E-ENVIRONMENT..environment document.pptx

E‑Environment
IS110 – ELECTRONIC BUSINESS

Social and legal factors
The social and cultural impacts of the Internet are
important from an e-commerce perspective since they
govern demand for Internet services and propensity to
purchase online and use different types of e-commerce
services.

Factors governing e-commerce service
adoption
The following factors are important in governing adoption of any e-commerce service:
1. Cost of access - This is certainly a barrier for those who do not already own a home
computer.
2. Value proposition - Customers need to perceive a need to be online.
3. Ease of use - This includes the ease of first connecting to the Internet using the ISP
and the ease of using the web once connected.

Factors governing e-commerce service adoption
4. Security - While this is only, in reality, a problem for those who shop online, the
perception may be that if you are connected to the Internet then your personal details
may not be secure.
5. Fear of the unknown - Many will simply have a general fear of the technology
and the new media, which is not surprising since much of the news about the Internet
will concern pornography, fraud and privacy infringements.

Understanding users’ access requirements
To fully understand online customer propensity to use online service we also need to
con- sider the user’s access location, access device and ‘webographics’ which
includes:
●Usage location (from home or work)
●Access device (browser and computer platform including mobile devices)

Understanding users’ access requirements
●Connection speed – broadband versus dial-up connections
●ISP
●Experience level
●Usage type
●Usage level.

Motivation for use of online services
1. Community
2. Entertainment
3. Product trial
4. Information
5. Transaction
6. Game
7. Survey
8. Downloads
9. Interaction
10. Search
11. Exploration
12. News

* Purchased online - Increasing numbers of consumers are now purchasing
online.
* Business demand for digital business services - The B2B market is more
complex than B2C in that variation in demand will occur according to
different types of organisation and people within the buying unit in the
organization.
1. Variation in organisation characteristics
2. Individual role

B2B Profiles
1. The percentage of companies with access - In the business-to-business market,
Internet access levels are higher than for business-to-consumer.
2. Influenced online - In B2B marketing, the high level of access is consistent with a
high level of using the Internet to identify suppliers.
3. Purchase online - This shows the importance of understanding differences in the
environment for e-commerce in different countries.

* Adoption of digitial business by businesses
* Privacy and trust in e-commerce
Ethical standards - are personal or business practices or behaviour
generally considered acceptable by society.
* Privacy legislation
Privacy - refers to a moral right of individuals to avoid intrusion into their
personal affairs by third parties.

The main information types used by the Internet marketer which are
governed by ethics and legislation:
1. Contact information
2. Profile information
3. Platform usage information
4. Behavioural information (on a single site)
5. Behavioural information (across multiple sites)

The guidelines on the eight data protection principles are
produced by legal requirements of the 1998 UK Data Protection
Act
These principles state that personal data should be:
1. Fairly and lawfully processed
2. Processed for limited purposes.
3. Adequate, relevant and not excessive.
4. Accurate
5. Not kept longer than necessary.
6. Processed in accordance with the data subject’s rights.
7. Secure.
8. Not transferred to countries without adequate protection.

Other e-commerce legislation
1. Marketing your e-commerce business
●Domain name registration
●Using competitor names and trademarks in meta- tags (for search engine
optimisation)
●Using competitor names and trademarks in pay-per-click advertising
●Accessibility law

2. Forming an electronic contract (contract law and distance-selling law)
●Country of origin principle
●Distance-selling law
3. Making and accepting payment
4. Authenticating contracts concluded over the Internet
5. Email risks

6. Protecting intellectual property (IP)
7. Advertising on the Internet
8. Data protection

Environmental and green issues related to
Internet usage
 Environmental and green issues related to Internet usage refers to the negative
impact that the use of internet and digital technologies have on the environment.
The future state of our planet is a widely held social concern. Technology is
generally seen as detrimental to the environment, but there are some arguments that
e-commerce and digital communications can have environmental benefits.

IMRG has identified six reasons why e-commerce
can be environmentally friendly in its "Go Green,
Go Online" campaign.
1. Fewer vehicle miles- Shopping is the most frequent reason for car travel in the
UK, accounting for 20% of all trips, and for 12% of mileage. A study by the Swiss
online grocer LeShop.ch calculated that each time a customer decides to buy online
rather than go shopping by car, 3.5 kg of CO2 emissions are saved.

2. Lower inventory requirements- The trend towards pre-selling online taking
orders for products before they are built, as implemented by Dell avoids the
production of obsolete goods that have to be disposed of if they don’t sell, with
associated wastage in energy and natural resources.

3. Fewer printed materials- Online e-newsletters and brochures replace their
physical equivalent so saving paper and distribution costs.
4. Less Packaging- Although theoretically there is less need for fancy packaging if
an item is sold online, this argument is less convincing, since most items like
software or electronic items still come in packaging.

5. Less waste- Across the whole supply chain of procurement, manufacturing
and distribution the Internet can help reduce product and distribution cycles.
Some even claim that auction services like eBay and Amazon Marketplace can
promote recycling and reuse.
6. Dematerialization- Better known as ‘digitization’, this is the availability of
products like software, music and video in digital form.

Taxation in E-environment
 Taxation in the e-environment refers to the application of tax laws and
regulations to electronic commerce transactions. As more businesses and
consumers conduct transactions online, governments are trying to adapt their tax
systems to ensure they continue to generate revenue from these activities.

Taxation in E-environment
 This can include the taxation of sales made over the internet, the taxation of
digital goods and services, and the collection of taxes on cross-border e-
commerce transactions. However, implementing taxation in the e-environment
can be challenging due to the global and borderless nature of the internet, and
the need to ensure compliance and fairness across different jurisdictions.

Tax Jurisdiction
 Tax jurisdiction refers to the country that has the right to collect taxes from a
transaction. In the past, this right was divided between the country where the
enterprise is based and the country where the income was generated. However,
in 2002, the EU passed laws that established that taxes on electronic services
should be collected in the jurisdiction where consumption takes place.

The tax principles in the UK interpretation of the
law implemented in 2003 for electronic services
• supply of websites or web-hosting services;
• downloaded software (including updates of software);
• downloaded images, text or information, including making databases available;
• digitised books or other electronic publications;
• downloaded music, films or games;
• electronic auctions; or
• Internet service packages.

The tax principles in the UK interpretation of the
law implemented in 2003 for electronic services
The UK VAT rules are as follows:
• if the supplier (residence) and the customer (source) are both in the UK, VAT
will be chargeable;
• exports to private customers in the EU will attract either UK VAT or local VAT;
• exports outside the EU will be zero-rated (but tax may be levied on imports);

Freedom-restrictive legislation
 Freedom-restrictive legislation in the e-environment refers to laws or
regulations that are enacted to protect consumer privacy or control the flow of
information on the internet, but may also be seen as overly restrictive and limit
the freedom of expression and access to information. This can include
censorship of online content, implementation of licensing and regulation laws,
filtering content, and direct censoring after dissemination, among others.

ECONOMIC AND
COMPETITIVE FACTORS
IS110 – ELECTRONIC BUSINESS

Economic and competitive factors
 A comprehensive framework for assessing an ‘e economy’ has been
‑
developed by Booz Allen Hamilton (2002). The report authors define the
e economy as:
‑
The dynamic system of interactions between a nation’s citizens, the businesses
and government that capitalise upon online technology to achieve a social or
economic good.

 Globalization can insulate a company to some extent from fluctuations in
regional markets.
Globalization:
i. Free movement of capital, labor, and products
ii. The increase of international trading and shared social and cultural values
iii. The move towards international trading in a single global marketplace.

Globalization
 Consequences for organizations that wish to compete in the global
marketplace;
A 24 hour order-
taking and customer service response capability;
‑
Regulatory and customs-
handling experience to ship internationally;
In depth understanding of foreign marketing environments to assess the
‑
advantages of its own products and services.

Globalization VS. Localization
 Tailoring e commerce services for individual countries or regions is referred
‑
to as localization; might include:
Different product needs;
Language differences;
Cultural differences

Localization
 The language that content is provided in.
Tone and style of copy.
Site design – certain colors or images may be unsuitable or less effective in
some countries.
Range of product offerings.
Product pricing.
Promotional offers used to encourage acquisition of customer address
Local contact points.

Localisation
Singh and Pereira (2005) provide an evaluation framework for the level of localisation:
1. Standardised websites (not localised). A single site serves all customer segments (domestic and
international).
2. Semi-localised websites. A single site serves all customers; however, there will be contact information about
foreign subsidiaries available for international customers. Many sites fall into this category.
3. Localised websites. Country-specific websites with language translation for international customers,
wherever relevant. 3M (has adapted the websites for many countries to local language versions. It initially
focused on the major websites).

Localisation
4. Highly localized websites. Country-specific websites with language translation; they also include other
localization efforts in terms of time, date, postcode, currency formats, etc. Dell ( and IKEA ( provides highly
localized websites.
5. Culturally customized websites. Websites reflecting complete ‘immersion’ in the culture of target customer
segments; as such, targeting a particular country may mean providing multiple websites for that country
depending on the dominant cultures present. Durex ( is a good example of a culturally customized website.

POLITICAL FACTORS
• The political environment in the context of e-commerce is shaped by the interplay of government
agencies, public opinion, consumer pressure groups, and industry-backed organizations.
• 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 or control taxation, as described in previous sections;
• providing organisations with guidelines and assistance for compliance with legislation;
• setting up international bodies to coordinate the Internet

POLITICAL FACTORS
•Political involvement in many of these activities is intended to improve the economic competitiveness of countries or groups of countries.
•Quayle (2002) summarises six strands of the UK government strategy for e-commerce which are intended to increase industry
competitiveness:
1. Establishing a brand in e-commerce both domestically and internationally.
2. Transform existing businesses
3. Foster e-commerce creation and growth
4. Expand the e-commerce talent pool
5. Provide leadership in international e-commerce policy development
6. Government online as a priority
◦ These goals are typical for many countries and specific targets are set for the proportion of people and businesses that have access,
including public access points for those who cannot currently afford the technology.
◦ Managers who are aware of these initiatives can tap into sources of funding for development or free training to support their online
initiatives. Alternatively, there may be incentives such as tax breaks for businesses or consumer adoption of the Internet and technology
companies can also take advantage of these.

POLITICAL FACTORS
Booz Allen Hamilton (2002) review approaches used by governments to encourage use of the Internet. They identify
five broad themes in policy:
1. Increasing the penetration of 'access devices': This includes initiatives such as providing home access through tax
reforms like Sweden's PC Tax Reform, or establishing public access points as seen in France's program to develop
7,000 access points by a specific target date. France also offers a tax incentive scheme where firms can make tax-free
gifts of PCs to staff for personal use.
2. Increasing skills and confidence of target groups: This involves training programs and campaigns aimed at
potentially excluded groups. For example, France's €150 million campaign to train the unemployed and Japan's IT
training programs that use existing mentors.

POLITICAL FACTORS
3. Establishing 'driving licences' or 'passport' qualifications: Some countries, such as France, Italy, and the
UK, have schemes that grant simple IT qualifications, particularly aimed at low-skilled groups to enhance their
skills and confidence in using the Internet.
4. Building trust or allaying fears: This includes initiatives such as the US 1998 Child Online Protection Act
which used schemes to provide 'kitemark'-type verification or certification of safe services to build trust among
users and allay their fears about online safety.
5. Direct marketing campaigns: According to the report, only the UK, with its UK Online campaign, is
marketing directly to citizens on a large scale to promote the use of the Internet.

E- GOVERNMENT
•The term "e-government," short for "electronic government," describes the use of information and
communication technologies (ICTs) to transmit information to citizens, businesses, and other stakeholders and to
offer government services. E-government refers to a broad range of digital activities that are meant to increase
government efficiency, effectiveness, and transparency.
•The National Office for the Information Economy, NOIE (www.noie.gov.au), has developed the following
themes for a strategic framework in Australia. This summarizes the various types of actions that several
governments are taking to promote e-business in their nations.
1. Access, participation, and skills - Encouraging all sectors of the community to actively participate in
the information economy.
2. Adoption of e-business - Working to provide more efficient communication between businesses to
improve the productivity of the Australian economy.
3. Confidence, trust, and security - Building public trust and confidence in going online and
addressing barriers to consumer confidence in e-commerce and online activities.

E- GOVERNMENT
3. Confidence, trust, and security - Building public trust and confidence in going online and
addressing barriers to consumer confidence in e-commerce and online activities.
4. E-government strategies and implementation - Leveraging new technologies for government
information provision, service delivery, and administration to transform government and improve
the lives of Australians.
5. Environment for information economy firms - Providing research on the environmental
variables that drive innovation and growth in the information economy and support its future
development.
6. International dimensions - Representing Australia in world forums to make decisions that may
affect national interests in the information economy in cooperation with other government bodies.

TECHNOLOGY INNOVATION AND
TECHNOLOGY ASSESSMENT
• One of the great challenges of managing e-commerce is the need to be able to assess which new
technological innovations can be applied to give competitive advantage.
•When a new technique is introduced, a manager faces a difficult decision as to whether to:
◦ Ignore the use of the technique, perhaps because it is felt to be too expensive or untried, or the manager
simply doesn’t believe that the benefits will outweigh the costs
◦ Enthusiastically adopt the technique without a detailed evaluation since the hype alone convinces the
manager that the technique should be adopted;
◦ Evaluate the technique and then take a decision whether to adopt it according to the evaluation.
Depending on the attitude of the manager, this technology adaption can be summarize as:
◦ Cautious, ‘wait-and-see’ approach.
◦ Risk-taking, early-adopter approach.
◦ Intermediate approach.

This diffusion–adoption process was
identified by Rogers (1983), who
classified those trialling new products
as innovators, early adopters, early
majority, late majority, or laggards.
The figure can be used in two main
ways as an analytical tool to help
business managers.

•First, it can be used to understand the stage customers have reached in adoption of technology, or any product. For example, the
Internet is now a well-established tool and in many developed countries we are into the late majority phase of adoption, which
suggests that it is essential to use this medium for marketing purposes.
• Second, managers can look at adoption of a new technique by other businesses – from an organisational perspective. For
example, an online supermarket could look at how many other e-tailers have adopted personalisation to evaluate whether it is
worthwhile adopting the technique.
• An alternative graphic representation of diffusion of innovation has been developed by technology analyst Gartner for assessing
the maturity, adoption and business application of specific technologies hype cycle.
• Hype cycle is graphic representation of the maturity, adoption and business application of specific technologies.

1. Technology trigger – The first phase of a hype cycle is the ‘technology trigger’ or break-through, product launch or
other event that generates significant press and interest.
2. Peak of inflated expectations – In the next phase, a frenzy of publicity typically generates over-enthusiasm and
unrealistic expectations. There may be some successful applications of a technology, but there are typically more
failures.
3. Trough of disillusionment – Technologies enter the ‘trough of disillusionment’ because they fail to meet
expectations and quickly become unfashionable. Consequently, the press usually abandons the topic and the
technology.
4. Slope of enlightenment – Although the press may have stopped covering the technology, some businesses continue
through the ‘slope of enlightenment’ and experiment to understand the benefits and practical application of the
technology.
5. Plateau of productivity – A technology reaches the ‘plateau of productivity’ as the benefits of it become widely
demonstrated and accepted. The technology becomes increasingly stable and evolves in second and third generations.
The final height of the plateau varies according to whether the technology is broadly applicable or benefits only a niche
market.

◦ Trott (1998) identifies different requirements that are necessary within an organisation to be able to
respond effectively to technological change or innovation.
◦ These are:
◦ Growth orientation – a long-term rather than short-term vision.
◦ Vigilance – the capability of environment scanning.
◦ Commitment to technology – willingness to invest in technology.
◦ Acceptance of risk – willingness to take managed risks.
◦ Cross-functional cooperation – capability for collaboration across functional areas.
◦ Receptivity – the ability to respond to externally developed technology.
◦ Slack – allowing time to investigate new technological opportunities.
◦ Adaptability – a readiness to accept change.
◦ Diverse range of skills – technical and business skills and experience.

The problem with being an early adopter (as an organisation) is that the leading
edge is often also referred to as the ‘bleeding edge’ due to the risk of failure.
New technologies will have bugs, may integrate poorly with the existing
systems, or the marketing benefits may simply not live up to their promise. Of
course, the reason for risk taking is that the rewards are high if you are using a
technique that your competitors are not, then you will gain an edge on your
rivals.

Approaches to identifying emerging technology
Emerging technology identification approaches for gaining a competitive edge, as described by PMP (2008), include:
1. Technology networking: Monitoring trends through personal networks and technology scouting, and sharing
information through infrastructure and processes such as extranets and face-to-face events.
2. Crowdsourcing: Involving customers, partners, or inventors in discussions about new product developments or business
challenges through online marketplaces such as InnoCentive, where cash prizes are awarded for problem-solving.
3. Technology hunting: Conducting structured reviews of capabilities of start-up companies to assess their relevance for
improving own capabilities and potentially entering into formal arrangements.
4. Technology mining: Conducting traditional literature reviews of technologies described in published documents, using
tools such as Autonomy or keyword searches through services like Google Alerts.
It is important for e-commerce managers to take a balanced approach and not dismiss new techniques as fads or irrelevant
to their market. Benchmarking best practices from different sectors and regularly reviewing emerging technologies is
crucial for staying competitive in the rapidly evolving digital landscape. Waiting for others to innovate may result in losing
valuable time.

Figure 4.15 illustrates the choices companies have in adopting new
technologies over time. The stepped curve represents the variations
in technology, ranging from small incremental changes to
significant innovations that deliver value to customers and improve
business performance. Line A represents early adopters who use
innovative business techniques and stay ahead of the technology
curve. Line C represents conservative adopters who lag behind in
adopting available technology potential. Line B, the middle ground,
is considered ideal, where companies monitor new ideas, learn from
early adopters, and adopt technologies that positively impact their
business.

Currently, the growth of mobile technology
is a significant trend in consumer adoption
of digital media. Multiscreening, or the use
of mobile platforms for various purposes,
should also be considered for its impact on
consumers, as shown in Figure 4.16, which
introduces common uses of mobile
platforms discussed further in Chapter 11.

E-ENVIRONMENT..environment document.pptx

More Related Content

Similar to E-ENVIRONMENT..environment document.pptx

More from BlessGely

Recently uploaded

E-ENVIRONMENT..environment document.pptx

Editor's Notes