FINAL EXAMINATION PROGRAMME:

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1 FINAL EXAMINATION PROGRAMME: MASTER OF BUSINESS ADMINISTRATION (MBA): GENERAL AND TOURISM- YEAR ONE MODULE: MANAGEMENT INFORMATION SYSTEMS INTAKE: JULY 2011 DATE: 19 NOVEMBER 2011 TIME: 09h00 12h00 DURATION: 3 Hours TOTAL MARKS: 100 EXAMINER: Professor A Moolla MODERATOR: Professor MS Maharaj INSTRUCTIONS TO THE CANDIDATE: 1. Questions must be attempted in the answer book provided. 2. All queries should be directed to the invigilator; do not communicate or attempt to communicate with any other candidate. 3. You have THREE HOURS to complete this paper. You are not allowed to leave the examination room within the first hour and in the last 15 minutes of this examination. 4. This is a CLOSED BOOK examination. 5. Answer ANY FIVE (5) questions.

Questions must be attempted in the answer book provided. 2. All queries should be directed to the invigilator; do not communicate or attempt to communicate with any other candidate. 3.

2 1 Read the Case study below and answer ANY FIVE (5) questions that follow Kalahari.net: Achieving Growth in a Limited Market Introduction Hein Pretorius was the CEO of Kalahari.net which had grown from 9000 customers in 2000 to just under in At this stage Kalahari.net had become one of South Africa s largest e-tailers. Kalahari.net had expanded at an alarming rate, not only selling books and music but also included the sale of films, gaming, travel, wine, magazine subscriptions, electronics and Verimark Products. All seemed ideal, until there was a decline in the prices of CD s and DVD s- the DVD price had dropped from R299 to R149 in 2003 alone. This posed the biggest challenge that Hein Pretorius was experiencing. This meant that in order for Kalahari.net to remain competitive, not only did it have to drastically cut its prices but also had to increase its customer base. Challenges faced by Kalahari.net: With the onset of the dot.com crash in 1999/2000 many South African e-commerce initiatives had failed. Customers had lost faith in the ability of e-tailors being able to deliver because of the volatility of the system. A study by Goldstuck revealed that whilst an estimated 3.28million South Africans had access to the internet by 2004, only about internet users were conducting transactions online. Goldstuck s reasoning behind this, however, was that it would take time for internet users to migrate from merely using some services, e.g. to actually conducting transactions online. South Africa had the highest telecommunications cost in the world, which included the cost of Broadband, ultimately determined by South Africa s sole service provider Telkom. With the introduction of General Packet Radio Service in South Africa in 2004, Gary Hadfield, Commercial Manager for Kalahari.net believed that the more affordable mobile 3G would perhaps open up a huge market for e- tailers; however, not many were enthusiastic about it. Kalahari.net also had another major challenge to contend with was the Database. To sell books successfully online, Kalahari.net needed to supply its customers with information on books. This posed a huge problem for them as at that time, such bibliographic details were not readily available in South Africa. Kalahari.net had attempted, earlier on, to create its own database but this system was deemed ineffective. The database proved to be too cumbersome and only identified local titles. Keeping cost down was an ongoing challenge as international music, could only be distributed locally. Kalahari.net implemented the following models in an attempt to resolve these challenges: Business Models and Strategies The Retail Model: Since the company had no stock, Kalahari. net s model was known as the zero inventory model. And this suited the business as it was mainly cash up front, with payments usually received within seven days. This helped Kalahari.net run efficiently and effectively.

net had become one of South Africa s largest e-tailers. Kalahari.

3 2 Strategic Partnerships: When Kalahari.net was first introduced, it was often compared to Amazon.com. The main difference was that Amazon.com had procured its own product and distributed directly to its consumers from its own sophisticated warehouses. Kalahari.net on the other hand used supplier partnerships and joint ventures. Pretorius decided to expand his strategic alliance to include not only e-traders and an example of this is its recent alliance with FirstRand and its ebucks loyalty programme, which offered offered customers an additional payment option and immediately brought a potential membership base to kalahari.net for possible conversion. FirstRand (and therefore also ebucks) members included: First National Bank; RMB Private Bank; Look & Listen; Spec-Savers; WesBank; Momentum Multiply; Arthur Kaplan Jewellers; Golfers Club; and kalahari.net. Not only could members use their ebucks (ebucks l0 = R1) to pay for their purchases on kalahari.net, but they were also earning new ebucks while transacting online. Online/Offline Strategies: Unlike a normal retail book store, where the customers go to the store, Kalahari.net went to the customer by means of technology, thus providing all the benefits of the online shopping experience. Some traditional retailers believed that retailing and e-tailing were fundamentally different. Van Schaik's Bookstore managing director, Chris Wolf, for example, said that in the traditional retail environment, "your business was based on customers coming to you, whereas in e-tail, the product went directly to the customers. But Pretorius strongly disagreed: "I don't think retail strategies are rocket science at all. Retail strategies are based on the best product at the best time, with the best customer service behind it. From an online perspective it gives you the ability to understand the customers and segment them better, to personalize the market. Commercial Strategy: Kalahari.net identified its consumer benefits as convenience, value for money and trust in its brand. The e-voucher Campaign: Kalahari.net provided R50 Vouchers for customers on sales which ultimately led to more sales. Kalahari s solutions Goldstuck s theory may have been correct by stating that the migration to online transactions would take time. Issues on security may have also contributed to people electing to purchase from stores rather than online. Pretorius had discovered that Kalahari.net had built consumer confidence by ensuring that a secure online environment was created. The security system scanned all orders placed on an hourly basis to detect suspicious orders, in terms of 149 parameters. Kalahari.net also complied with the newly signed South African Electronic Communications and Transactions (ECT) Act (25 of 2005). Telkom being the sole service provider at the time, had forced Kalahari.net into streamlining its easy search, hassle free registration and checkout procedure which ultimately benefited the customer.

4 3 The database problem was resolved through strategic partnerships. Pretorius began negotiating with publishers and had managed to get them to reduce their prices. Kalahari.net made its databases available to its music partners free of charge. Kalahari.net had updated its databases continually to meet demands, whether it was via or FTP (File Transfer Protocol) using TCP/ IP networks like the internet. Pretorius and his team considered both the needs of the customers and the requirements of Kalahari.net in meeting these needs. Pretorius formed good relationships with his customers and partners alike. Keeping cost down was an ongoing challenge, however, Kalahari.net managed to do just that despite numerous restrictions. International music, however, could only be distributed locally. The company used the r ing procedure for international distribution. Source: Kalahari.net: Achieving Growth in a Limited Market, Graduate School of Business Administration, 2005 QUESTION ONE 1.1 Discuss the information system strategy employed by Kalahari.net to deal with competitive forces 1.2 Briefly describe the Kalahari.net value chain model (8 marks) QUESTION TWO 2.1 Can Kalahari.net be considered a digital firm? Justify (5 marks) 2.2 What are the advantages that Kalahari.net experiences from using the Internet as the infrastructure for electronic commerce and electronic business (15 marks) QUESTION THREE 3.1 Explain how the supply chain of Kalahari.net differs from the supply chain of the traditional brick and mortar bookshop. 3.2 Explain how Kalahari.net is able to manage customer relationships using E-Commerce (8 marks)

net had updated its databases continually to meet demands, whether it was via email or FTP (File Transfer Protocol) using TCP/ IP networks like the internet.

5 4 QUESTION FOUR 4.1 Kalahari.net initially experienced problems with the database. Explain the benefits Kalahari.net were looking for in a fully functional database management system 4.2 Outline the principal payment system(s) that Kalahari.net is likely to employ for electronic commerce (8 marks) QUESTION FIVE One of the key success factors of Kalahari.net was ensuring a secure online environment to attain the confidence of shoppers. 5.1 Outline the security threats that Kalahri.net is likely to be exposed to (8 marks) 5.2 Discuss the critical security controls that Kalahari.net would have implemented to ensure a secure online environment. QUESTION SIX Should Kalahari.net wish to expand its operation across the world? 6.1 Describe the alternative strategies that Kalahari.net can consider for developing its global business model 6.2 Explain some of the challenges Kalahari.net are likely to confront by global information systems and management solutions (8 marks) END OF PAPER

net was ensuring a secure online environment to attain the confidence of shoppers. 5.1 Outline the security threats that Kalahri.net is likely to be exposed to (8 marks) 5.

BUS 478: Seminar on Business Strategy SYNOPSIS PROJECT: AMAZON.COM. Group G. Group Members: Tristan Landrecht. Jessica Zhang. John Chen.

BUS 478: Seminar on Business Strategy SYNOPSIS PROJECT: AMAZON.COM Group G Group Members: Tristan Landrecht Jessica Zhang John Chen Jin Can Chen Jae Kim 0 Company Background When Amazon was founded in