E commerce m com semester 2 important questions and answers pdf download
M.com Part 1 (Semester 2) E- COMMERCE Most Important Question Bank for Current Exam Q.19. What are the limitations of e-enterprise? ANS: Though e-commerce offers many advantages to customers, business, society and nation, there are still some areas of concern that need to be addressed. The following are some of the disadvantages or limitations of e-enterprise. 1. Security :- The biggest drawback of e-business is the issue of security. People fear to provide personal and financial information, even though several improvements have been made in relation to data encryption. Certain websites do not have capabilities to conduct authentic transactions. Fear of providing credit card information and risk of identity limit the growth of e-business. 2. Lack of privacy :- Many websites do not have high encryption for secure online transaction or to protect online identity. Some websites illegally collect statistics on consumers without their permission. Lack of privacy discourages people to use internet for conduction commercial transactions 3. Tax issues :- Sales tax is another big issues when the buyer and seller are situated in different locations. Computation of sales tax poses problems when the buyer and seller in different states. Another factor is that physical stores will lose business if web purchases are free from tax. 4. Fear :- People fear to operate in a paperless and faceless electronic world. Some of the business organizations do not have physical existence, people do not know with whom they are conducting commercial transactions. This aspect makes people to opt physical stores for purchase. 5. Legal issues :- The cyber laws that govern the e-business transactions are not very clear and very from country-to-country. These legal issues prevent people from entering into electronic contacts. 6. Sectoral Limitations :- The main disadvantage of e-business is the lack of growth in some sectors on account of product or sector limitations. The food sector has not benefited in terms of growth of sales and consequent revenue generation because of number of practical reasons, like food products becoming perishable items. Consumers do not look for food products on the interent, since they prefer to going to the supermarket to buy the necessary items as and when its require. Therefore, e-business gets the online orders relate to food, grocery related products. 7. Costly e-business solutions for optimization :- Substantial resources are required for redefining products lines in order to sell online. Upgrading computer systems, training personnel, and updating websites requires substantial resources. Electronic Data management (EDM) and Enterprise resourse planning(ERP), necessary for ensuring optimal business process, may be pose challenges to e-enterprise. 8. Challenges of low Entry Barriers to existing Firms :- In e-commerce there is low entry barriers. The rapid growth of e-commerce sector is attracting new entrants. One can start e-business venture with an initial investment of as low as rs.5 to rs 10 lakhs, thereby leading to reduced competitive advantages. The sector is also attracting the interest of Venture Capital Funds, and thus enabling e-commerce enterpreneurs to secure funds easily. This enables new companies to easily replicate the existing business models and , thereby ,increase competiton in the sector. 9. Low Pentration of Internet in Rural Areas :- India’s e-commerce market is mainly dominated by urban areas, with the bulk of the business being restricted to cities. Internet useage in rural areas is limited, although 70% of india’s population lives in rural areas. The limited internet useage in rural areas could be due to several factors such as low internet speed and internet user base. The inadequacy of vernacular content of e-commerce websites is another reason for low penetration in rural areas. 10. Problem in payment gateways :- Indian payment gateways have high failure rate as comapred to other countries. Several customers do not attempt payment after a transaction fails. Therefore, online sellers using payment gateways are losing out on online sales.
