Emerging Trends in Business – CS Foundation Business Environment Notes

Franchising:

  • It refers to a business relationship between two organisations where a franchiser allows a franchisee to use his product, brand or process in return of fees, (royalty)
  • In this, one firm allows the other to use its technical know-how & trade marks.
  • Franchiser is an individual or firm granting rights.
  • Franchisee is an individual or firm to whom the right is granted.
  • Franchise refers to the special right given by a franchiser to franchisee to sell franchiser’s product/service in a specified area.
  • Right is granted under special agreement called the Franchise Agreement.
  • Derived from Anglo French word ‘franc’ meaning ‘free’
  • Intellectual/property rights include-designs, brands, know-how, patents, trademarks, trade secrets.
  • It is the practice of using another firm’s successful business model
  • The Franchisee is an alternative to building chain stores to distribute goods and services, and to avoid investment and liability over a chain.

It has the following characteristics:

  • Right is granted under a license.
  • Franchisee gets marketing support and technology from franchiser.
  • Personnel training may be provided by franchiser.
  • Business must be operated as per the franchiser’s policy.
  • Franchisee is required to pay royalty – an agreed sum of money to franchiser.
  • Franchise agreement is for a limited period which can be renewed.

It provides the following advantages both to the Franchiser and Franchisee :

Franchiser Franchisee
  • Quick expansion of distribution system.
  • Business expansion with less capital.
  • Instant feedback from customer.
  • Increased goodwill.
  • Protected rights.
  • Get to know about specific needs and preference of local customers.
  • Wider acceptance of brand name.
  • Exclusive rights within his territory.
  • Branded product, thus well- known.
  • High degree of quality control.
  • Assistance in training his staff, product promotion etc.
  • Based on proven ideas so franchisee can check out success before committing himself.

However, it suffers from following disadvantages :

Franchiser Franchisee
  1. Risk of franchisee starting same business.
  2. Has to provide initial financial assistance and support.
  3. Ongoing cost of supporting the franchisee and national advertising.
  4. Risk of leakage of trade secrets.
  5. Risk of brand name being destroyed.
  1. Lack of freedom in business operations.
  2. Possibility of conflicts.
  3. Payment of royalty on regular basis.
  4. Restriction on selling his business.

Aggregator:

  • It is derived from the word “Aggregate”.
  • Aggregate means to combine, to accumulate or amalgamate.
  • In Digital world the term refers to that computer software or that website which collects or combines homogenous information from all around the online world and presents it to the viewer or the visitors.

The various types of aggregators are:

  • Service Aggregator
  • Search Aggregator
  • Social Aggregator
  • News Aggregator
  • Video Aggregator
  • Poll Aggregator
  • Shopping Aggregator
Aggregator Function Example
Service Aggregator

Search Aggregator

Social Aggregator

News Aggregator

Video  Aggregator

Poll Aggregator

Shopping Aggregator

Providing services to the customers combines the result

is a type of meta search engine (a tool that uses another search engine’s data to produce its own result). It combines user specified search feeds

Collects content from multiple social network

Is a software/web app., contain online newspaper, blogs etc.

Combines various videos from diff. sites

Combines data for an

upcoming election and predict the result.

Combine data from

various online shopping sites.

Uber and Ola

Rich Site Summary (RSS) feed helps the subscriber to a website get automatically news about any update on the website, as the RSS feed constantly monitors the site.

Twine social

Feedly, flip board, comma feed Daily Tube

Electoral-vote.com, votamatic.org etc.

Google Shopping, Nextdg, Shopzilla etc.

Key Factors Driving the Rise of Web Aggregators
1. An aggregator is a software or website that gathers Web content and/or applications from different online sources for reuse or sale.

2. There are two types of aggregators:

  • Aggregator that simply gather the material and show them
  • Aggregator that gather and distribute contents as per their customers needs

3. Key factors which are responsible for the rise of web aggregators are:

  • Increasing demand for business content
  • Web content aggregators are in huge demand
  • Content aggregator is the new name for journalist
  • Syndication
  • Huge variety of content formats
  • Rich media content
  • New Business Models

Key Challenges for the aggregators in the future?

  • The main challenge is that it promotes various brands under one roof.
  • The competition to look better than the competitor is high.
  • As this technology collects data using APIs and XML, so sometimes it miss out with a good updated feed coming in the database.
  • High cash burn rate – Needs huge investment
  • Competition – To compete various brands under one roof
  • Standardisation – To develop technical standards continuously
  • The Unregulated market
  • APIs and XIVIL – Are markup language, it is totally dependent on who is writing it, so sometimes it miss out with good updated feed or contain verbose language.

BPO : (Business Process Outsourcing)
1. It refers to the contracting of a specific business tasks, such as payroll, to a third party service provider.

2. It is implemented as a cost saving measure for tasks that a company requires but does not depends upon, to maintain their position in the market place.

3. It has following two sub-segments:

  • KPO : Knowledge Process Outsourcing
  • LPO : Legal Process Outsourcing

4. It is of two types:

  • Back office outsourcing: Outsourcing of internal business functions like finance, accounting etc.
  • Front office outsourcing: Outsourcing of customer related services. Example: Customer Care Centre

5. It was originated by soft drink manufacturing drink – Coca Cola.

6. It is generally associated with IT enabled services (ITES)

7. Off-shore outsourcing: Outsourcing is done by contracting outside the company’s country.

8. Near-shore outsourcing: Outsourcing is done by contracting to country’s neighboring or nearby country.

9. India is the hottest spot of IT outsourcing due to following reasons:

  • supportive government policy
  • huge skilled man power
  • advanced technology
  • reliable communication facilities

BPO is required due to the following reasons –

  • Smooth working : By outsourcing its routine activities, business can operate smoothly.
  • Economical : Outsourcing of certain activities is much more economical to do rather than creating separate department for each activity.
  • Specialization : It enables work to be done by specialized people.
  • Achieving Better Results : Specialization ensures achieving of better results.
  • Business Expansion : Business can ensure its expansion by focusing on its growth strategies while outsourcing the rest.

It has following advantages –

  • Cost Advantages : It saves 30% of company’s overall expenditure.
  • Flexibility : By outsourcing its various functions company converts its fixed cost into variable, thereby ensuring flexibility in its operations.
  • Speed : Speed of various business processes and operations increases, thus increasing the flexibility.
  • Focus on core areas : Company can save its time and energy by outsourcing its non-core activities, thereby it self focusing on company’s core areas of operations.
  • Availability of Skilled Manpower : Large pool of technically skilled manpower with proficiency in english enables the company to grow with faster pace.
  • Growth : By ensuring speed and flexibility in its operations, it helps the business in growth and expansion.

It suffers from following disadvantages (B.P.O)

  • Communication problems : It requires proper communication in order to be effective. Telephonic communication is an obstacle for this business.
  • Loss of control : By outsourcing, the company lose control over its various operations.
  • Time Zone Double Edged Sword : Due to difference in countries of both customers and vendors, time differences occurs which has to be considered.
  • Service Provider’s want of diversifying : Service providers takes up project of various companies simultaneously, thereby creating problems in providing services.
  • Customer is novice.
  • Unclear contractual issues between company and service provider.
  • Changing business requirements
  • Excessive dependance on BPO reduces flexibility.

Knowledge Process Outsourcing Meaning
1. Knowledge Process Outsourcing is at a higher position in intellectual value chain.

2. Knowledge processes can be some specific activity which requires a deep level of domain knowledge (IT, Management, Law etc.) and/or requires thinking of analytical nature.

3. It uses skilled experts in a particular field or domain and handled by experienced people.
BPO = Reduce Cost + Increase Productivity
KPO = Reduce Cost + Increase productivity + Greater Business Insight + Experienced Workforce
Hence,
KPO = BPO + Greater Business Insight + Experienced Workforce

Scope and Future of KPO –

  • KPO is the evolution and maturity of the Indian BPO sector.
  • KPO business units provide distinctive domain-based processes, progressive analytical services and business proficiency, rather than just process proficiency.
  • The future of KPO is bright and has a high potential.
  • The reason for this is that KPO is not just restricted to Information Technology (IT) or Information
  • Technology Enabled Services Sectors (ITES).

Types of KPO:
There are four categories of KPO vendors:

  • Off-shore : vendors are located abroad (developing countries)
  • Near-shore : located hearer to the client company
  • Captive : Operational plants in foreign countries
  • On-shore : Operations in the same country.

Benefits of KPO:
1. KPO providers use the latest tech, and if info, so you can be assured of error-face work
Speedy deliveries

2. KPO is indeed an extension to the BPO services. The top benefits of Knowledge Process Outsourcing which makes it so important for businesses all around the globe now:

  • Cost-effective price
  • Access to best human resource pool
  • Concentration or Focus on Prime business activity
  • Best Service Delivery

India is the one of the favorite KPO (off-shore) destination for developed Countries i.e. USA, UK & Australia, examples of some major KPO”s are :

  • Genepact
  • WNS Global Services
  • WIPRO (BPO)
  • First Source Solutions
  • TCS (BPO)
  • IBM Daksh
  • Aditya Birla Minacs

Electronic Commerce

  • Popularly known as E-Commerce.
  • It refers to the use of computer networks for buying and selling goods, information and services.

It refers to the use of electronic mediums (tele communication) to engage in the exchange, including buying and selling of products and services requiring transportation either physically or digitally, from one location to another.

It involves various technologies like –

  • EDI – Electronic Data Interchange
  • BB’s – Bulletin Boards
  • EFT – Electronic Fund Transfer
  • Digital Cash
  • Web forecasting
  • Extranet
  • Internet
  • WWW – World Wide Web
  • Imaging , etc.

Data includes text, sound and visual images

It takes place between –

  • Companies
  • Companies and their customers
  • Companies and government departments.

It involves following of categories

  • B2B – Business to Business
  • B2C – Business to Customer
  • C2B – Customer to Business
  • C2C – Customer to Customer

It includes buying and selling of Goods example – Digital Cameras, Cloths etc.
Information example – Subscription to some law site.
Services example – Placement services through naukri.com

  • Business to Business – It involves one business enterprise selling to another.
  • Business to Customer – It is used to refer to sale by a business enterprise to a direct customer.
  • Customer to Business – In it the consumers can offer products and services to companies and the companies pay them. It is a complete reversal of B2C.
  • Customer to Customer – It involves the electronically facilitated transactions between consumers through some third party. Example – online auction etc.

It is becoming popular due to following advantages:

  • Global Market : World becomes a global market for the business firms through internet.
  • Time and Effort Savings : It involves less of paper and clerical work which saves both time and money
  • Quick Supplies : Capital does not gets block in inventories as huge stock of material need not be maintained by business.
  • Quick Delivery : It ensures quick delivery of goods to consumers and timely redressal of complaints.
  • Low Transaction cost and High Margins : Cost of business transactions can be reduced greatly, thereby enabling it to earn higher profits.
  • Wider choice : Consumers get wide variety of goods and services before purchasing them.
  • Working 24 x 7
  • Direct contact between business and consumer
  • Customer convenience
  • Ease in launching of new products.

It suffers from following disadvantages:

  • High Initial Cost: Various start-up cost like net connection, hardware/software, setting up etc involves huge investment.
  • Fulfillment Problems: Many a times, it becomes difficult for business to fulfill their commitments made to the customers due to shipping delays, website crashing, etc.
  • Training and Maintenance: Continuous training and maintenance of staff, net etc. is required to be done by the business.
  • Security: Customers feel lack of security relating to their personal details like credit card number etc. via online business.
  • Corporate Vulnerability: Competitors are able to access the business information through internet. This can be harmful for the business.
  • Web Farming: It refers to the idea of extracting business intelligence from the competitors web pages
  • Lack of Personal Touch: It is not suitable for customers requiring personalised service as e-commerce does not allows personal touch between buyer and seller.
  • High Risk associated with it
  • System and Data Integrity
  • People’s Resistance

Digital Economy

  • The digital economy refers to an economy in which major business transaction takes place using digital media or internet or world wide web.
  • Consumers all around the globe are greatly influenced by digital platforms.
  • The various new ways of information dissemination are – Facebook, Twitter, Youtube, Linked in etc.
  • It is found 5-6 hours is the time an average Vs. consumer spends per day with digital media, 51% of which is via mobile.

Consumer in Digital Economy:

  • Consumer in digital economy is still a king.
  • Consumers are easily accessing huge amount of data due to digitization of content and thus sharing information has become much easier.
  • Most recently Facebook and Twitter are the direct benefit of the Digital economy to the customer centric organization.

Merits of Digital Economy are:

  • Growing use of Internet
  • Rise in E-Commerce
  • Digital delivery of goods and services
  • Greater Transparency

Demerits of Digital Economy Demerits are as follows:

  • Loss of Job
  • Less Digital Experts
  • Strong Infrastructure Requirement

Concept of incubators, asset lite models – These days, some new concepts are also emerging in business such as incubators and Asset Lite Models.

Incubator:

  • An incubator is an organization designed to accelerate the growth and success of entrepreneurial companies through an array of business support resources and services that could include physical space, capital, coaching, common services, and networking connections.
  • Incubators provide numerous benefits to owners of startup businesses.
  • Incubators are critical for driving the growth of startups at all stages of their entrepreneurial journey.
    They help provide mentorship and handholding support and above all foster a culture of innovation.

Asset Light Model:

  • Asset light model is a business model where businesses now instead of purchasing the land enter into a contract with the land owner, where they share a certain percentage or profit arising out of the business done on the land.
  • This helps in saving a huge cost of land to the business.
  • Example: Outsourcing, asset sharing, licensing in and licensing out.
  • Asset-light models can deliver a better return on assets, lower profit volatility, greater flexibility, and higher scale-driven cost savings than asset-heavy models.

Multiple Choose Questions

Question 1.
Parent organisation grants the permission to other individuals to use their brand, trademark etc. for specified period. Such rights are known as _______.
(a) Franchising
(b) Franchise
(c) Franclisee
(d) Franchiser
Answer:
(b) Franchise

Question 2.
Period for which right is transferred, under an agreement is to be renewed from time to time. This statement is _______.
(a) True
(b) False
(c) Partly True
(d) Partly False
Answer:
(a) True

Question 3.
Agreed sum paid by franchisee to franchiser is known as _______.
(a) Fees
(b) Commission
(c) Changes
(d) Royalty
Answer:
(d) Royalty

Question 4.
Intellectual Property rights does not include _______.
(a) Trademarks
(b) Patents
(c) Goodwill
(d) Know how
Answer:
(c) Goodwill

Question 5.
BPO stands for _______.
(a) Business Public Organisation
(b) Business Process Outsourcing
(c) Business Private Organisation
(d) Business People Organisation
Answer:
(b) Business Process Outsourcing

Question 6.
LPO stands for _______.
(a) Legal Product Outsourcing
(b) Lawful Process Outsourcing
(c) Legal Process Outsourcing
(d) None of these.
Answer:
(c) Legal Process Outsourcing

Question 7.
_______ is a type of BPO.
(a) Back office outsourcing
(b) Left office outsourcing
(c) Right office outsourcing
(d) None of the above
Answer:
(a) Back office outsourcing

Question 8.
BPO was originally originated by _______.
(a) Reliance
(b) Tata
(c) Coca-Dola
(d) Pepsi
Answer:
(c) Coca-Dola

Question 9.
_______ is the hottest spot of IT – outsourcing.
(a) India
(b) USA
(c) Africa
(d) Pakistan
Answer:
(a) India

Question 10.
Reason for the acceptance of BPO is _______
(a) Smooth working
(b) Specialisation
(c) Economical
(d) All of the above
Answer:
(d) All of the above

Question 11.
E- commerce means _______.
(a) Commerce of electronic goods
(b) Commerce based on transactions using Computers connected by telecommunication network
(c) Commerce dependent on electronics
(d) Commerce by using internet
Answer:
(b) Commerce based on transactions using Computers connected by telecommunication network

Question 12.
E- commerce means buying and selling of _______.
(a) Goods
(b) Services
(c) Information
(d) All of the above
Answer:
(d) All of the above

Question 13.
EDI means _______.
(a) Electrical Data Information
(b) Electrical Data Interchange
(c) Electronic Data Interchange
(d) Electronic Document Information.
Answer:
(c) Electronic Data Interchange

Question 14.
B2B, B2C, C2B, C2B, C2C are types of _______.
(a) Network marketing
(b) M-Commerce
(c) E-Commerce
(d) Marketing.
Answer:
(c) E-Commerce

Question 15.
Following is not an advantage of E-Commerce _______.
(a) Quick Supply
(b) Prompt Delivery
(c) Increased Cost
(d) Wider Choice
Answer:
(c) Increased Cost

Question 16.
Idea of extracting business intelligence from competitor’s web pages is known as _______.
(a) Web Heating
(b) Web Theft
(c) Web Farming
(d) None of these.
Answer:
(c) Web Farming

Question 17.
PDA’s , Smart phones, Mobile phones are required in _______.
(a) M-Commerce
(b) Network Marketing
(c) E-Commerce
(d) Marketing
Answer:
(a) M-Commerce

Question 18.
Under network Marketing, with the help of whom does the product reach the customers from the manufactures?
(a) Wholesaler
(b) Distributors
(c) Retailer
(d) None.
Answer:
(b) Distributors

Question 19.
Under network marketing, lower overhead costs incur due to _______.
(a) Low infrastructural requirement
(b) Low advertisement cost
(c) Both (a) and (b)
(d) None.
Answer:
(a) Low infrastructural requirement

Question 20.
Under network marketing, there is some risk involved-in becoming?
(a) Capitalist
(b) Socialist
(c) Wholesaler
(d) Retailer
Answer:
(a) Capitalist

Question 21.
In network marketing, who becomes the largest customer and takes over the control of the company _______.
(a) Wholesaler
(b) Retailer
(c) Distributor
(d) No one.
Answer:
(c) Distributor

Question 22.
Whom does the franchiser allow to use his trademark under a license?
(a) Franchiser
(b) Licencer
(c) Franchisee
(d) Does not allow such a right.
Answer:
(c) Franchisee

Question 23.
The word “Franchise ” is derived from _______.
(a) Anglo French
(b) Latin American
(c) Indian
(d) Greek.
Answer:
(a) Anglo French

Question 24.
Who does not allow the principle to exert real control over distributor or agent _______.
(a) Agent
(b) Principle
(c) Agency
(d) Distributor
Answer:
(c) Agency

Question 25.
Which one of the following is not an advantage of network marketing?
(a) Continuous growth of the distribution network
(b) Low overhead cost
(c) Opportunity to earn unlimited income
(d) Accurate sales forecasting
Answer:
(d) Accurate sales forecasting

Question 26.
The practice of using another firm’s successful business model is called _______.
(a) Franchising
(b) Leasing
(c) Outsourcing
(d) Network marketing
Answer:
(a) Franchising

Question 27.
The Franchisee is required to pay to the Franchiser _______.
(a) Remuneration
(b) Fees
(c) Pre-determined sum
(d) Royalty
Answer:
(d) Royalty

Question 28.
A BPO contracted outside the companies country is called _______.
(a) Off shore outsourcing
(b) Near shore outsourcing
(c) Far shore outsourcing
(d) Foreign outsourcing
Answer:
(a) Off shore outsourcing

Question 29.
PDA stands for _______.
(a) Personal Data Account
(b) Permanent Direct Account
(c) Private Distributing Agency
(d) Personal Digital Assistance
Answer:
(d) Personal Digital Assistance

Question 30.
Which of the following is not a feature of Franchising?
(a) The franchiser allows the franchisee to use his trade mark
(b) the franchisee is required to follow the franchiser’s policy
(c) The franchiser does not make any arrangement for training the employees
(d) the franchisee agreement is for a limited period of time
Answer:
(c) The franchiser does not make any arrangement for training the employees

Question 31.
ITES stands for _______.
(a) Information Technology Energy System
(b) Information Technology Enabled Software
(c) Information Technology Enabled Services
(d) None of the above
Answer:
(c) Information Technology Enabled Services

Question 32.
Which of the following statement is True?
(a) Franchiser exercises more control as compared to distributor
(b) Franchiser exercises less control as compared to the distributor
(c) Franchiser and distributor have equal control
(d) None of the above
Answer:
(a) Franchiser exercises more control as compared to distributor

Question 33.
Which of the following is not an advantage of E-commerce?
(a) Low start up cost
(b) Quick delivery
(c) Saving of time and effort
(d) All of the above
Answer:
(a) Low start up cost

Question 34.
EDI stands for _______.
(a) Electronic Data Interchange
(b) Employee Data Interchange
(c) Electronic Device Interchange
(d) None of the above
Answer:
(a) Electronic Data Interchange

Question 35.
EFT stands for _______.
(a) Electronic Funds Transfer
(b) Electronic Financial Transfer
(c) Enterprise Financial Transfers
(d) Enterprise Funds Transfers
Answer:
(a) Electronic Funds Transfer

Question 36.
Which one of the following is a category in which Business Process Outsourcing can be categorised?
(a) Back office outsourcing
(b) Front office outsourcing
(c) Offshore outsourcing
(d) All of above.
Answer:
(d) BPO refers to the contracting of a specific business tasks, such as payroll, to a third party service provider. It is of following types:

Back office outsourcing
Front office outsourcing
Off shore outsourcing
Near shore outsourcing

Question 37.
Which among the following is one of the largest ‘Job providers’ in India?
(a) Network marketing
(b) Business process outsourcing
(c) Medical tourism
(d) Film industry.
Answer:
(b) The largest Job provider in India is Business Process Outsourcing. BPO is a subset of outsourcing that involves the contracting of the operation and responsibility specific business function to a third-party service provider.

Question 38.
Which one of the following is a great concern for E-COMMERCE?
(a) Speed
(b) Quality
(c) Security risk
(d) Maintenance cost.
Answer:
(c) The great concern for the E-commerce is the security risk. Security continues to be a problem for online business. Many people are reluctant to give out their credit card number via internet. Customers have to feel confident about the integrity of the process before they commit to purchase.

Question 39.
The online purchase of a book from flipkart.com is an example of—
(a) B2B e-commerce
(b) B2C e-commerce
(c) C2B e-commerce
(d) C2C e-commerce.
Answer:
(b) E-commerce refers to the use of computer networks for buying and selling goods, information and services. It involves various categories like –

  • B2B
  • B2C
  • C2B
  • C2C

B2C i.e. business to customer means the sale by a business enterprise to a direct customer. Thus, online purchase of a book from flipkart.com is an example of B2C as the book sellers are selling books to its customers.

Question 40.
For a car manufacturing firm, which of the following business process is most suitable for outsourcing?
(a) Production Management
(b) Quality Assurance
(c) Customer Relationship
(d) None of the above.
Answer:
(c) Outsourcing refers to the contracting of the operations and responsibilities of a specific function (process) to a third party service provider. It is initially associated with manufacturing firms which outsourced large segments of its supply chain. It includes front office outsourcing, i.e. customer related services such as contact centre services, so, for a car manufacturing firm, customer relationship is most suitable for outsourcing.

Question 41.
What is e-commerce?
(a) It refers to the use of computer network
(b) It refers to the idea of extracting business intelligence
(c) It refers to the buying and selling of goods and services
(d) Both (a) & (c)
Answer:
(b) Customer Care department account for the bulk of call center activities with 24×7 handling of inbound (customer queries and grievances) and out-bound activities (customer surveys, payment follow up and telemarketing). Thus, option B is the correct answer.

Question 42.
Franchiser helps franchisee on setting up business or not-
(a) Yes
(b) No
(c) Partly yes
(d) Can’t say
Answer:
(a) Franchiser helps a lot in setting up a business Hence, option (a) is correct as the franchiser grants a license to the franchisee to use the franchiser’s diverse intellectual property rights & trade secrets along with his proven name.
Besides franchiser provides marketing support & technology to the franchisee. He virtually sets up the business for a franchisee.

Question 43.
Which amongst the following is the disadvantage of E-commerce?
(a) Lower transaction cost
(b) Difficulty in training and maintenance
(c) Security problems
(d) Both (b) and (c)
Answer:
(d) Following are the disadvantages of E-Commerce:

  • High start-up Cost
  • High Risk
  • Training and Maintenance
  • Fulfillment Problems
  • Lack of Personal Touch
  • Security
  • System & Data Integrity
  • Corporate Vulnerability
  • People’s Resistance

Thus answer is both (b) and (c).

Question 44.
BPO not only gives specialised performance, but also provides _______.
(a) Same Cost
(b) Saving in Cost
(c) Different Cost
(c) None of the above
Answer:
(b) BPO provides following advantages:

  • Cost Saving
  • Flexibility in operations
  • Increase in speed
  • Focus on core areas
  • Availability of skilled manpower
  • Growth

Thus, BPO not only gives specialised performance, but also provides saving in Cost.

Question 45.
_______ refers to the idea of extracting business intelligence from the competitive web pages.
(a) Web farming
(b) Web theft
(c) Web heating
(d) None of these
Answer:
(a) Web farming refers to the idea of extracting business intelligence from the competitors web pages.

Question 46.
Write the expanded form of KPO _______.
(a) Knowledge process outsourcing
(b) Knowledgeable process outsourcing
(c) Knowledge product outsourcing
(d) Knowledge process outlets
Answer:
(a) KPO stands for Knowledge Process Outsourcing, it is the process by which the knowledge gaining process is outsourced to someone else. Hence, option (a) is correct.

Question 47.
Online auction comes under _______.
(a) B2B
(b) B2C
(c) C2B
(d) C2C
Answer:
(d) Online auction is nothing but the auction process done through the use of computer networks. It links the two customers. Hence we can say that online auction comes under C2C.

Question 48.
Customer care department in call centre handles:
(a) Does telemarketing only
(b) Inbound and outbound activities
(c) Inbound activities only
(d) Outbound activities only.
Answer:
(b) Customer Care department account for the bulk of call center activities with 24×7 handling of inbound (customer queries and grievances) and out-bound activities (customer surveys, payment follow up and telemarketing). Thus, option B is the correct answer.

Question 49.
E-Commerce results in _______ Transaction cost & _______ margin.
(a) Higher, lower
(b) Lower, lower
(c) Lower, higher
(d) Higher, higher.
Answer:
(c) E-commerce reduces the cost of business transaction substantially. For instance, the number and cost of customer service representatives in a bank can be reduced by using net banking. An e-commerce firm can earn higher margins as the transaction costs are reduced to a great extent.

Question 50.
Who amongst the following allows to use his trademark and provides assistance in business for a particular amount?
(a) Franchisee
(b) Government
(c) Partnership
(d) Company
Answer:
(a) The Franchisee pays to the franchiser a sum of money (called Royalty) for using his business know-how and trade mark.

Question 51.
BPO that is contracted to a company’s neighbouring (or nearby) country is called ________.
(a) off shore outsourcing
(b) near shore outsourcing
(c) on shore outsourcing
(d) None of the above
Answer:
(b) BPO that is contracted to a company’s neighboring (or nearby) country is called near shore outsourcing.

Question 52.
Full form of E-Commerce is ________.
(a) electric commerce
(b) electricity commerce
(c) electronic commerce
(d) None of the above
Answer:
(c) Full form of E-Commerce is ‘Electronic Commerce’.

Question 53.
Which of the following are example of B 2 C?
(a) Online shopping websites
(b) Heavy key industries
(c) Purchase by a wholesaler from manufacturer
(d) None of the above
Answer:
(a) Online shopping websites are the example of business to consumer transactions i.e. amazon, Flipkart etc.

Question 54.
If a person post an advertisement to sell his product on OLX website, it is an example of _______.
(a) B2C
(b) B2B
(c) C2C
(d) C2B
Answer:
(c) If a person posts an advertisement to sell his product on OLX website this is an example of consumer to consumer i.e. C 2 C.

Question 55.
Selling + customer satisfaction = _______.
(a) Network Marketing
(b) E-Commerce
(c) M Commerce
(d) Marketing
Answer:
(d) Selling + Customer satisfaction = Marketing

Question 56.
Automobile parts are being purchased from ABC company, by placing orders through its website. This is an example of ________.
(a) Viral marketing
(b) Network marketing
(c) BPO
(d) E-Commerce
Answer:
(d) Electronic commerce refers to all form of business transactions which are carried out through electronic processing and transmission of data including test sound and visual images. Hence, Automobile parts are being purchased from ABC company by placing orders through its website is an example of E-commerce.

Question 57.
Which one is odd one out?
(a) KPO
(b) LPO
(c) BPO
(d) ILO
Answer:
(d) Outsourcing is popularly associated with IT enabled services and is also known as Business Process Outsourcing (BPO). KPO and LPO are some of the sub-segments of BPO. Thus, ILO is not a part of BPO.

Question 58.
E-commerce relates to:
(a) Dealing in electronic goods
(b) Using internet facility for selling commodities
(c) Using hand bills devices like mobiles, PDA to conduct commerce
(d) All of the above.
Answer:
(b) E-Commerce refers to the use of computer networks for buying and selling goods, information and services.

Question 59.
In M-commerce, what does word ‘M’ indicates?
(a) Mobile
(b) Mobility
(c) Multilevel
(d) None of the above
Answer:
(a) In M-commerce, ‘M’ indicates ‘Mobile’. It refers to the buying and selling of goods and services through wireless hand held device such as mobile.

Question 60.
Customer Care Services presents which office in BPO:
(a) Front Office
(b) BackOffice
(c) Shore Sourcing
(d) Near Source Outsourcing
Answer:
(a) BPO is typically categorized into back office outsourcing which includes business functions such as human resources and front office outsourcing which includes customer related services such as contact centre services.

Question 61.
Outsourcing may allow an entrepreneurship to:
(a) Avoid the maturity stage in a business
(b) Avoid decline stage in a business
(c) Avoid bankruptcy
(d) Deploy capital and resources in more critical areas.
Answer:
(d) Outsourcing may allow an entrepreneurship to deploy capital & resources in more critical areas as focusing more on one of these driven may help a company create a competitive edge.

Question 62.
A _______ industry is an industry that is experiencing slow or no increase in demand.
(a) Global
(b) Declining
(c) Mature
(d) Emerging.
Answer:
(b) A declining industry is an industry that is experiencing slow or no increase in demand. This often is expected at the beginning or end stage of the product. There may be fall in both sale & profit, but still have opportunities for manufacturer to continue and making profit from their product.

Question 63.
Business Process Outsourcing (BPO) is near shore outsourcing when:
(a) That is contracted is a nearby country
(b) That is contracted outside a company’s country
(c) That is contracted in a specific country
(d) That is contracted in a company in the same country.
Answer:
(a) BPO that is contracted to a company’s neighbouring (or nearby) country is called near shore out sourcing involves the contracting of the operations and responsibility of specific business functions to, the third-party service provider.

Question 64.
E-commerce provides of goods.
(a) Defective delivery
(b) Denial of delivery
(c) Delayed delivery
(d) Quick delivery
Answer:
(d) Advantages of E-Commerce:

  • Global market
  • Lower cost and Higher margin
  • Quick Delivery
  • Saving of Time and Effort
  • 24 x 7 working
  • Quick supply
  • Wider choice
  • Customer convenience
  • Direct contract
  • Launching new product

Question 65.
BPO contracted outside a company’s country is technically called:
(a) Upshore outsourcing
(b) Nearshore outsourcing
(c) Outside outsourcing
(d) Offshore outsourcing
Answer:
(d) BPO that is contracted outside company’s country is called offshore outsourcing.

Question 66.
One of the reasons for India being hotspot for outsourcing is:
(a) Availability of huge skilled manpower with proficiency in English
(b) Because there are many persons of Indian origin abroad in IT sector
(c) Because Indians are friendly people
(d) Because in India there is unity in diversity.
Answer:
(a) India is the hottest spot of the IT outsourcing due to many reasons i.e. supportive government policy, huge skilled manpower, advanced technology, and reliable communication facilities. Thus option (a) is correct.

Question 67.
Outsourcing may allow an entrepreneur to _______.
(a) Avoid bankruptcy
(b) Deploy capital and resources in more critical areas
(c) Avoid the maturity stage in a business
(d) Avoid decline stage in a business
Answer:
(b) Outsourcing is a practice in which an individual or company performs tasks, provides services or manufactures products for another company- functions that could have been or is usually done in-house. Outsourcing is typically used by companies to save cost, smooth working for achieving better results and business expansion by deploying capital and resources in more efficient and critical areas.

Question 68.
Business to consumer commerce includes:
(a) Customers should approach only business to buy
(b) Business approaching only customers to sell
(c) Customers should approach only customers to sell
(d) Shopping for physical goods only
Answer:
(b) Electronic commerce has been classified into 4 parts.
B2B Business to Business
B2C Business to Consumer
C2B Consumer to Business
C2C Consumer to Consumer

Question 69.
Which of the sectors of the economy is likely to have maximum impact on environmental developments?
(a) Retailing
(b) Mining
(c) Banking
(d) Information Technology
Answer:
(d) Information Technology is likely to cause maximum impact on the environmental development.

Question 70.
Mark the incorrect option in relation of franchising:
(a) The franchiser has to provide initial financial assistance and support in the form of staff training, advertising etc.
(b) there is a risk of trade secrets getting leaked out in the foreign market. The leakage may cause serious losses.
(c) There is no impact on franchiser’s business out of franchisee’s activities
(d) There is a danger that the franchisee may start an identical business with slightly different brand name.
Answer:
(c) Statement (c) is incorrect because the franchiser business is also affected by franchisee activities because the trade name is one.

Questions 71.
The benefits of information and communication technology function improve:
(a) Improve business through the cost also increases
(b) Improving business process and reduce.cost
(c) Employees can talk highly of there employers
(d) Employer’s can talk highly of their employers
Answer:
(b) Information and communication technology improves the process of business and also reduces the cost.

Question 72.
In IT Enabled Services, which among the following is one of the largest ‘Job Providers’ in India?
(a) Network Marketing
(b) Business Process Outsourcing
(c) Medical Tourism
(d) Film Industry
Answer:
(b) Outsourcing is popularly associated with IT Enabled Services (ITES) and is also known as Business Process Outsourcing (BPO), Knowledge Process Outsourcing (KPO) and Legal Procsss Outsourcing (LPO) are the sub-agents of business process outsourcing industry.
BPO is also the iargest ‘Job Providers’ in India.

Question 73.
Which of the following is a great concern for E-commerce?
(a) Speed
(b) Quality
(c) Security Risk
(d) Maintenance Cost
Answer:
(c) E-commerce (Electronic Commerce) refers to all form of business transactions which are carried out through electronic processing and transmission of data including text, sound and visual images. E-commerce includes buying and selling of goods e.g. digital camera, music systems, clothes, accessories so, there is great concern of security risk in E-commerce.

Question 74.
KPO stands for:
(a) Knowledge Produce Outgoing,
(b) Knowledge Process Outsourcing
(c) Known Product Outsourcing
(d) None of these.
Answer:
(b) KPO: Knowledge Process Outsourcing.

Question 75.
E-commerce stands for:
(a) Entrepreneurial Commerce
(b) Enterprise Commerce
(c) Executive Commerce
(d) Electronic Commerce
Answer:
(d) E-commerce: Electronic Commerce

Question 76.
Which statement is True, in relation to franchisee ________.
(a) franchisee doesn’t affect by franchiser
(b) More franchisee locations, less will be the profit
(c) franchisee provide more profit and fame to franchiser
(d) None of these
Answer:
(c) More the franchisee more will be the profit and fame of franchiser.

Question 77.
BPO stands for:
(a) Business Product Outsourcing
(b) Business Privacy Outsourcing
(c) Body of Professional Outsourced
(d) Business Process Outsourcing
Answer:
(d) BPO: Business Process Outsourcing

Question 78.
Franchise is derived from Latin Word “ franci” means:
(a) Friends
(b) Chains
(c) Free
(d) None
Answer:
(c) Franchise is derived from the Latin Word “franc” which mean free.

Question 79.
In which of the following Personal Digital Assistants (PDAs) are used for buying and selling of goods and services?
(a) E-commerce
(b) M-commerce
(c) V-commerce
(d) All of the above
Answer:
(b) M-commerce refers to the buying and selling of goods and services through wireless hand held device such as mobile, Personal Digital Assistants (PDAs), etc Therefore in M-commerce PDAs are used for buying and selling of goods and services.

Question 80.
The online purchase of a book from filpkart com is an example of ________.
(a) B2B e-commerce
(b) B2C e-commerce
(c) C2B e-commerce
(d) C2C e-commerce
Answer:
(b) Online shopping websites are example of business to consumer transactions such as Flipkart, Amazon, Myntra etc. Therefore online purchase of a book from flipkart.com is an example of B2C e-commerce.

Question 81.
For a car manufacturing firm. Which of the following business process is most suitable for outsourcing ________.
(a) Production Management
(b) Quality Assurance
(c) Customer Relationship
(d) None of the above
Answer:
(c) Outsourcing refers to the contracting of the operatings and responsibilities of a specific function (process) to a third party services provider. It is initially associated with manufacturing firms which outsourced large segments to its supply chain. It includes front office outsourcing i.e. customer related services such as contact centre services.

Question 82.
India is the hottest spot of the IT outsourcing because:
(a) Supportive government policy
(b) Huge skilled man power is English
(c) Advanced Technology
(d) All of the above
Answer:
(d) India is the hottest spot of the IT outsourcing. The reasons are that India has supportive government policy, advanced technology, reliable communication facilities, huge skilled man power with proficiency in English language.

Question 83.
Customer has always been the key in:
(a) E-commerce
(b) Non E-commerce
(c) Both ‘A’ and ‘B’ .
(d) None of above.
Answer:
(c) Customer is considered to be a king in both e-commerce as well as non-e-commerce market because it is considered to be a business mantra accentuating the importance of customers in the business. A king does not want to be told what to do same as with customers, it is he who demands, not the other way around.

Question 84.
KPO = BPO + + _______.
(a) Greater Business insight + Experienced workforce
(b) Increased productivity + Experienced workforce
(c) Reduce Cost + Increase productivity
(d) None.
Answer:
(a) BPO = Reduce Cost + Increase Productivity
KPO = Reduce Cost + Increase Productivity + Greater business insight + Experienced Workforce
Hence,
KPO = BOP + Greater Business Insight + Experienced Workforce.

CS Foundation Business Environment and Law Notes