E-Commerce
A/601/7313
LEVEL 3
LO4 - Be able to plan e-commerce
strategies
Learning Outcome (LO)
The learner will:
Pass
The assessment criteria are the
pass requirements for this unit.
The learner can:
1
Know the technologies
required for an ecommerce system
P1
Describe the technologies
required for e-commerce
2
Understand the impact
of e-commerce on
organisations
P2
Explain the impact of
introducing an ecommerce system to an
organisation
M1 - Describe how
organisations promote
their business using ecommerce
3
Understand the effects
of e-commerce on
society
P3
Explain the potential risks
to an organisation of
committing to an ecommerce system
M2 - Explain solutions
for the potential risks
of using e-commerce
4
Be able to plan ecommerce strategies
P4
Review the regulations
governing e-commerce
P5
Examine the social
implications of ecommerce on society
P6
Plan an e-commerce
strategy
Scenario
Criteria
Tasks
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Merit
For merit the evidence
must show that, in
addition to the pass
criteria, the learner is
able to:
Distinction
For distinction the
evidence must show that,
in addition to the pass
and merit criteria, the
learner is able to:
D1 - Compare the
benefits and drawbacks
of e-commerce to an
Organisation
M3 - Provide annotated
planning
documentation for your
e-commerce strategy
12
13
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D2 - Evaluate your
e-commerce strategy
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21
Assessment
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Scenario
P4 - Be able to plan e-commerce strategies
Learners are required to understand the different legislations associated with having an
e-commerce site. They should be taught the different legislation and regulations that
apply to e-commerce, the purpose and benefits of them and they should be
encouraged to refer to the relevant websites and find out more details as to what the
legislations specifically covers. Activities to help them research the legislations could be
provided along with a quiz to check that they have understood what they have found
out.
P5 – Examine the social implications of e-commerce on society
Learners need to understand social implications of the increasing move towards
becoming an e-commerce society, which could be set as research activities. Learners
could be asked to identify as many social implications as they can and these can then
be distributed to learners in small groups or pairs for further research. The small
groups/pairs could then be encouraged to provide feedback to the main group.
Learners working in small teams could also be asked to identify a selection of benefits
and drawbacks for customers of using e-commerce sites.
D1 - Compare the benefits and drawbacks of e-commerce to an Organisation
Learners should be encouraged to research a selection of e-commerce website
interfaces. They should then use an example business (this could be provided) to help
them research what the business is, the purpose and target audience for the website,
how the business is structured online, creating an outline site plan to show the
structure, how it is promoted and hosted. Learners should be encouraged to research
W3C and what this means.
Criteria
Tasks
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Assessment
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Scenario
P4 - The assessment criterion P4 could be evidenced by the use of a
report, leaflet or presentation delivered by the learner that could be
supported by tutor observation and/or recorded evidence. The learner is
required to review and explain the different regulations to include
legislation that affect e-commerce websites. They must briefly cover all
of the legislation and regulations outlined in the teaching content,
explaining what they are and their purpose.
P5 - The assessment criterion P5 could be evidenced by the use of a
report, leaflet or presentation delivered by the learner that could be
supported by tutor observation and/or recorded evidence. The learner is
required to examine the social implications of an e-commerce society
and must explain at least four social implications that e-commerce has
on society.
D1 - The distinction criterion D1 can be evidenced by the learner
providing a comprehensive comparison of the benefits and drawbacks of
e-commerce to an organisation. Learners must include all of the benefits
and drawbacks outlined in the teaching content and expand on these.
Criteria
Tasks
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Assessment
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Scenario
As stated earlier in the project, there are Laws that apply to trading online that do
not apply offline and any company with a web presence needs to be aware and
abide by these. Each law is designed to protect a specific issue, either data, good
protection, theft, deliberate sabotage, infringements of rights and expected
setting of standards.
These laws are the most common, but there are other smaller laws that surround
specific Internet issues, like the selling of food, the transport of animals, tax
specifics, sales to overseas, sale of weapons, age restricted sales, trading rights
etc. Just like ordinary society these become more self aware when a business has
been around for a while.
Legislation and Regulations
◦ Data Protection Act 1998
◦ Freedom of Information Act 2000
◦ Computer Misuse Act 1990
◦ Copyright legislation
◦ Consumer Credit Act 1974
◦ Trading Standards
◦ Distance selling 2000
◦ e-commerce regulations 2002.
Criteria
Tasks
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Assessment
Why it is necessary
 Hacking has been around almost as long as the Internet; some
people just love to try and break into a computer system.
 Prior to 1990, there was no legislation in place to tackle the
problems caused by hacking. Although everyone knew that it was
wrong and should be against the law, there was nothing that
anyone could do about it.
 As the problem grew, it became apparent that specific legislation
was needed to enable hackers to be prosecuted under the law.
So, in 1990, the Computer Misuse Act was passed.
 The Computer Misuse Act (1990) recognised the following new
offences:
◦ Unauthorised access to computer material
◦ Unauthorised access with intent to commit or facilitate a crime
◦ Unauthorised modification of computer material.
◦ Making, supplying or obtaining anything which can be used in
computer misuse offences.
Scenario
Criteria
Tasks
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Assessment
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Scenario
At the end of the day the Computer Misuse Act is there to
prevent unauthorised access or damage. The things that it covers
without mentioning the names include Viruses (creating and
planting), Hacking (internally and externally) DDOS, Spam and
Junk emails, directed damage to systems with the intent on
causing any slowdown or hindrance to companies.
Despite the 30 years of attempting stopping, hacking and Viruses
still happen to this day. Virus checkers, firewalls, constant
upgrades and preventative measures like SSL still have
weaknesses that can leave companies vulnerable.
The Computer Misuse Act does not prevent the damage but is
there to punish those caught. The Act only applies to Britain,
every other country has their own versions but some countries do
not have any.
Task 4 – P4.4 - Produce a report describing the Computer Misuse
Act, and what protections for e-commerce companies it provides.
Criteria
Tasks
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Assessment
The Consumer Protection (Distance Selling) Regulations 2005
If you sell online, by mail order or by telephone to consumers, then
this applies to your business. These regulations do not apply to
business to business transactions. Key points to note:
 You should provide clear information about your offering before
purchase (no extras like tax and freight after the consumer has
decided to purchase). It is helpful to be very clear what your
freight charges are and whether prices include VAT to avoid doubt
 You should provide a written confirmation of order following
purchase
 There is a "cooling off" period of 7 working days for most goods
(exclusions could include perishable or digital goods). You should
inform the customers of their right to cancel (without charge,
other than return freight). For more information click here.
Task 6 – P4.6 - Produce a report describing the Consumer
Protection Regulations, and what protections for e-commerce
customers it provides.
Scenario
Criteria
Tasks
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Assessment
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24 Hour global presence
◦ Online businesses are always available for browsing, shopping, checking or any other
service they offer, irrespective of time or location allowing a massive potential market.
Flexibility of location (International business from a local shop)
◦ Websites can be viewed or stored anywhere and therefore e-businesses are not location
dependant unlike traditional high street stores. This allows businesses to be located in
areas suited to the organisation. Sometimes the government offer grants for location to
areas of high unemployment.
Personalisation of promotion
◦ Websites store what customers have purchased and browsed, this information can be used
to perform targeted marketing, where promotions will be offered depending on what has
been bought in the past. This should mean a more relevant marketing strategy.
Feedback from customers
◦ All feedback is useful for business and the internet provides a useful tool for gathering this
from customers who perhaps would not have done so through face to face communication.
This information if valuable if used to improve the e-business services being offered.
Techniques include, forms, online questionnaires and email. Sometimes feedback can be
given about the products the organisation sells.
Data collection and use in re-formulating the marketing mix.
◦ As mentioned, information is very valuable but only if used and acted upon. Data should
be used to change and develop the marketing mix – Price, Product, Promotion and place.
See also extended marketing mix (7ps)
Scenario
Criteria
Tasks
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Assessment
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Opportunities for competitor analysis
◦ Due to the visibility of businesses using the internet it is both easy and useful to
analyse ones competitors. Comparing prices, the service given, look, feel and
functionality of other websites are all useful.
◦ However the watched are also watchers and due to this transparency all
businesses on the internet should take advantage of understanding their
competitors as well. The use of comparison websites are also a useful tool.
Opportunities to communicate with customers.
◦ Businesses should take every opportunity to communication over the internet
with their customers. Internet chat (text) can enable a one to one dialogue to
enable a personalised service much like a sales assistant within a shop.
◦ FAQs, email invitations, news, bulletin boards, discussion rooms and many
other methods can be used to communication with customers and potential
customers. The easier and unobtrusive this is made the more likely customers
will use it.
Task 9 – P5.1 – Describe the Social Benefits for Companies in terms of Marketing in
having an On-Line presence.
Scenario
24 Hour global
presence
Flexibility of location
Data collection for
marketing
Opportunities for
competitor analysis
Criteria
Tasks
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Personalisation of
promotion
Feedback from
customers
Opportunities to communicate with
customers.
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Assessment
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Scenario
Reduced requirement for premises
◦ Traditional shops need to keep stock on show and be able to replenish
this when customer buy. They also need space for customers to
browse both of which are less important for e-businesses. In some
instances stock can be sent straight from manufacturers or
wholesalers to the customer eliminating the need for any stock to be
stored by the e-business at all, although most e-businesses still carry
a supply of stock.
Flexibility of location
◦ As mentioned previously the need to be located in a particular area for
most online businesses is low which allows businesses to chose cost
effective areas to locate their business.
Reduced staffing costs
◦ E-businesses can rationalise staff by automating many of the
functions performed through a business transaction. For example –
re-ordering of stock, payment processing could be completely
automatic and other functions such as maintenance of the website,
customer service can be done with far fewer staff thanks to
technology.
Criteria
Tasks
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Assessment
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Cash flow advantages
◦ Instead of having to purchase lots of stock, and keep that stock sitting
in a warehouse and on shelves of a shop, stock can be ordered using a
JIT principle or be dispatched straight from the supplier to the
customer. This means that the businesses cash is not tied up in stock
and can be used for other purposes.
Advantages of disintermediation of supply chain
◦ Disintermediation is the process of cutting down the stages a product
or service goes through before it gets to the customer. Traditionally
shops would buy from a wholesaler who in turn buys from the
manufacturer. This meant slower product delivery times and more
expense passed onto the customer.
◦ Research other advantages of disintermediation.
Task 10 – P5.2 – Describe the Social Benefits for Companies in terms of
Business Functions in having an On-Line presence.
Reduced requirement
for premises
Flexibility of location
Cash flow advantages
Scenario
Criteria
Tasks
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Reduced staffing costs
Advantages of disintermediation of supply chain
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Assessment
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Scenario
24 hour availability
◦ Customers can now browse, purchase, enquire, compare and other
activities when ever they wish.
Easier cost/product comparisons
◦ Instead of walking around shops noting down prices and features of
potential products, or ringing around or even having sales people visit
customers can research the products very easily online with very little
effort. Sometime product comparisons are offered within retailer
websites. Customers can also sometimes use price/product/service
comparison websites such as pricerunner, moneysupermarket and
many others.
Personalised offers
◦ Many e-businesses can personalise shopping experiences based on
browsing or purchase history which in turn can offer promotions
based on these. For example buy Jimmy Cools CD and get 10% off his
concert DVD.
 Examples include - Favourites – Tesco.com and Recommendations –
Amazon.com
Criteria
Tasks
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Assessment
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Lower prices
◦ Due to many different factors previously mentioned –
rationalisation of staff, disintermediation, less reliance on
location e-businesses can offer lower prices. This is certainly
true of businesses offering digital distribution which eliminates
any medium (CD/DVD etc) or logistic costs.
◦ Many firms instead of offering lower prices offer an ISP or
Internet Value Proposition which adds value without adding
price. For example an extended warranty, free installation or
other value adding incentives to buy from them.
Task 11 – P5.3 – Describe the Social Benefits for Companies in
terms of Customer Benefits in having an On-Line presence.
24 hour availability
Scenario
Criteria
Tasks
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Easier cost/product
comparisons
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Personalised offers
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Lower prices
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Assessment
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Scenario
Customer and user expectations of web access.
◦ Customers have high expectations of their internet shopping
experience which can lead to online companies having to try very hard
to please these customers.
◦ Providing new experiences has led to many innovations such as
streaming video previews of films and music, 3D representations of
products, feedback and reviews from purchasers of these products etc.
◦ This has a knock on effect of smaller businesses not being able to
compete with the larger better resourced organisations.
Increased competition
◦ Due to the relatively low entrance cost to e-business, competition has
increased dramatically, couple this with the confidence the market has
especially learning from the mistakes of the past
◦ However this competition is not just from new entrants to the market
but also from existing e-businesses trying to gain market share from
their competitors.
◦ It is also worth noting that competition can now be global for certain
products and services.
Criteria
Tasks
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Assessment
New providers for old services
◦ Traditionally if you wanted to buy or listen to music you
would visit a shop and purchase a CD. Now you have many
different choices, visiting an online store to buy a CD,
visiting an online store and downloading the CD (legally of
course). How we have our services provided is changing
even the simple telephone call is evolving using the internet.
◦ This can have an impact on the way a business needs to
present itself, hardware outlay, new demonstration methods,
deskilling, and still can barely compete
◦ Examples include:
 Music, VOiP, Shopping, Films and Software
Task 12 – P5.4 – Describe the Social Negatives for Companies in
terms of Changing Business Methods in having an On-Line
presence.
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Customer and user
expectations of web access.
Scenario
Criteria
Tasks
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Increased competition
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New providers for old
services
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Assessment
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Scenario
Competitive pressures
◦ As mentioned earlier the pressure due to the expectations of
customers are very high which means certain businesses can not keep
up with customer expectations and still remain profitable. This could
cause customers to use competitors website.
Closures
◦ Closures are inevitable and occur due to many different reasons.
Ultimately it means that the businesses will cease to trade and exist.
Mergers
◦ Mergers are the joining of two or more organisations. There are many
different reasons mergers take place. It could be the result of two
companies wishing to challenge the dominance of another company or
both companies agreeing that together they could take advantage of
each others unique strengths and become stronger due to the union.
◦ Research what mergers are and why they take place, could this happen
to your businesses.
Criteria
Tasks
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Assessment
Take overs
◦ This occurs when one firm buys out another and assumes
strategic control over them. Things change, people, premises,
departments merge, jobs can be lost. Sometimes companies
even close to make room for new management ideas and staff.
 Re-focusing of business
◦ Changing the focus of the business by perhaps shifting from
selling one particular product or service to selling others.
◦ Examples include
 Play and Amazon selling digtial downloads, both moving into
allowing customers to sell their own products like Ebay.
 Ebay buying Paypal and Skype.
Task 13 – P5.5 – Describe the Functional Threats for Companies in
terms of Changing Business Methods in having an On-Line presence.
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Competitive
pressures
Scenario
Criteria
Tasks
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Closures
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Mergers
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Take overs
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Re-focusing
of business
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Assessment
Employability and ICT skill requirements
 Understanding how to use a computer is essential in most jobs to a
greater or lesser degree. Many jobs opportunities will simply not be
available without some degree of computing skill.
Increase in flexible working models
 Secondments – Some staff are taking extended leave to pursue other
interests. This leads in the need for contracted staff to fill the gap.
 Contracting – Employment is changing, it is getting rarer for employment
to be fulltime, instead many of the core workforce of an organisation is
contracted on rolling contracts lasting anywhere from monthly to 18 or
24 month contracts. This leads to a transient workforce working where
their skills are required.
Isolation and lack of Social Interaction
 More and more people are shopping from home, playing games form
home, working from home, and this is taking away the social skills
needed for life. It is possible now to live completely at home without
leaving the comfort of the house, paying bills, ordering food, making a
living, social networking. This reduction in face to face communication
causes a negative socialisation effect on society.
Scenario
Criteria
Tasks
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Assessment
Closure of High Street Sites
◦ Traditional high street shops have had to respond and will continue to in
order to survive against online organisations. This has lead to some loss
of traditional shops and service providers. However many traditional
shops have had to adapt and adapt quickly or face bankruptcy.
◦ Will we ever be in a position where high street shops are a rarity and
online shops are the norm?
 Keeping up with technology in order to use e-commerce sites
◦ The move towards online dominance could lead to a very real need to be
technically literate in order to take full advantage of the services being
offered.
◦ It could be argued that if the service provider is doing its job correctly the
interface would be intuitive and very easy to access but perhaps not all
service will be this accessible?
Task 14 – P5.6 – Describe the Social Negatives for Companies in terms of
Socialisation in having an On-Line presence.

Keeping up with technology
Closure of High Street Sites
Scenario
Criteria
Tasks
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Isolation and lack of
Social Interaction
Increase in flexible
working models
Employability and ICT skill requirements
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Assessment
Changes in employment
 When was the last time you saw a blacksmith, a cooper, do you know a baker
other than Greggs. Changes in the way the Society has happened has meant a
loss of old skills as well as the rise in un-laboured employment. There was a
time when 25000 people worked on the floor of Ford in Luton, they have
since been replaced by ten, and more cars are being made because of this.
Similarly the Internet has meant the reduction of high street shopping, there
are now more people working in Amazon’s warehouse putting things into
trolleys than working in the Car industry in the whole of Luton.
De-skilling
 Technology has allowed many mundane, boring and repetitive jobs to be
taken away from human beings. However technology has also taken some
highly skilled jobs from craftsman.
Re-skilling
 De-skilling has lead to many people re-skilling themselves with other
desirable skills. These include programming, maintenance, component and
circuit boards creation and many others.
Task 15 – P5.7 – Describe the Social Negatives for Companies in terms of
Employment changes in having an On-Line presence.
Changes in employment
Scenario
Criteria
Tasks
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De-skilling
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Re-skilling
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Assessment
Credit Cards Stolen
 When a member of staff steals a credit card from a customer in a shop, they
rob one person, when companies like PayPal and Sony had their cards stolen,
tens of thousands were robbed. Money was returned, this is the nature of
credit cards but Interests go up in comparison. The Internet has not led to
more crime, it has led to bigger crime.
Products not as described
 In a shop you can return it if it is not right, you can check it out, try it on,
products need to be described under the Sale of Goods Act but on the
Internet this has become more hazy. Click here for an example. They are still
covered under the Sale of Goods Act but it is more difficult to prosecute.
Delivery Issues
 The biggest thing putting people off shopping is delivery times. Some goods
take weeks to arrive, problems with companies, with distributers etc. There is
no guarantee with the Internet when things arrive or the condition. Click here
for Amazon’s problems.
Task 16 – P5.8 – Describe the Social Negatives for Companies in terms of Fraud
in having an On-Line presence.
Credit Cards Stolen
Scenario
Criteria
Tasks
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Products not as described
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Delivery Issue
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Assessment
All websites have a function, some as informational needs, some as sales, some
as support. Like any company they have a function and an end need. The more
professional they are, the more they will have a defined business objective and
the more their website will help them meet that objective.
 Using an example of a commercial website with and off-line premises you will
need to examine the purpose of what the business is, the target audience for the
website.
 This website needs to have more than one page, have existed for some time, have
their website compliment their off-line services. The company can be local,
national, international or global. It can be from a Primary, Secondary or Tertiary
company.
◦ Define the company Purpose and audience in terms of:
◦ Business Industry (Primary et al.)
◦ Business Function (Sales et al.)
◦ Business location (Local et al.)
◦ Business Primary needs (Demonstration, promotion etc.)
◦ Business website Purpose
◦ Business Audience
Task 17 – D1.1 – Define the Purpose and Audience of a Business with a website
presence.
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Scenario
Criteria
Tasks
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Assessment
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All website are structures online in different ways, stacked by
goods, ranked in order of sales, separated into sales, support,
demonstration, contact etc. Some have site maps, some have
every link on one Page, some even have just one page.
Task 18 – D1.2 – Define the business structure of a corporate
website and explain how this structure meets the needs of the
target audience.
You will need to draw up and explain how a business. You will
also need to create an outline site plan to show the structure.
Take into consideration the W3C needs defined within the
pages.
Task 19 – D1.2 – Define and illustrate the navigation structure,
the site map, W3C considerations and style template of a
corporate website.
Navigation Structure
Scenario
Criteria
Tasks
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Site map
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Housestyle
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W3C Considerations
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Assessment
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Scenario
All sites have their own way of promotion their goods or
funding their presence by promoting others. You will need
to research the methods your chosen corporation uses to
promote their products on the internet.
Evidence should be shown of the research and should
include a discussed range of:
◦ Visual presentation
◦ Banner Ads
◦ Pop-ups
◦ Email Marketing
◦ SEO and SEM
You will also need to explain and evidence how it is hosted
by evidencing domain tools here.
Task 20 – D1.3 – Produce a report on how a company
promotes its goods and services via internet means.
Criteria
Tasks
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Assessment
Obviously companies have gone online and have made
use of their sites, it is rare for a company to withdraw
their internet services. Using your chosen company
discuss under the following terms, the benefits and
drawbacks to the company of their web presence.
 Benefits
◦ wider target audience
◦ more competitive
◦ easier stock control
◦ reduced overheads
◦ immediate stock/availability check
◦ access to goods globally
◦ price comparison
 Drawbacks
◦ fraud
◦ delivery issues
◦ internet access
◦ choice
◦ increased returns
D1.4 – Task 21 - Compare the benefits and drawbacks
of e-commerce to an Organisation.
Scenario
Criteria
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Task 1 – P4.1 - Produce a report describing the risks and the measures
employees/employers need to consider when dealing within data held
Task 2 – P4.2 - Produce a report describing how employees/employers are obliged
to provide information to interested parties
Task 3 – P4.3 - Produce a report describing the risks and the measures
employees/employers need to take to prevent illegal use of resources.
Task 4 – P4.4 - Produce a report describing the Computer Misuse Act, and what
protections for e-commerce companies it provides.
Task 5 – P4.5 - Produce a report describing the Consumer Credit Act, and what
protections for e-commerce companies it provides.
Task 6 – P4.6 - Produce a report describing the Consumer Protection Regulations,
and what protections for e-commerce customers it provides.
Task 7 – P4.7 - Produce a report describing the Trading Standards needs and what
protections for e-commerce customers it provides.
Task 8 – P4.8 - Produce a report describing the e-commerce regulations needs and
what protections for e-commerce customers it provides.
Task 9 – P5.1 – Describe the Social Benefits for Companies in terms of Marketing in
having an On-Line presence.
Task 10 – P5.2 – Describe the Social Benefits for Companies in terms of Business
Functions in having an On-Line presence.
Scenario
Criteria
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Assessment
Task 11 – P5.3 – Describe the Social Benefits for Companies in terms of Customer Benefits
in having an On-Line presence.
Task 12 – P5.4 – Describe the Social Negatives for Companies in terms of Changing
Business Methods in having an On-Line presence.
Task 13 – P5.5 – Describe the Social Negatives for Companies in terms of Changing
Business Methods in having an On-Line presence.
Task 14 – P5.6 – Describe the Social Negatives for Companies in terms of Socialisation in
having an On-Line presence.
Task 15 – P5.7 – Describe the Social Negatives for Companies in terms of Employment
changes in having an On-Line presence.
Task 16 – P5.8 – Describe the Social Negatives for Companies in terms of Fraud in having
an On-Line presence.
Task 17 – D1.1 – Define the Purpose and Audience of a Business with a website presence.
Task 18 – D1.2 – Define the business structure of a corporate website and explain how this
structure meets the needs of the target audience.
Task 19 – D1.2 – Define and illustrate the navigation structure, the site map , W3C considerations
and style template of a corporate website.
Task 20 – D1.3 – Produce a report on how a company promotes its goods and services via
internet means.
D1.4 – Task 21 - Compare the benefits and drawbacks of e-commerce to an Organisation.
Scenario
Criteria
Tasks
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Assessment