it includes the concept of electronic environment and SLEPT framework for macro environmental factor analysis. SLEPT framework deals with various Social, Legal, Economical, Political and Technological factors.

1. Electronic Environment
Mr. Roshan Bhattarai
Kathmandu, Nepal

2. Introduction
• The manager has to constantly scan the environment and
– assess which changes are relevant to their sphere of influence
• The trick for managers is to identify those factors
– which are important in the context of e-commerce and
– which are critical to competitiveness and service delivery
• Organizations that either do not monitor these environmental
factors, or those that do not respond to them adequately
– will not remain competitive and may fail
• The process of monitoring the environment (Micro and
Macro Envioronment) is usually referred to as environmental
scanning.
• Environmental analysis is required to evaluate different
information and respond accordingly.

3. E-environment
• An electronic environment in business includes every
electronically-based resource in the organization
• If an organization conducts business activities through
– the Internet or
– any other electronic-based communications system
including websites, e-mail, search engine optimization strategies, social
media marketing, webinars etc, they are conducting these activities in
a digital environment
• As businesses conduct interactions, transactions and
relationships within their e-environment, they also deal with
other organizations' electronic environments
• Ultimately, the global business community participates in a
comprehensive electronic environment

4. SLEPT framework for macro environmental
factor analysis
• Framework to assess an organization’s external environmental
influence on it
• Provides an overall picture of the macro environment to
identify threats and opportunities
• Gives an understanding of broad and long term trends and
makes the firm in a better position for strategic decision
making
• It considers five factors affecting the macro environment:
– Social
– Legal
– Economical
– Political
– Technological

5. a) Social factors
• include the influence of consumer perceptions in
determining usage of the Internet for different activities
• Social factors important in governing adoption of any e-
commerce service are:
i) Cost of Access
– Cost of computing device, cost of ISP etc
– Free access would certainly increase adoption
ii) Value proposition (Perceived benefit)
– Customers need to perceive a need to be online – what can the
Internet offer that other media cannot?
– Examples of value propositions include access to more supplier
information and possibly at lower prices.

6. iii) Ease of use (Skills)
– This includes the ease of first connecting to the Internet using
the ISP and the ease of using the web once connected.
iv) Security
– The perception generated may be: if you are connected to the
Internet then your personal and credit card details may not be
secure.
– Probably it take many years for this fear to diminish as using the
Internet slowly becomes established and standard way of
purchasing goods.
v) Fear of the unknown
– Many will simply have a general fear of the technology and the
new media
– Not surprising since much of the news about the Internet non-
adopters will concern fraud and privacy infringement (violation)

7. vi) Motivation for use of online services
– Community, Entertainment, Product trial, Information, Survey,
download etc.
vii) Experience level, Usage type, Psychographic segmentation
(values, attitudes, beliefs, interests, personality traits etc)
viii) Adoption of e-business by small and medium sized
enterprises

8. b) Legal Factors
• Include laws and regulations of the state/country
• Determine method by which products can be promoted and
sold online
Important legal issues to assess are listed below:
i) Data protection and privacy law
– refers to the laws that deal with the regulation for storing and using of
personal information collected by government, public and private
organizations (For eg: Individual Privacy Act 2075 (2018) in Nepal)
– http://www.lawcommission.gov.np/en/archives/category/documents/
prevailing-law/statutes-acts/the-privacy-act-2075-2018
– https://www.gov.uk/data-protection
– The General Data Protection Regulation (GDPR) is a regulation in EU
law on data protection and privacy in the European Union (EU) and
the European Economic Area (EEA)
– Federal Laws Related to Identity Theft
(https://www.everycrsreport.com/reports/RL31919.html#_Toc216156
012)

9. ii) Brand and trademark protection and other Intellectual
property rights
– Domain name registration (Domain Name Laws)
– Trademark protection laws
– Copyright protection laws
– Patent protection laws
iii) Online advertising law
– Permission Marketing (Opt-in/Opt-out policy)
– truth-in-advertising rule requires advertisers to be honest about
their products or services, enforced by the Federal Trade
Commission (US)
– Anti-spam legislation: The CAN-SPAM Act (2003), which stands
for the Controlling the Assault of Non-Solicited Pornography and
Marketing Act, sets requirements for businesses to abide by
when sending marketing or advertising e-mail

10. iv) Contract law
– A contract is an agreement that a party can turn to a court to
enforce
– Contract law is the body of law that relates to making and
enforcing agreements
– Both companies and consumers use contracts when they buy
and sell goods, when they license products or activities, for
employment agreements, for insurance agreements etc
v) Tax jurisdiction
– A jurisdiction is the taxation authority that imposes the tax.
– determines the tax amount and the way in which payment of
the entire tax amount is divided between different tax
authorities.
– Under the pre-electronic commerce system of international tax
treaties, the right to tax was divided between the country
– where the enterprise that receives the income is resident and
that from which the enterprise derives that income

11. Economic factors
• Variations in the economic performance in different countries
and regions affect spending patterns and international trade
• Economic health and competitive environment in different
countries will determine the e-commerce potential of each
• Economic forces are factors such as
– inflation,
– interest rates,
– employment rates etc that influence levels of production and
demand for goods and services
• These factors dictate the availability and affordability of
production resources
– as well as the abilities of consumers to afford products or services

12. i) Levels of Inflation
• Inflation is the sustained rise in the prices of products
• Rising inflation affects the demand for e-commerce goods or
services
– because it reduces the number of items consumers can afford
• This affects your e-commerce business particularly if you deal
in nonessential or luxurious items
• Consumers actually restrict their spending to essential items
during periods of high inflation
• Inflation also increases the costs of inputs, such as electricity,
Internet, online advertising, computer maintenance etc
• The adverse effects of high costs of operations, coupled with
falling demand for e-commerce products
– reduce profits

13. ii) Rates of Interest
• Low interest rates encourage borrowing
– while high interest rates discourage borrowing
• Low interest rates boosts e-commerce business
– because it increases the amount of money in circulation
– Increases lending and borrowing activities in the financial sector
• Consumers can spend more on your e-commerce products
when they have more money at their disposal
• High interest rates suppress money circulation and suppress
demand for e-commerce products
• They also increase the financing costs of your business,
especially if you borrow loans with variable interest rates

14. iii) Trends of Employment (Rate of employment)
• Increasing employment rates translate to growing demand for
e-commerce products
– because more people earn income
• High unemployment rates signal worsening economic
conditions
– as no new jobs are created and many people lose jobs
• As a result,
– the demand for e-commerce products declines with increased rates
of unemployment and vice versa

15. iv) Exchange rates
• Fluctuations on exchange rates increases business risks
(International trade)
v) Economic growth rates (GDP, GNP, PCI etc)
• Emergence of multinational companies due to increase in
GDP, PCI etc
• Impacts on FDI

16. Political factors
The political environment is shaped by the interplay of
– government agencies,
– public opinions,
– consumer pressure groups and
– industry-backed organizations
• Eg of Consumer pressure groups
– CAUCE (Coalition against Unsolicited E-mail)
– founded in 1997 in US
– All volunteer Internet end-user advocacy organization
– Consulting with governments, law enforcing agencies,
industry associations etc

17. • Eg of Industry-backed organizations : TRUSTe
– offers a set of privacy assurance programs
– that enable organizations that collect or process personal
information to demonstrate responsible data collection and
processing practices
– consistent with regulatory expectations and standards for
privacy accountability
• National governments and multi-national organizations
– have an important role in determining the rules by which
Internet governed and controlled

18. • Political environment also includes government policies and
intervention in the economy like trade control, competition
regulation, consumer protection laws etc.
• Political action enacted through government agencies to
control the adoption of the Internet can include:
– promoting the benefits of adopting the Internet for consumers
and business to improve a country’s economic prosperity,
– enacting legislation to protect privacy,
– control taxation by providing organizations with guidelines and
assistance for compliance with legislation

19. – setting up international bodies to coordinate the Internet such
as ICANN (Internet Corporation for Assigned Names and
Numbers) and other independent organizations controlling
Internet technology
– Provide leadership in international e-commerce policy
development
– Priority on online government services like tax payment,
bidding etc.
– Government stability and related changes
– Import restrictions on quality and quantity of product etc

20. Technological factors
• changes in technology offer new opportunities to the way
products can be developed and marketed
• Technological environment affects the manner in which the
resources of the economy are converted into output
• The rapid development of technology requires quick reaction by
businesses
– in order to survive in an emerging competitive environment and
– keep up with new trends and innovative services which other
competitors might be offering
• The technological factors can include both products and
processes and can present opportunities and threats
– but it is vital for competitive advantage and is a successful driver
in globalization

21. The factors includes:
• Rapidity of technological change
• Levels of technological awareness
• Cost of technology adoption
• Research and Development in technological aspects (Inventions and
Innovations)
• Technology legislation (IT related laws like cyber law, Privacy law etc)
• Technology infrastructure (Web/Broadband/Consumer Access Devices
etc)
• Security Systems: encryptions, digital certificates, SSL protocol etc.
• New ways to communicate with consumers e.g. Social media, Email, e-
CRM etc
• Advancements in Machineries and Equipments
• Technology incentives (for attracting and retaining technology
companies and startups)

22. Technology Assessment
• scientific, interactive, and communicative process that aims to
contribute to the formation of public and political opinion on
societal aspects of science and technology
• form of policy research that examines short- and long term
consequences (for example, societal, economic, ethical, legal)
of the application of technology
Technology assessment institutions around the world
• Centre for Technology Assessment (TA-SWISS), Switzerland
• Institute for Technology Assessment and Systems Analysis, Germany
• The Danish Board of Technology Foundation, Copenhagen
• Norwegian Board of Technology, Oslo
• Parliamentary Office of Science and Technology (POST), London etc

23. THANK YOU !!