, so we need to take a look at the Operational elements as well. I have given the company Mission statement, marketing plan, financial Plan and operations plan below.

 

 

Mission Statement

 

The mission of the organization should be attractive and motivational,

 

"To become the number one resources provider for the global traveller with the collaboration of a unique mix of hotels; offering trustworthy and accurate services at all time."

 

 

 

Marketing plan

 

With the increase in popularity of web sites that provide online reservations, customers have the opportunity to compare prices within seconds and they tempt to go for the best offer. (e.g.hotwire.com) so harry smith needs to offer all possible services to keep the customer base intact and to attract new customers.

 

 

 

 

 

 

 

 

 

 

 

 

Financial plan

 

Harry Smith intends to take a bank loan to bare the infrastructure costs. Granting the loan will depend on the revenue model.

 

Revenue model

 

The revenue model of Globetrotter is based on transaction fees where the company receives a commission on the volume of the transaction.

Harry Smith must come into agreements with the hotel owners on the commission fee per transaction and to offer the hotels at special rates. If harry Smith offers a Hotel Room for the same amount as the particular hotel offers it on its web site then there's no way of continuing with the business. A Possible revenue model is shown below,

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operational plan

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

• Also another option to consider is having a DR site in case of emergency.
  
• Accept payments using credit cards B2C from customer using a credit card processing (Gateway) e.g. merchant banks and the credit card interchange (Visa, MasterCard)
  
• So Harry Smith needs to create an merchant account which also includes signing contract with credit card companies (Visa ,MasterCard)
  
• Purchase a credit card processing software (cyber cash, cyber source, this will depend on the web site host)
  

 

 

Reference

• (2008, oct). Retrieved mar 2010, from Direct marketing assosiation: www.the-dma.org/cgi
  
• how-credit-card-transaction-works. (2006). Retrieved 3 12, 2010, from http://www.merchantmole.com: http://www.merchantmole.com/how-credit-card-transaction-works.php
  
• Porter, M. E. (2001). Steategy and the Internet. Harvard Business Review , 67.
  

 

 

 

 

 

 

 

 

 

 

 

Part B

Well as stated in the scenario the heart of the Globetrotting Hotels system is its website, the databases of customers and the clients. As a pure-play organization any competitor can run Globetrotter out from business if the intender manages to force the GT web site offline for a short period of time.

In an e-commerce environment attacks occur on two channels. Those been the Communication Path and the Asserts. (Key computers, network and information assert.)We will first consider on assets in the GT environment and then move on to the former.

Threats on Asserts

Firstly we must identify the key Asserts that are vulnerable to attacks within the GT scenario. (Assert Identification), then assess the risk (Risk Assessment) and then prioritize by probability (Implementation). (Efraim Turban, 2006). Table 1 shows the information regading the identified asserts.

 

 

The risks and protential threats against these asserts are both Technical and non-Technical. Non –Technical methods can be called as social enginearing methods which basicaly palys on human trust, on an individuals desire to help , an individuals fear in getting into trouble etc.

1. Social Engineering Threats
   

Kevin Mitnick the famous hacker once quoted that more than half of his attacks were carried out through social engenering methods. (Mitnick, 2002) Globettrotter emplyess might recive mails requestion sensitive information such as passwords etc.Or the intender can contact the employees as the ISP and request valuable information. According to Kevin its all about building trust and playing with human stupidity. (Mitnick, 2002) So certain positions in the GT scenario are valnarable for these types of attacks.

Combat Social Engeniaring

Harry Smith can focus on three aspects which are globaly followed to combat the issues.

• Education and Traning :
  

  Educate all staff members about the social engineering tecniques.
  

• Policies and Procedures :
  

  Develop certain rules to follow which guide the emplyees to respect confidality.
  

  • Penatration Testing:
    

    The policies ,procedures have to be tested by playing the role of a hacker and show the employees there weekness.
    

    
     

Also in the meantime Harry Smith needs to Physically secure the office premises as well. without going through much trouble woring about the technical aspects the intender can freely walk into the office and hack the web server or perform any kind of thef and go unnotice.

So Harry Smith needs to foucus on Access Control and Authendication tecniques.such as
All the emplyees schould be athondiated proir loging into the system,verfiy who and who are supposed to enter the server area, use security tools such as Passive Tokens, Active Tokens etc. implemention of securty camars. Boimetric Systems are also avilable but due to its high expensive nature Harry Smith can afford , not to consider it.

1. Technical Atacks
   

Moving into Technical Atacks on the asserts identified above , basically these type of attacks are done by programming code introduced to an Assert with the intention of recovering valuable information.

 

Table 2

 

 

 

 

 

 

 

 

 

 

 

Attacks on the Transmission Path

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securing E-commerce Communications for GT

    Loking at the amount of security threats It's certain for an e-commernce site to have a well planned network structure.I have implemeted a plan based on the "cloud computing " concept(http://communication.howstuffworks.com/cloud-computing.htm) for GT scenario.The basic network diagram is shown below(figure 1) and the process/components are been discribed later. A common example for cloud compunting is our email services.

What is the Process ?

 

 

 

The network infastructure is hosted on a 3^rd party Cloud Provider such as 3Tera, Appistry, Cassatt etc. It primarily consists of 3 major components the UTM, VmWare and the SAN. Those are been described in the following table.

Table 3

 

Security Mesures Taken..

• Since the web site is needed to be updated by Globetortter employees they have been provided with a Virtual Private Network inoder to get a speedy connection and also to secure the data transfer channel.
  
• Other transfer channels involving the customer,Hotels and the Merchant Bank are secured with SSL.
  
• The UTM component which is instaled in the Cloud has 8 applications related to security and network trafic. (shown in the above table) UTM is responsible for securering the servers as wel as minimisonf data trafic.
  
• Harry Smith needs to implement a Disaster Recovery site as well. having a extra site on another 3^rd party cloud is important,so that the DR site can take over if the first site fails.
  
• Security standered ISO 27001-0 is followed through out the process.
  

(10 reasons why Cloud Computing is the Wave of the Future: http://laptoplogic.com/resources/10-reasons-why-cloud-computing-is-the-wave-of-the-future)

Selecting a Payment System for GT

B2C(GT and customer) and B2B(GT and Hotels) are the two bussiness models in the GT scenario. There are many Online Payment Systems Avilable. I have criticaly discused Credit Card payment systems for the B2C transactions and Bank Transfers for B2B transactions below.

Using Credit Card Payments for B2C

(+) points

• This payment system has been widely accepted by consumers and merchants throughout the world, and by far the most popular methods of payments especially in the retail markets (Laudon and Traver, 2008).
  

  
   

• Advantages in using this method are privacy, integrity, compatibility, good transaction efficiency, acceptability, convenience, mobility, low financial risk and anonymity.
  
• Will Avoid the complexity associated with the digital cash or electronic cheques, consumers and vendors are also looking at credit card payments on the internet as one of possible time-tested alternative. (Singh Sumanjeet University of Delhi, 2009).
  

  
   

(-) points

• Online credit card payment seeks to address several limitations of online credit card payments for merchant including lack of authentication, repudiation of charges and credit card frauds.
  
• Consumer fears about using credit card such as having to reveal credit information at multiple sites and repeatedly having to communicate sensitive information over the Internet. (Singh Sumanjeet University of Delhi, 2009)
  

 

Figure 3 gives a basic idea on how Credit Card Payment works…

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

There are many Points to consider for Harry Smith when choosing a Merchant account, payment gateway, and a shopping cart. Firstly he should consider about the compatibility offered by each service provider. (Tips for chosing:http://www.tamingthebeast.net/articles2/back-end-ecommerce.htm)

 

Using Bank Wire Transfers for B2B

(+) points

• In the case of a bank-to-bank transfer, no actual cash is exchanged, but electronic balances in the respective accounts are adjusted accordingly.
  
• This is a very secure way to transfer funds, as positive identification of both account holders is required
  
• There is no chance of a charge back, unlike with a personal check.
  
• B2B payments are mostly monthly payments
  
• It's better to stay away from online payments when the transfer amounts are high.
  
• No Security vulnerability at any end (partner Hotel or GT) because the respective bank take care of it.
  
• Also Companies such as Western Union offer an alternate method of wire transfer. They maintain outlets worldwide which allows wire transfers between any outlets around the world.
  

 

Reference

• Das, R. (2010). Threats to E-Commerce Servers-Part I. Retrieved 3 15, 2010, from http://www.technologyexecutivesclub.com/Articles/security/artThreatstoEcommerceServers.php
  
• Erraim Turban. (2006). Security Risk Managment. In E. Turban, A Managerial Perspective for Electronic Commerce (pp. 512,513). Pearson.
  
• Laudon, C. Kenneth and Traver, Carol (2002), E-Commerce, New Delhi: Pearson Education.
  

 

• Mitnick, K. a. (2002). The Art Of Deception. New york: Willy.
  
• Singh Sumanjeet1 University of Delhi, I. (2009). Global Journal of International Business Research Vol. 2. No. 2. . EMERGENCE OF PAYMENT SYSTEMS IN THE AGE OF ELECTRONIC COMMERCE .
  

Part c

 

With the emergence of wireless and mobile devices e-commerce has been extended to a new application and research area, M-commerce which can be defined as the buying and selling of goods and services, using wireless hand-held devices such as mobile phones, Smart Phones, PDAs etc.

 

 

Well M-commerce is classified simply as an extension of e-commerce in the first paragraph but we can also regard m-commerce as an independent business field and consequently as an alternative mechanism to e-commerce as well. Figure 1 gives the Holistic approach of M-commerce according to Tiwari, 2007.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 1 A holistic perspective of m-commerce .source: Tiwari, 2007

Below I have discussed the Potential of adopting M-commerce strategy into GT and also its challenges.

Potential in adopting M-commerce to Globetrotter (GT)

 

    According to the scenario the whole system is based on a traveller and GT should be able to provide access to the web site regardless of the location, and deliver their service via mobile devices. Strengths off this approach in business and technological perspective would be.

High Reach ability: As Figure 3 represent the growth rate of mobile subscribers in comparison to desktop internet users and fixed line subscribers shows clear gap. So according to the stats GT will be able to increase their customer base at a rapid rate if Harry Smith decides to provide services via mobile devises.

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 2 source: Nua Surveys 2000

 

 

Figure 3 Source: ITU Telecommunications

 

 

 

High Mobility: Obviously the global traveller will not have access to a desktop internet connection at every time or at every location but since mobile devices are portable the travellers will take the devices wherever they go. So the customers can make real-time contact with GT regardless of the location.

 

High convenience and accessibility: it's convenient for Customers to operate in a wireless environment; all they need is an internet enabled mobile device. Services like GPRS and 3G offer 'always-on' connections to the Internet, so a mobile terminal can provide the customer with continuous links to the Internet.

 

Localization – Knowing the customers location is the key to provide relevant services and network service providers can localize the customers with the use of techniques as GPS, GSM or UMTS. With localization, GT can accurately provide their existing services such as Store Locator, Road Maps, Travel guides and Travel Planner and in the meantime concentrate on new services and market opportunities like Location Based Advertising (with the relationship of the local stores), Emergency Response Cell Phone Calls, Telemetries etc.

M-commerce opens new business opportunities by enabling innovative, location-based services (LBS) that the Internet cannot offer. (Thiwari, 2007)

 

Reduced Hardware Cost: Customers will have to use a WAP enable mobile device to access the GT service. E.g. Smart Phones. As shown in figure 4, Cost is reduced at a rapid rate on new technological gargets and the sales will grow rapidly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Also there are some other aspects which are empathized in figure 5 where Harry Smith will be able to focus on upon adopting M-Commerce strategy.

 

Capabilities of M-Commerce and its benefits

 

Individual Mobile services of similar kind can be bundled into applications. Table 1 shows some of those applications which are relevant to GT.

 

 

 

 

 

Having described various m-commerce applications, we need to take a look at the payment mechanisms possible for GT customers after the adoption of M-commerce. I have chosen 3 payment methods SMS Transactions Direct Mobile Billing and Mobile Web payments. Figure 6, 7, 8 empathize each method respectively.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 7

 

 

Figure 8

 

Figure 9

 

 

 

 

 

 

 

 

 

 

Challenges to GT and Users

 

Conclusion

We have clearly seen that mobile commerce is the birth of a brand new era open to endless possibilities for personal finance, trading and mobile transactions. Mobile phones will become a uniquely powerful distribution channel, available anywhere, anytime, in the palm of the consumer's hand. For Harry Smith it's always good to be the first mover than a follower into M-commence in order to expect a rapid growth in GT customer base.

 

 

 

Reference

• Tiwari, R. and Buse, S. (2007): The Mobile Commerce Prospects: A Strategic Analysis of Opportunities in the Banking Sector, Hamburg: Hamburg University Press, page 33.
  
• Schiff, J. L. ( 2010, March 11). Why-You-Need-a-Mobile-Web-Site. Retrieved from www.smallbusinesscomputing.com: http://www.smallbusinesscomputing.com/news/article.php/3870041/
  

  
   

 

Part D

Social media is a buzzword that is used to describe a variety of Web-based platforms, applications and technologies that enable people to socially interact with one another via the Web or Web 2.0.

Some examples of social media sites and applications include Facebook, YouTube, Del.icio.us, Twitter, Digg, blogs and other sites that have content largely contributed based on user participation that is, sites that organize and deliver user-generated content (UGC).(figure 1 shows a basic overview of Social Media)

 

Figure 1

Many businesses owners primarily focuses on getting listed in Google for no reason other than to drive Google's search traffic to their own Web space. Likewise most businesses are looking to leverage social media traffic to help their own sites and brands.

 

In the GT scenario Harry Smith can start with a company presence or profile on different, but appropriate, social media sites. Harry Smith can create a Fan page on Facebook, get his employees on LinkedIn, sign up for Twitter, or start submitting relevant articles and content to social bookmarking sites, like Digg and StumbleUpon. Also Harry Smith can use free blogs like Blogger to open a dialogue between him (business) and the customers.

 

 

The Influence of Social Networks

As mentioned in the scenario Harry Smith has intended to mainly focus on social networking to support Marketing. Here are some stats to back his decision. (Figure 2)

 

Plus Points in Adopting Social Network Marketing for Globetrotter

• Research ideas, and learn more about what customers and prospects are saying about their needs and experiences on GT.
  
• Gain new market and competitive insights to improve your products and services.
  
• Create and join conversations with customers, prospects, partners and other constituents about key issues and concerns.
  
• Create positive word-of-mouth about your products and services.
  
• Grow your company's reputation as a thought leader.
  
• 
  
• Able to keep a pulse on what people are saying about GT (good or bad), competitors and major trends.
  
• Able to represent GT in a positive, authentic way.
  
• Harry Smith can build credibility for his expertise and business and link to customers and prospects quickly.
  
• Ability to minimize damage from negative comments (customer blogs etc) about GT by quickly responding to complaints.
  
• Steer people to other marketing programs within and outside GT.(easier to individually track and manage individual customer)
  
• Promote new launches and products.
  

 

Minus Points

• The businesses are engaged in social media and if GT gets comments and posts that are not positive that will harm the company's reputation. (Social media links can travel fast and bad news even faster)
  
• Customers/Fans will get hurt if they don't get any responses to their posts. So GT has to increase the man power to keep the customers satisfied as the fan base grows.
  

 

Some Points to consider for Harry Smith, upon and after Implementing Social Network Marketing to GT.

 

• Upon implementing a fan page or similar account in a popular web site Harry Smith should look for spaces where the customers have already formed the social glue that holds online relationships together, so you don't have to create a new space.
  

  
   

  
   

• Linking up the profile pages. (E.g. include a link to your blog or Web site on Twitter profile.) Also By linking the profiles, with one update GT will be able to blast the message to multiple social sites. (Twitter application lets your Tweets become your Face book status update)
  

 

Figure 4

 

 

 

• Be Open, Honest, and a Little Social. The employee or Harry Smith should let the fans know that he represent a business but there's also a person behind.
  

  
   

• Harry Smith needs to make sure that staff members will continue to update these pages with fresh posts and Give a reason for customers to show up.(special offers .etc)
  
• 
  

 

• Merge Social Media With other Advertising techniques like
  Google search engine optimism, email marketing, newsletters etc.
  

 

• Optimize RSS feed to personal pages. With RSS feed it's possible distribute your content to other sites and share to other users.
  

 

 

Out of the many possible social media channels I have chosen Facebook and Twitter as Main Marketing Options for GT. Figure 6 and 7 will backup my decision.

 

 

 

 

 

 

 

 

Figure 6 cont…

 

 

Reference

 

• Beal, V. ( 2009, February 5). How-To Guide: E-Commerce Marketing on Facebook. Retrieved from www.ecommerce-guide.com: http://www.ecommerce-guide.com/solutions/advertising/article.php/3800976
  
• Beal, V. (2010, Jan 26). Top-5-Social-Networking-Tips-You-Need-to-Know. Retrieved from www.smallbusinesscomputing.com: http://www.smallbusinesscomputing.com/emarketing/article.php/3860766/Top-5-Social-Networking-Tips-You-Need-to-Know
  
• Corbin, K. ( 2010, March 17). Social-Networking-is-King-Facebook-Edges-Google. Retrieved from www.smallbusinesscomputing.com: http://www.smallbusinesscomputing.com/news/article.php/3871186/Social-Networking-is-King-Facebook-Edges-Google.htm
  
• Erraim Turban. (2006). Security Risk Managment. In E. Turban, A Managerial Perspective for Electronic Commerce. Pearson.