E-business Environment ITU Spring 2013. Figure 2.1 The environment in which e-business services are...

E-business EnvironmentITU Spring 2013

Figure 2.1 The environment in which e-business services are provided

E-business environment

From supplier- to consumer?

The Value-Chain

E-business environment

Business model

Timmers (1999) defines a ‘business model’ as:

An architecture for product, service and information flows, including a description of the various business actors and their roles; and a description of the potential benefits for the various business actors; and a description of the sources of revenue.

Figure 2.13 Alternative perspectives on business models

Factors in the macro-environment affecting e-commerce adoption

•Social factors•Legal and ethical factors•Economic factors•Political factors•Technological factors

Issues• First exercise:

• List all the social, legal/ethical, economical, political and technological issues - that you need to consider in order to avoid damaging relationships with users, competitors, suppliers, government - or which may leave the e-business facing prosecution, or being harmed in other ways.

•Social factors• Internet adoption•Online buyer behaviour•Online demand for business services

Factors governing Internet adoption

• Cost of access• Value proposition• Ease of use• Security• Fear of the unknown

Figure 4.1 ‘Waves of change’ – different timescales for change in the environment

Figure 4.2 Variation in broadband subscribers per 100 inhabitants, by technology, December 2007Source: OECD (www.oecd.org/sti/ict/broadband)

Figure 4.3 Percentage by category who bought offline after researching onlineSource: BrandNewWorld: AOL UK / Anne Molen (Cranfield School of Management) /Henley Centre, 2004

Trust in different information sources

• The role of social media and friends in influencing sales was highlighted by this research from EIAA (2008) which rated key sources for research indicating the level of trust amongst European consumers for different online and offline information sources:• Search engines (76%)• Personal recommendations (72%)

Trust in different information sources(Continued)

• Price comparison web sites (61%)• Web sites of well-known brands (59%)• Newspapers/magazines (58%)• Customer web site reviews (58%)• Expert web site reviews (57%)• Retailer web sites (56%)• Sales people in shops (50%)• Content provided by ISPs (38%).

Figure 4.4 Development of experience in Internet usage

Online buyer behavior

Figure 4.5 Variation in purchase rates of online products and services in EuropeSource: European Interactive Advertising Association (www.eiaa.net), Mediascope Eupore 2008

•Legal and ethical factors1. Privacy – what information is held about

the individual?2. Accuracy – is it correct?3. Property – who owns it and how can

ownership be transferred?4. Accessibility – who is allowed to access

this information, and under which conditions?

Table 4.2 Significant laws which control digital marketing

Table 4.2 Significant laws which control digital marketing (Continued)

Ethical issues and data protection

• Ethical issues concerned with personal information ownership have been usefully summarized by Mason (1986) into four areas:

1. Privacy – what information is held about the individual?2. Accuracy – is it correct?3. Property – who owns it and how can ownership be

transferred?4. Accessibility – who is allowed to access this information, and

under which conditions?

Ethics – Fletcher’s view• Fletcher (2001) provides an alternative perspective, raising

these issues of concern for both the individual and the marketer:

1. Transparency – who is collecting what information?2. Security – how is information protected once collected by a

company?3. Liability – who is responsible if data is abused?

An example of controversy: Facebook Terms of Use

By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise, on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing.You may remove your User Content from the Site at any time. If you choose to remove your User Content, the license granted above will automatically expire, however you acknowledge that the Company may retain archived copies of your User Content. Facebook does not assert any ownership over your User Content; rather, as between us and you, subject to the rights granted to us in these Terms, you retain full ownership of all of your User Content and any intellectual property rights or other proprietary rights associated with your User Content.

http://www.facebook.com/terms.php?ref=pf

The eight principles for data protection

• Fairly and lawfully processed• processed for limited purposes• adequate, relevant and not excessive• accurate• not kept longer than necessary• processed in accordance with the data subject's rights• secure• not transferred to countries without adequate protection

www.dataprotection.gov.uk

Economic / political• Ensuring companies competitiveness

• Funding for education and technology• Promoting new technology for example, broadband 12% in UK,

70% Taiwan, South Korea• Achieving government efficiencies

• E-government – all UK services online by 2005• Singapore ‘Intelligent Island’

• Taxation regimes• Legislation for offshore trading

Internet Penetration RegionsRegion PenetrationNorth America 78.6 %

Oceania / Australia 67.6 %

Europe 63.2 %

Latin America/Caribbean 42.9 %

Middle East 40.2 %

Asia 27.5 %

Africa 15.6 %

WORLD TOTAL 34.3 %

http://www.internetworldstats.com

Leaders and laggards in e-commerce

Digital Economy Score

Figure 4.11 A framework describing the e-economySource: Booz Allen Hamilton (2002). International E-Economy: Benchmarking The World’s Most Effective Policy for the E-Economy . Report published 19 November, London.www.e-envoy.gov.uk/oee/oee/nsf/sections/summit_benchmarking/$file/indexpage.htm

•Political factors• The political environment• Internet governance• E-government policies

Government agencies

Public opinion Consumerpressure groups

The political environment

Technological issues• Rate of change

• Which new technologies should we adopt?

• Monitoring for new techniques• Evaluation – are we early adopters?• Re-skilling and training

• Are our systems secure?

Figure 4.12 Diffusion–adoption curve

Figure 4.13 Example of a Gartner hype cycleSource: Gartner (2005) Gartner’s Hype Cycle Special Report for 2005

Figure 4.15 Alternative responses to changes in technology

What action should e-commercemanagers take when confronted by new technologies?

Environmental drivers and government initiatives

Environment affect the strategy

• So what is strategy…?

My simple take on strategy

Strategy = Desired future – Current status

So strategy is all that happens between the offset and at the point we decide that we are at the goal

Is it a plan?A learning curve?

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