Development of Online Auction Market
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The world of online auction is a very competitive world, its also almost monopoly where companies such as e-bay take the biggest market share. Because the internet has no governing body and does not belong to any government there is no control over what users are selling or buying or whether there is ethical, moral or legal ramification on the act of the customers which use the services of these companies.
Competing with companies such as e-bay, a well established brand with global dominance is not something I had in mind; Student Online Auction System is no exception in its need for these advantages and competitive edge to thrive in this highly competitive global market. This report will outline the stage in carrying out an investigation of a problem situation which is a real world and developing a new system. To be able to achieve tasks, various analytical and design methodologies were investigated.
It is also important to consider the organizational structure and culture, this can play a vital role in information modeling because often a failure in an information system project may be more due to lack of recognition of or respect for the culture of the organization than because of the technology itself.
Major organisations such as e-bay but lot of emphasizes on calling their customers Community members rather then customers. The original idea that help the birth of e-bay was to establish an online community were members meet in online forums were they engage in open discussions on how to improve the services provided, exchange ideas as well as selling and buying
In this project an attempt will made to be more aware of the needs of the customer, and to make the system have the facility were customers, give a feedback on the systems functionality, usability and ease of navigation and then carrying out any relevant improvements suggested by these feedbacks at the maintenance stage.
The aim of this project is to design and set up an online business model where students at the university can buy and sell articles through effective bidding system. It also provides a guide for me to undertake the project successfully through gathering essential information and literature relating to the fundamental issues that can support and improve security. The projects objective is to create a tool that will reduce the operational risks related to do this type of business where fraudulent misuse of user accounts is very common.
Information systems are fundamental part of organisations asset, its classed as an asset because information systems use data bases which are the building blocks of an information system. The information gathered and stored in these building blocks are then analysed and refined to help organisations decision making process.
Although ordinary filing system will probably satisfy the definition of information system a Data Base Management System (DBMS) is a program design specifically to store and access data. It also has special features not present in cabinet filling system such as consistency, time saving, access control, reliability and recovery.
This project is about developing a system which merges Database with website technology to produce an Online auction Business.
1.2 Description of Project Objectives.
The main objective of this project is to make Students who want sell their unwanted items a computerized business by developing a database system together with a database driven site to give online services for their customers. In order to give a good service and stay competitive on the market, the business should be able to adopt this new system.
The project will research on other Auction Businesses who already uses this technology and also investigate on how this business can give online services. In addition to that, the project will investigate the existing systems used by the existing online auction companies in day to day activity and identify the problem area of their system in order to come up with a better system.
Starting from the research and analysis it will go to the implementation by having an appropriate report on the process undertaken including explanation of techniques and software used to develop the system. It will also analyse and identify the appropriate technology for SOAS Ltd to give an efficient service and to run the business more effectively.
Finally there will be testing and evaluating the finished product to make sure that it meets the requirements in order to satisfy the client.
Main points why set up Student Online Auction System.
To provide fast and an efficient service to their customers.
To get or attract more customers by giving online and fast services.
To improve communication with customers.
To protect data or information against unauthorised access.
Online service will save journey (time) for any customers.
Generate Revenue for both students and the company
Stay competitive on the market.
Peace of mind.
1.3 Academic Objectives
To design and implement a database management system for
To gain an understanding of a database systems and the technology behind them.
To research on other estate agents who currently have a database management system and online system.
To discusses a range of methodologies, tools and techniques in order to select the most suitable approaches for the development of the project.
To demonstrate all the practical and theoretical knowledge gained during my studies at the university.
To meet deadlines following the software development principle including project management and documentation.
To develop a website for London wide estates.
1.4 Personal Objectives
To gain a valuable knowledge and experience in a variety of fields that should help build my future career.
To gain confidence in my ability to make the right decision and cope with difficult situation during the development of the system with self-tuition and minimum supervision.
To achieve an insight and hands-on practical experience of analyzing, designing, testing and documentation of a real world project.
To prepare myself to face the real world in the computing industry with the experience I have gained in the past and will gain developing the system.
By developing this system I hope to demonstrate my capability of mastering a real word project.
1.5 Project Proposal
Although traditional auction houses still enjoy some popularity by restricting their trade on e few reserved items such as art effects and memorabilia's. They have in some way or other adopted technology to conduct their business. This is because of the fast pace of technological revolution that is taken over the way that business is conducted all over world. These days everything seems to be done on a computer and paper work is becoming thing of the past. It is well known fact that Information technology is so important in making the life of many businesses much easier. It is also essential that businesses depend on a computerized database system to provide or record information for running their business on daily basis.
Student Online Auction Systems Ltd's purpose is to set up a database driven website were customers primarily students sell and buy items from each other. The project will make use of the web-driven database technology to implement and set up fully functioning online business. The purposed online system will allow customers to browse, search without registering and only allow to buy, sell or both after registration.
In order to set up the system a variety of different software's will be used
ASP.net Visual studio
The history of internet auctions started in mid 1990s, and quickly become one of the most successful applications of electronic commerce. Perhaps EBay, the premier consumer-to-consumer (C2C) internet auction site, is generally perceived as pioneer for the industry. As the business to business (B2B) auctions transaction volume increases the potential for the industry is greater then that of conventional auctions. With auction sites such as eBay and U-Bid being common household names, it seems hard to believe that the online auction phenomenon is actually very young. But young it is. In fact, the world of online auctions as we know it found its beginning in the year 1995 with a company dedicated to holding auctions for geeks wanting to buy, sell and trade computers and peripherals. Today, this site, fondly known as eBay, has become the world's largest online marketplace hosting more than 100,000 auctions daily in 315 categories. With more than 40 million bids placed on eBay since its inception, it is no wonder that other entrepreneurs hoping to claim a piece of the internet auction market quickly followed suit. Far from being a lonely beacon in the world of online trading, eBay is now competing with several other extremely successful online auctions sites. In fact, hundreds of auction sites can be found listed in various auction directories on the web.
On these sites, consumer's world wide buy, sell and trade items ranging from rare collectibles to daily essentials. Virtually everything imaginable can be found on internet auctions at a great price.
2.2 What is an online Auction?
An online auction is an internet-based activity, which is used to negotiate prices for purchasing or sale of direct materials, capital or services. Online auctions can be used to sell: these are called Forward (or Seller) Auctions and closely resemble the activity on B2C auction websites. Companies have used forward auctions to sell off surplus assets or in times of shortages -highest bid wins. However, most companies are starting to use Reverse (or Buyer) Auctions, where purchasers seek 'market pricing', inviting suppliers to compete for business in an online event. Auctions can be either private/closed where there are typically few bidders who have no visibility of each other's bids, or open, where a greater number of participants are invited. In this case participants have visibility of either their rank or the bidding itself. Bidding on an internet auction is as simple as surfing the web. All you need to do is register at an auction site and begin browsing for merchandise. Once you find exactly what you are looking for, you can place a bid and monitor the bidding action with just a few clicks of your mouse. Most auctions sites also allow you to transfer payments through PayPal, an online payment system. That means that your personal credit card information is not given to any buyer or auction site directly. So, no matter whether you are searching for a one-of-a-kind antique or looking for a bottle of discount designer perfume, you can bet that you will find what you seek at the online auctions. http://www.caslon.com.au/auctionsprofile.htm
2.3 How do Online Auctions Work?
Internet auctions are giant flea markets. Sellers may offer one item at a time or multiple lots of the same item. In theory, online auctions run much like local auctions, but behind the scenes there is a collection of data going on continuously. Just like local auctions, there are sellers and bidders and winners and losers. Winners are expected to pay for what they bid on at the conclusion of the auction. But that is where the similarities between online and local auctions end.
At online auctions you will be required to register before you can buy or sell an item (s). This is required to track items you bid on or sell, keep up with the bids, determine the winning bids and build a database on seller and bidder feedback.
2.3.2 Winning Bids
The bidding for each auction closes at the scheduled time. In the case of sales of multiple lots, the participants with the highest bids at the close of the auction are obligated to buy the items. If no one bids at or above the reserve price, the auction closes without a winner. At the close of a successful auction, the buyer and seller communicate, usually by email, to arrange for payment and delivery of the goods.
2.3.3 Payment Options
Buyers may have several payment options, including credit card, debit card, personal check, cashier's check, money order, cash on delivery and escrow services. However, all sellers do not accept all forms of payment. Credit cards offer buyers the most consumer protections, including the right to seek a credit from the credit card issuer if the product is not delivered or if the product received is not the product ordered. Typically, sellers using business-to-person auction sites accept payment by credit card. But many sellers in person-to-person auctions do not. Usually they require payment by cashier's check or money order before they send the item to the winning bidder
2.3.4 Types of auctions.
There are two types of Internet auctions - business-to-person or person-to-person. Sellers of business-to-person auction sites have physical control of the merchandise being offered and accept payment for the goods. In person-to-person auctions, individual sellers or small businesses offer their items for auction directly to consumers. Generally, the seller, not the site, has physical possession of the merchandise. After the auction closes, the seller is responsible for dealing directly with the highest bidder to arrange for payment and delivery.
Internet auctions can be characterised in two ways: third-party auction sellers such as e-Bay, Amazon.com and Yahoo! that auction goods for others (either individual sellers or corporate chains), and direct auction sellers which create their own auctions online via their company websites. A substantial number of retailers and catalogue firms are taking advantage of the boom in these online auctions to unload merchandise and increase sales, and growth in the online auction category is now well documented. Catalogue marketers as diverse as The Sharper Image, Ross-Simons, Cameraworld.com, and CompUSA are all successfully auctioning products online. A business model is the mechanism by which a business intends to specify a value proposition or a value cluster for targeted customers, a financial model and a market offering
3.1 ebays Business Model
eBay has built an online person-to-person trading community on the Internet, using the World Wide Web. Buyers and sellers are brought together in a manner where sellers are permitted to list items for sale, buyers to bid on items of interest and all eBay users to browse through listed items in a fully automated way. The items are arranged by topics, where each type of auction has its own category.
eBay has both streamlined and globalized traditional person-to-person trading, which has traditionally been conducted through such forms as garage sales, collectibles shows, flea markets and more, with their web interface. This facilitates easy exploration for buyers and enables the sellers to immediately list an item for sale within minutes of registering.
Browsing and bidding on auctions is free of charge, but sellers are charged two kinds of charges:
When an item is listed on eBay a non-refundable Insertion Fee is charged, which ranges between 30 cents and $3.30, depending on the seller's opening bid on the item.
A fee is charged for additional listing options to promote the item, such as highlighted or bold listing.
A Final Value (final sale price) fee is charged at the end of the seller's auction. This fee generally ranges from 1.25% to 5% of the final sale price.
eBay notifies the buyer and seller via e-mail at the end of the auction if a bid exceeds the seller's minimum price, and the seller and buyer finish the transaction independently of eBay. The binding contract of the auction is between the winning bidder and the seller only.
3.2 Amazon's Business Model
Amazon's business model is one in which Amazon depends on third party to deliver information goods or services to end customers. There are three operational strategies that have helped Amazon.com to enhance its competitive advantage, including cost-leadership, customer differentiation and focus strategies (Saunders, 2001, pp.122-123). The first strategy, cost-leadership is pursued by Amazon.com by differentiating itself primarily on the basis of price. Due to this strategy, Amazon.com always makes sure that it offers the same quality products as other companies for a considerably less price. Their second strategy is customer differentiation. Amazon.com provided current and prospective customers with differentiation though design, quality or convenience and Amazon.com always selects a differentiator that is different among the competitor. So, Amazon.com consumers can recognize and differentiate its product from competitors (Saunders, 2001, pp.122-123). The last strategy that it uses, is a focus strategy. This strategy takes one of the two earlier strategies and applies it to a niche within the market (Saunders, 2001, pp.122-123). Amazon.com focuses on outstanding customer service as a niche but not the whole market because each niche has its own demand and requirement.
3.3 Customer interface
To a certain extent, the Amazon.com customer interface can be customized to each users preferences. When a user logs in to Amazon.com after purchasing, the website reconfigures and presents content that pertains to individual users, depending upon the users responses or profile (2004, p.188). For Amazon.com, collaborative-filtering software is used to tailor the website to each user through comparing each users purchases with the purchases of other users with similar preferences (2004, p.188). A list is then compiled of additional purchase recommendations, with suggestions across product categories as well, such as similar areas of interest in CD or DVD format (2004, p.188).
Additionally, the website promotes and fosters a community of customers through encouraging readers to submit book reviews and facilitating online discussions about previously read books (Spector, 2000, p.78). These activities provide users with an interactive component and give them an opportunity to contribute to the website's content as well as develop a group identity and sense of belonging which can lead to possible friendships (Spector, 2000, p.78).
3.4 Technology behind the Online Auctions
Secure Internet system is safer then handing over your card details on the phone. The application used to secure the online monitory system is the Secure Socket layer - SSL. This technology is a military strength encryption technology, which works in conjunction with secure servers. This technology scrambles and encrypts sensitive information such as credit card details with a code before passing by a merchant server from a PC and that of the company taking a customers money. One of the other applications is a system of digital certification.
When a user visits the website, intending to purchase over the Internet online, the website will display a lock sign on the toolbar below and provide information that the website is secure to use, the SSL lock will identify if the website is certified or not? The certificate is to authorise secure online transaction processing, which acts like an Identity card for the site and for the company behind the site. It's confirmed that the site belong to a register trader.
The Structured Systems Analysis and Design Method (SSADM) is thorough method of system development and if not understood fully it can lead into confusion into the mass of details available on the different stages of this methodology. SSDAM looks at the system from three different, but highly interdependent perspectives. The first is that of functionality or processing. This looks at the way in which data is passed around the system and the processes or activities that transform it, i.e. it sets out the functions provided for users by the system. The second is that of data. An information system (IS) exists only to store and act upon organisations data. By understanding the true nature and structure of data we get to real heart of the system. Data structures are far more constant than processing or functions, which tend to change fairly frequently; therefore it's the data view that forms the backbone of SSADM. The final view looks at the effects of time and real world events on the data held within the system. Whereas the function and data views are rather ‘snapshot' in nature, the events view is dynamic; it is specifically designed to model system behaviour over time.
188.8.131.52Advantages of using SSADM
Timelines: Theoretically, SSADM allows one to plan, manage and control a project well. These points are essential to deliver the product on time.
Usability: Within SSADM special emphasis is put on the analysis of user needs. Simultaneously, the systems model is developed and a comprehensive demand analysis is carried out. Both are tried to see if they are well suited to each other.6
Respond to changes in the business environment: As in SSADM documentation of the project′s progress is taken very seriously, issues like business objectives and business needs are considered while the project is being developed. This offers the possibility to tailor the planning of the project to the actual requirements of the business.
Effective use of skills: SSADM does not require very special skills and can easily be taught to the staff. Normally, common modelling and diagramming tools are used. Commercial CASE tools are also offered in order to be able to set up SSADM easily.
Better quality: SSADM reduces the error rate of IS by defining a certain quality level in the beginning and constantly checking the system.
Improvement of productivity: By encouraging on-time delivery, meeting business requirements, ensuring better quality, using human resources effectively as well as trying to avoid bureaucracy, SSADM improves the overall productivity of the specific project and the company.
Cuts costs: SSADM separates the logical and the physical systems design. So the system does not have to be implemented again with new hard -or software.7
184.108.40.206 Disadvantages of using SSADM
SSADM puts special emphasis on the analysis of the system and its documentation. This causes the danger of over-analysing, which can be very time and cost consuming. Due to various types of description methods, checks of consistence cannot be carried out. Especially with large systems, the outline diagram can become very unclear, because all relevant data flows have to be included. However, large companies carrying out various projects, can profit from the fact that SSADM gives the possibility to reuse certain techniques and tools for other projects. This reduces cost and time spent enormously in the long run. So, the danger of spending too much money on analysis can be compensated by the reuse of the developed systems and experience gained.
The unified modelling language defines the industry standard notation and semantics for properly applying that notation for software built using object-oriented (OO) or component based technology. UML2.0 provides common and consistent notation with which to describe (OO) and component software systems. The UML potentially decreases the learning curve for developers because they only need to learn the one modelling language.
220.127.116.11 Advantages of using UML
- Wide industry acceptance
- Wide range of tool support
- Consistent modelling notation
18.104.22.168 Disadvantages of using UML
- Modelling tools do not fully support it and sometimes get the notation wrong when they do
- Not yet complete
- Many developers only understand UML notations, often because most books and modelling tools do not go beyond the UML to address user interface modelling, or even business rules
- The full notation is overkill for most projects, most efforts only need a small subset of the notation
3.4.5 Using SSADM with UML
Complex information systems require a methodology for their development in a structured manner. Many different methodologies exist, each suitable for a particular type of application. In this report we develop a taxonomy covering two different classification features for methodologies targeted at the workflow area. Features identified include concerns, method structure, data gathering means, people involved, notations, adaptability, flexibility, exception, CASE tool. Unified Modelling Language (UML) and Unified Process are relatively strong on hard aspects and weak on soft aspects. Structured Systems Analysis and Design Method (SSADM) is perhaps the most comprehensive but some soft aspects are omitted. The combination of techniques such as UML and Workflow is identified as a way forward.
Hypertext Markup Language (HTML)
HTML is one of the next generations of Generalised Markup Languages (GMLs). HTML is very easy to use language for web designing. HTML allows web developers to format web page using set of markup tags provided by HTML.
HTML can be used within asp.net codes. This can only be made possible by using a asp.net function called asp followed by “(HTML)”, e.g. <aspx> “<p> Hello Word </p>”. HTML is used within asp.net to design the interface to make it easy to navigate through a site. HTML forms static Web sites, but with the use of ASP.net is can be dynamic.
ASP stands for Active Server Pages. This is one of Microsoft's latest software product. ASP.NET is built upon the .NET Framework. The .NET Framework consists of two main components: the common language runtime (CLR) and the .NET Framework class library. The foundation of the .NET Framework is the CLR. It is like an agent that manages codes at execution time for both Windows and ASP.NET applications. The class library is an object-oriented collection of reusable components. It can be used to develop applications for both Windows and the Web. The .NET Framework is a free download, but the development tools can be expensive.
ASP.NET is used by Web developers to create dynamic Web pages. It offers a set of reusable, predefined and ready to use controls. This control saves time as it minimises the amount of codes to be written.
22.214.171.124 Java Script
Microsoft SQL 2000
Microsoft SQL Server 2000 is a full-featured relational database management system (RDBMS) that offers a variety of administrative tools to ease the burdens of database development, maintenance and administration. It has features such as Enterprise Manager, Query Analyzer, SQL Profiler, Service Manager, Data Transformation Services and Books
3.5.0 Primary Research
Primary research involves getting original data directly about the product and market. Primary research data is data that did not exist before. It is designed to answer specific questions of interest to the business. Here a questionnaire was chosen to be the method of conducting market research in to online auction website as the primary source. A questionnaire with composed of ten questions were distributed into ten students at different times and days to get maximum answer ratio. See Appendix A
4.0 Fact finding analysis
All projects that involve system development must have thorough fact finding or investigation carried out before the specification, design and construction of the application. Its important for the project to be clear about what the system needs to do and this will require obtaining information about a potentially wide range of subjects.
4.0.1 Examining any existing documentation
Although there was physical documentation available to examine for existing companies such as e-bay, it was relatively small amounts of electronic journals available at the research web resources such as Mental.
Interviewing is the most and common techniques that is used almost in every computing or business project. This is because is an easy way of collecting information face-to-face with the people involved in the old or new system.
This process has started from the first day of the project by meeting both my supervisor Mrs Patricia Robertson, for more updates. The process started by drawing some business activity model (for more information please look at the BAM (Business Activity Model). These activities had to be change few several times to meet the systems requirements.
Through out the project it was important to interview regular users of the existing systems used by other companies such as e-bay and Amazon for feedbacks and updates. The project had faced some sit back at the beginning due to the fact that the original sole use of SSADM as methodology was not good idea, which made it hard getting the exact system requirement. With the help of some of the SSADM techniques such as the BAM and ER diagram coupled with UML CASE diagrams we managed to reach an over look of the system.
As part of the investigation process, questionnaires were prepared and handed out to some randomly selected people from the Westminster harrow Campus ,as they could be the new potential customers , these were filled out on the while they were in the Hall ways and student union centre.
Questionnaires generally tend to be an inexpensive method of getting people to provide information. The technique used will be closed questions. This will allow people to write their short answers on a fixed set of options, to avoid people getting bored by long open questions which they have no time for.
4.0.4. Analysis of the questionnaire
The questionnaire started with asking potential customers how often they visit Online auction? The group of people questioned consisted 60% of (19-30) years olds, 20% of the age (18) and 20% of the age (31-45), 30% of the participants answered that they visit online auction websites at least once a week 1% answered everyday 40% said they visit once a month and 20% percent said they never visit online auction websites. But perhaps more surprisingly of all questions, participants were undecided 50% yes and 50 % No when asked whether online auctions offer a better deal. There was however good result when participants were asked whether they actually sold or bought from online auctions the result was 60% yes and 40% no. see graph below
4.1.0 Market Positioning
Once a potential market segments have being identified and target audience selected, SOS Ltd would need to determine the positioning of its services amongst service industries in the market place. Effective management of marketing communication will enable the company's marketers to position their services in the mind of the customers, its therefore important for the company to position itself along side the Specialist online auction web site: such sites need to build a good reputation for the category focused on, so that the web site becomes the first choice for buying and selling items of the category. Clear market positioning: this is critical for an online auction web site to achieve success.
Philip kotler, Gary Armstrong (2008, P110)
4.2.0 SWOT Analysis
SWOT is acronym for strengths, weakness, opportunities and threats. SWOT analysis is useful framework for assessing an organisation and its marketing environment, summarising the main environmental issues in the form of opportunities and threats facing an organisation. Opportunities in an organisations external environment can be exploited only if it has the internal strengths to do so. If on the other hand, the organisation is not capable of exploiting these because of internal weaknesses, then they should perhaps left as they are.
Online student trading forum
Sense of community
Zero inventory held by company
No need for the traditional sales force
Difficulty to measure illegal activity on site
Difficulty to penetrate some markets
Lack of control in product descriptions that customers may give
Advertising for services
Continued expansion of product range
Increasing use of the internet
Add services that can be offered by other users
Thieves, Scam auctions
Increasing number of online auction sites
Rapid growth of Amazon.com
Increasing number of online stores
1/3 of internet users already registered on eBay
Although the market is saturated with online auction websites, the opportunity for SOS Ltd to enter the market and establish it's brand is here and very possible as long as the number of internet users is increasing the opportunities for e-businesses will increase in proportion.
(Philp Kotler, G.Armstrong 2008, P52)
4.3.0 PESTL analysis
Government introduces top up fee
Government reduces maintenance grants
Statistics show student debts are all time record high
Most students take on part-time jobs to survive
Economically not lot spare cash around
Very high attitude towards leisure
Very young Age (18-25)
Live with their parents or college campuses
Very active, health conscience
Moors Law the speed of micro- processors doubles every 18 months
Constant improvements in security with new technologies
Students with limited incomes are considered as early innovators
Adrian palmer (2004, p594)
4.4.0 Competitor analysis
Michael porter has presented a framework for competitor analysis. Competitor analysis has two primary targets to achieve. a) Obtaining information about important competitors. b) Using that information to predict competitor behaviour. The goal of studying competitor behaviour is to
- To know which competitor to compete with
- To know competitors strategies and plan of actions.
- To know how competitors react to the company action
- To influence the competitors actions to the companies advantage
4.4.1 Generic Strategies and Industry Forces
These generic strategies each have attributes that can serve to defend against competitive forces. The following table compares some characteristics of the generic strategies in the context of the Porter's five forces.
Generic Strategies and Industry Forces
Ability to cut price in retaliation deters potential entrants.
Customer loyalty can discourage potential entrants.
Focusing develops core competencies that can act as an entry barrier.
Ability to offer lower price to powerful buyers.
Large buyers have less power to negotiate because of few close alternatives.
Large buyers have less power to negotiate because of few alternatives.
Better insulated from powerful suppliers.
Better able to pass on supplier price increases to customers.
Suppliers have power because of low volumes, but a differentiation-focused firm is better able to pass on supplier price increases.
Threat of Substitutes
Can use low price to defend against substitutes.
Customer's become attached to differentiating attributes, reducing threat of substitutes.
Specialized products & core competency protect against substitutes.
Better able to compete on price.
Brand loyalty to keep customers from rivals.
Rivals cannot meet differentiation-focused customer needs.
Applying porter's generic strategies into online auction industry with E-bay.uk as the major competitor for SOAS Ltd. E-bay owns over 25% percent of the market share,(Nasdaq:E-bay) which makes to have monopoly over the Online Auction industry. E-bay and SOAS Ltd are both service industries where the customers are both suppliers and buyers. Here porter argues that is not good practice to apply all strategies into the same business model it's most likely that the firm will get stuck in the middle and will not achieve competitive advantage.
The Generic strategy best suited for the SOAS.Ltd as service industry is Cost Leadership, this generic strategy was chosen for two reasons, and first Porter also argues that for firm to become successful the firm must choose only one generic strategy to pursue. Secondly cost leadership is best suited because of the size of the business as small business with limited expenditure. EBay's listing fees range from 25 cents for items that start for sale at less than a dollar to US$4.80 for items on which the bidding begins at $500 or more. The so-called final value fee starts at 5.25 percent of the total sale price. The ability to offer lower fee price to e-bay buyers is another competitive advantage SOAS.Ltd that will probably give market success.
4.5.0 Online Auction Demand Analysis
Online Auction firms came under the perfect competition market structure, they have horizontal demand curve because these firms are classed as price takers there are lots of them in the online market there is freedom of entry. There is however strategies that online firm pursue to differentiate themselves from other competitors. E-bay for example pursues strong advertising campaign at all levels to promote their image and hence establish strong brand. E- bay has established itself as monopoly by building strong customer loyalty and excellent services.
The monopoly output is less than the perfectly competitive output.
(The monopoly price is higher than the perfectly competitive price.)
The less elastic the demand curve the higher price will be above marginal cost, companies such as e-bay does not have to lower their price as their demand curve will stay the same even if they raise their service charge to double the normal. Therefore the only way companies, such as SOAS.Ltd can compete with big firms is to lower their price below the monopoly firms.
John sloman (2005, P110)
5.0 System development Life cycle
During the research a lot of different area and subject were covered by formulating questions that need further research. These are: What is Information Technology? Why the Online Auction needs a computerized system? What is a Database and Database management System? Does Student Online Auction need a database system? What is the advantage of using the new system? Does the company need a Web site? All these questions will be answered below. In addition to that a research will be done on other Online Auction companies, who have already used a computerized system. How client-server architecture works and the different implementation technology will also be coved in this chapter.
5.0.2 What is information Technology?
Information technology refers to machine technology that is controlled by or uses information .i.e. a robot in car manufacturing plant. Computer Based Information systems are Subset of Information Technologies. Information technologies and information systems are also similar in the sense that they both provide useful data to users. Information system is defined as combination of hardware; software and telecommunication networks that people build and use to collect create and distribute data.
Until recently the use of information technology was confined to big companies or businesses that can afford the expense of developing a system that can meet their needs. Information technology helps businesses to gain that extra competitive advantage which helps them to generate more profit and be successful in their field.
5.02.1 Why SOAS Ltd needs an information system?
The Business in its entirety exists only in a server that hosts the website. Hence the name Student Online Auction System Ltd, where the Online refers to the website which is available online 24//7, also a computerized system helps businesses to perform effectively and help them to provide efficient service to their customers. By having a computerized system the company will increase the capacity and the speed of data and information processed.
5.02.2 What is a database and Database Management System?
A database is a collection of data that is organized so that its contents can easily be accessed, managed and updated. T. Connolly describes database as a shared collection of logically related data, designed to meet the information needs of an organization.
There are different types of database, such as relational database, hierarchical database and so on. The most prevalent type of database is the relational database, a tabular database in which data is defined so that it can be reorganized and accessed in a number of different ways. Hierarchical database supports the concept of repeating groups. It is fast and conceptually simple. However it is inflexible due to its flat file structure. The most limitation in hierarchical database structure is the inability to support many to many relationships (Connolly T. & Begg C., 2002).
Relational databases are more common than hierarchical databases. Unlike hierarchical database, relational database don't suffer form referential integrity problems. However they are more complex and slower than hierarchical database (Paul Beynon-Davies, 2004)
A database management system (DBMS) is a set of software programs that controls the organization, storage and retrieval of data (fields, records and files) in a database. It also controls the security and integrity of the database. “A database management system (DBMS) consists of a collection of interrelated data and a set of programs to access that data. The collection of data, usually referred to as the “database”, contains information about one particular enterprise.
The primary goal of a DBMS is to provide an environment that is both convenient and efficient to use in retrieving and storing database information. There are five major components in DBMS environment. These are hardware, software, data, procedure, and people (Connolly T. & Begg C., 2002).
DBMS software is application programs that are written in a third generation language (3GL) such as Pascal, COBOL or using a fourth generation language (4GL) such as SQL, Oracle, and Access.
Fourth generation language is a small scale database package that provides facilities for constructing environments to manage and extract data with very little technical skills. Microsoft Access is a 4GL database and also a relational database which means it allows creation of several data tables that can be linked together. It is a very powerful and useful application, which is ideal for small business applications.
MySQL performs much better than oracle and it's faster. However Oracle has more features than MySQL. Oracle database software is much expensive and usually requires a highly trained database administrator to operate. In most cases this software is used in large companies which have sophisticated program or data. The main difference between the two is that Mysql can not cope when put under the same load conditions as compared to oracle on the same hardware.
A true database management system provides many services not offered by conventional file systems. These are as follows: - (Connolly T. & Begg C., 2002)
Consistency: - The system ensures that the updates to a data don't violate a specified set of constraints.
Concurrency: - Several users can read and update the data simultaneously. This allows shared access to the database.
Access Control: - Users can have various access rights, and the system prevents unauthorised access to the data. Improved security.
Reliability and Recovery: - In case of crashes, backups and logs are automatically maintained by the system allow restoration of much of the lost data. It restores the database to a previous consistent state following a hardware or software failure.
Control of data redundancy: - It minimizes data duplication.
Data integrity: - It refers to the validity and consistency of stored data.
Why SOAS.Ltd needs a database?
The growing use of Information technology has led to greater emphasis on database methods and these methods have changed as databases have found new uses. Early database usually supported one organizational function. Thus, there may have been one database for the accounting system, another for the inventory system and so on. Most databases were part of batch systems that provide regular status reports for individual organisational functions. Many contemporary database systems however, differ from these early systems in numerous respects. For example, user functions are now integrated and many databases can support more than one organizational function.
The website will be connected to a database system where the customer's details, transaction details, and items sold and bought are stored. Customers can change update details as they go.
The company can improve their business and work effectively by having a database system. The benefits of having a database system are:
To give fast response on customer enquires.
Increase the capacity of data and information processed.
To improve the reliability and quality of service.
To help staff perform more efficiently and effectively.
To retrieve and input data easily.
To protect data or information against unauthorised access
5.1.0 Evaluation of Implementation Technologies available.
5.1.1 Client-server / architecture
The several computers at different locations that run the front-end of DBMS, which interfaces with the user is called the client-server architecture. The back-end is the server and the front-end is the client
Programs in a single computer, in a network can use client/server. The client/server process makes the process easy to interconnect programs that are distributed in various locations. It improves multi-user updating to a shared database.
Clients are an individual user's PCs or workstation that does a certain amount of processing on its own. Clients rely on servers for resources such as files, devices and even processing power. Clients have the following functionalities:
Clients are in charge of processing the application logic.
Handle request from user interface.
Accept and check syntax of user input.
Deliver response back to the user.
Servers are powerful computers or processes dedicated to managing disk drives (file server), printers, or network traffic. A server consists of one or more computers that receive and process requests from one or more client machines.
There are different form of servers, simple form and advanced form. Simple forms of servers are disk and file servers. Advanced forms of servers are database, transaction and application servers.
A server is typically designed with some redundancy in power, network, computing, and file storage. However, a machine with dual processors is not necessarily a server. An individual workstation can function as a server.
Server functionalities are as follows:
Accept and process database request from clients.
Provide concurrent database access.
Ensure integrity constraints not violated.
Provides recovery control.
Checks authorization of accessing data.
There are two types of client/server architecture. These are
5.1.2 Two-Tier Architecture
The two-tier architecture refers to a client process which requires some resources and a server, which provides the resource. It simply means two parts working together, where a client talks directly to a server without going through another server, which is very suitable for small environments.
In many two tier designs, most of the application portion of processing is in the client environment. The database management server usually provides the portion of the processing related to accessing data (often implemented in store procedures). Clients commonly communicate with the server through SQL statements or a call-level interface.
Fig 5.1 Two-Tier Architecture 
126.96.36.199 Advantages of the Two-tier architecture
Access to existing databases is wide
Because client and server reside in different computers parallel processing is enabled, hence increase in performance
Perform variety of functions.
Less network traffic.
Improves flexibility by allowing shared data access.
Improves usability by supporting user friendly interface.
Suitable for small environment application.
188.8.131.52 Disadvantages of the Two-tier architecture
Less suited for dispersed.
Heterogeneous environments with rapidly changing rules.
Complication of security.
The performance of the GOAT (GIS Oracle Access Tool)-application can be greatly impacted by the hardware configuration of the user's workstation.
5.1.3 Three-Tier Architecture
The three-tier client/server architecture is slightly more recent and there are many variations. The variation that applies here is the three-tier application server architecture. In Three-tier architecture the client machine acts as merely a front end and does not contain any direct database calls. Instead, the client end communicates with an application server, usually through a forms interface (Connolly T. & Begg C., 2002).
The three-tier client/server architecture improves the performance and flexibility for a bigger environment with large number of users when compared to the two tier client server architecture.
The three-tier application is an incremental improvement to the two-tier architecture. The flow of information is still essentially linear: a request comes from the client to the server; the server requests or stores data in the database; the database returns information to the server; the server returns information back to the client. In three-tier architecture, the first tier handles the user interface layer which runs on the end user's computer, the middle tier runs on the server and performs queuing, application execution and database staging. The third tier is the one which may run on a separate server called the database server.
Fig 5.2 Three-Tier Architecture 
The roles of the tiers are identified below:
Presentation tier - is responsible for physical input and output and 'lexicalizing' it to send to the application server and formatting data from the application tier.
Application tier (also called business tier) - is responsible for the business logic, i.e. turning logical inputs to logical outputs using data services.
Data tier (also called data services) - is responsible for retrieving/updating the stored data on instructions from the application server.
184.108.40.206 Advantages of Three-tier Architecture
The ability to separate logical components of an application ensures that applications are easy to manage.
Because communication can be controlled between each logical tier of an application, changes in one tier, for example, the database access tier, do not have to affect the client component tier, which would have to be redistributed if any changes are made to it.
Improves performance and flexibility.
Separating business logic from the database server makes load balancing easier.
It can be extended to n-tiers.
Can use reusable program modules for different application, which reduce development and migration costs.
Provides more flexible resource allocation. Can reduce network traffic by having the functionality servers strip data to the precise structure needed before sending it to the clients.
Clients don't have to understand SQL. This allows the organization, names or even overall structure of back end data to changes without requiring changes in the PC-based presentation clients.
220.127.116.11 Disadvantages of Three-tier Architecture
Creates an increased need for network traffic management, server load balancing and fault tolerance.
Maintenance tools are currently inadequate for maintaining server libraries.
Current tools are relatively immature and more complex.
The client/server architecture has become the ultimate structure for small and big corporate businesses. It combines the best concepts of centralized, robust infrastructure with decentralized capability and control. That is, it gives both IT manager and end users what they want and need. If it implemented properly, client/server architecture achieves the best balance between complexity, cost and ease of use with excellent scalability and reliability.
In view of the comparison result between the two-Tier and three-Tier Architecture; it is obvious that the three-tire is more appropriate for my current project scheme. Therefore this project is analyzed and built following three-tier Client/server architecture.
6.0 System Development Life Cycle.
The stages that all development projects go through are very similar, regardless of the methodology, techniques or tools that are used. What changes greatly from project to project is the way we choose to carry out and how we sequence them. It's important to understand how data processing systems are developed. The system life cycle is a model that can be used to explain the stages in the system development.
Software life cycle models describe phases of the software cycle and the order in which those phases are executed. There are a number of software development lifecycle models that can be used to develop software. These are waterfall model, V-Shape model, Incremental model, spiral model, prototyping model and so on.
6.1 Life cycle Models
6.1.0 Rapid application Model (RAD)
The RAD is a linear sequential software development process that emphasizes an extremely short development cycle. The RAD software model is a "high speed" adaptation of the linear sequential model in which rapid development is achieved by using a component-based construction approach.
RAD has two primary advantages: increased speed of development and increased quality. The speed increases are due to the use of CASE tools, the goal of which is to capture requirements and turn them into usable code as quickly as possible (David Avison & Guy Fitzgerald, 2002). The disadvantage of this model is its reduced scalability and reduced features. Reduced scalability occurs because a RAD developed application starts as a prototype and evolves into a finished application. Reduced features occur due to time boxing, where features are pushed to later versions in order to finish a release in a short amount of time.
6.1.1 Waterfall Model
This is the most common and classic of life cycle models, also referred to as a linear-sequential life cycle model. It is very simple to understand and use. In a waterfall model, each phase must be completed in its entirety before the next phase can begin. At the end of each phase, a review takes place to determine if the project is on the right path and whether or not to continue or discard the project. In waterfall model phases do not overlap, each stage takes place after another.
The advantage of this model is that phases are processed and completed one at a time. The out put of one stage is used as input of another. The disadvantages of the waterfall model are:
No going back once we reached to the testing point.
High amount of risk and uncertainty.
No working software will be produced until late during the life cycle.
Implementation and unit testing
Integration and System testing
Fig 6.1 Waterfall Lifecycle Model
6.1.2 V-shaped Model
V-Shape life cycle is a sequential path of execution of processes like waterfall model. Each phase must be completed before the next phase begins. The difference between V-shape and waterfall model is that in V-shape model testing is emphasize more than the waterfall model.
The advantage of this model is that it is simple and easy to use, each phase has specific deliverables. The disadvantage of this model is that it is very rigid like the waterfall model and also it doesn't provide a clear path for problems found during testing phases.
Fig 6.2 V-shape model
6.1.3 Prototyping Model
Prototyping is a model to show the users what the system going to look like, basically it is a system with out any functionality. It allows the designer to express an aspect of the design in the form of working code to the user. There are two types of prototyping. These are as follows:
18.104.22.168 Throw-away Prototype
Throw-away prototype is just a model of the system and ones it has been used to show what the system going to look like it would be thrown there is no need of that prototype, only we may need it to see again what the system objective was. The objective of this prototype is to validate or derive the system requirements.
This approach extends the requirements analysis process with the intention of reducing overall life cycle costs. Customers and end-users should resist the temptation to turn the throw-away prototyping into a delivered system that is put into use.
22.214.171.124 Evolutionary Prototype
Evolutionary prototype is used to demonstrate what the system going to look like and after that it is going to be changed to the actual system with out starting from the scratch. The objective of this prototype is to deliver a working system to end user.
Evolutionary prototyping approach a functioning system is available at the early stages of the software development and the system evolves as other functionalities are gradually built on.
6.1.4 Incremental model
Incremental model is a combination of the elements of a waterfall model with evolutionary prototyping. Multiple development cycles take place here, making the life cycle a “multi-waterfall” cycle. This approach is favoured by many object-oriented practitioners. It basically divides the overall project into a number of increments.
This approach gives customers a chance to have a good understanding and vision of the system to be developed in order to help them to make their decisions of the requirements for future increments.
The advantages of this model are as follows:
Generate working software quickly and early during the software life cycle.
More flexible and less costly to change scope and requirement.
Easier to test and debug during a smaller iteration.
Easier to manage risk.
Its disadvantage is that problem may arise pertaining to system architecture because not all requirements are gathered up front for the entire software life cycle.
Fig 6.3 Incremental model
6.1.5 Spiral Model
Spiral model is similar to the incremental model, with more emphases placed on risk analysis. This model has four stages: Planning, risk
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