Answer to Question 1
Answer: Managers use e-business strategies to develop a sustainable competitive advantage.
A cost leader can use e-business to reduce costs in a variety of ways. It might use online bidding and order processing to eliminate the need for sales calls and to decrease sales force expenses; it could use Web-based inventory control systems that reduce storage costs; or it might use online testing and evaluation of job applicants.
A differentiator needs to offer products or services that customers perceive and value as unique. For instance, a business might use Internet-based knowledge systems to shorten customer response times, provide rapid online responses to service requests, or automate purchasing and payment systems so that customers have detailed status reports and purchasing histories.
Finally, because the focuser targets a narrow market segment with customized products, it might provide chat rooms or discussion boards for customers to interact with others who have common interests; design niche Web sites that target specific groups with specific interests, or use Web sites to perform standardized office functions such as payroll or budgeting.
Answer to Question 2
Answer: B
