Chapter 9

Online Retail and Services

Learning Objectives | Projects and Exercises

Projects and Exercises

Project 1: Analyze This

The Excel spreadsheet file EC16_Chapter9_Project1.xls contains balance sheets and income statements for two fictitious small online retail companies. Review their (1) revenues, (2) cost of sales, and (3) operating expenses, and calculate their respective working capital (cash and accounts receivable, minus the firm's current liabilities) and gross and net margins. Is one company financially stronger than the other? If so, which one and why? Write a 2–4 page report explaining and defending your conclusions. At an appropriate place in the report, include a 3-D bar graph comparing the five categories of financial data to support your conclusions.

Project 2: Where Would You Rather Work?

Chapter 9 examines four major categories of online retail business models:

  1. Virtual merchant
  2. Omni-channel merchants (bricks-and-clicks)
  3. Catalog merchant
  4. Manufacturer-direct

Choose the category that interests you most and then develop a list of two online retail businesses that fit it. Review the businesses' financial statements (these can be obtained from the SEC website's EDGAR archive). Which of these two businesses would you rather work for? Write a short report explaining your reasoning.

Project 3: Using an Online Career Service

Project 4: Finding the Least Expensive Flight

You will be flying from New York to San Chicago on business once a month for the next six months. Your objective is to find the airline that, on average, has the least expensive non-stop, economy/coach, round-trip flight. Select an online travel service (see Table 9.5 on page 644 for suggestions) and search for a ticket on the desired route leaving on the 5th of each of the next six months and returning on the 12th of the same month. Compile the information you find in a spreadsheet, plotting the cost of a ticket for at least three airlines in each of the next six months. Then calculate the average cost of a ticket over the six-month period for each of the airlines you have used. Finally, display your results as a column chart on the spreadsheet.

Project 5: Picking an Online Bank

You are a recent college graduate about to begin your career as an E-commerce Category Specialist in the Marketing Department of a popular online retailer. Since you are just starting out, your own financial resources are limited. However, you want to open a new checking account because you had previously kept your money at a small bank near your college. You have approximately $5,000 saved and will be earning an annual income of $65,000. Since you will be paying many of your bills online, you anticipate writing fewer than ten checks per month. Select at least three banks of your choosing and investigate their online and mobile banking services. Then select the bank you think would be best for your new checking account. Take into account that you want to use online and mobile banking but still be near a physical branch. You also want to avoid monthly fees, minimum balance fees, and excessive ATM fees. Prepare a two-page report that details the factors that contributed to your decision. Make sure you answer the following questions in your report:

  1. Why is the bank you chose the best choice for your particular situation?
  2. What does the bank you chose offer that the others did not?
  3. How much did the actual website of the bank you chose influence your decision in comparison with the information it provided?
  4. What could change about your situation that would cause you to consider switching banks?