IM Chapter 10 Exam 3 PowerPoint
Leadership
Successful e-commerce is only possible through dynamic and strong leadership
•The integrated benefits: - cross-promotion
-Benefit from c____-pro________ of shared products, shared customer information, increased large-quantity purchase leverage, and economies of scale by using the same distribution channels in_______ b______
Have an e-commerce strategy - haphazardly
-Companies should ensure that e-commerce is not implemented hap_______ implement a strong strategic plan Have an _-c_____ st____
-Countries with attractive demographic characteristics •An Internet population of at least 5% •A high literacy rate •Participation in at least one free trade agreement •A government with a viable legal system
-Cou______ with att______ demo_______ cha________ •An Internet population of at least #% •A high lite____ rate •Participation in at least one fr__ tr___ agre________ •A government with a via___ le___ sy_____
-Countries with market inefficiencies •E.g., formerly state-controlled economies
-Cou________ with ma____t inef________ •E.g., formerly state-controlled economies
Efficiencies
-Electronic communication and processes can be very efficient. eff_____
Measure success
-Have metrics in place to measure e-commerce success. Obvious output success measures include website hits, number of new e-commerce customers, e-commerce revenue, and number of customers learning about new products to purchase through internet channels. Me________ su_______
The return/receipt burden & cost of delivery
-If pattern follows catalogue sales, companies should expect a 30-40% return rate for online purchases. ret____/rec____ bur____ & c___ of de_______
•The independent benefits: - venture
-Move faster and be more entrepreneurial when freed from corporate bureaucracy; it can seek ve________ capitalist funding. ind_____ b________
•Develop appropriate e-commerce systems. - flows - flows
-Remove traditional barriers to ensure increased coordination and information fl___ among the various functional areas. -To fully benefit from e-commerce, there has to be a cultural transformation in how information fl___ through the organization Dev_____ app________ _-c______ sy____
Technology
-The technology to reach customers is readily available. te_____
Costs of site construction, maintenance, upgrades
-Website creation in multiple languages, currencies and tax locations is expensive. Can cost Millions/year. C____ of site con_______, main________, up_______
Relative advantage
-can e-commerce provide advantages to the company when performing a task compared to previous ways of doing the same task?
managers characteristics
-does the management of the company have positive attitudes towards adoption of e-commer?
Telecommunications
-infrastructure to move bits or computerized information (ex: download software)
Payment
-infrastructure to move money (ex: paypal, e-commerce retail stores)
organizational readiness
-is the company ready to adopt e-commerce?
Cost reduction
-relatively inexpensive to reach international customers via Web co__ red_______
Channel conflicts
A company's website(s) can conflict with distributors and retailers selling the company's products. ch______ con_____
A Localized Web Site
A company's websites around the world are adapted to the local culture in terms of values, appeals, symbols, and even themes in the communication content. a lo_______ w__ si__
Additional Operational Challenges for an E-Commerce Business •Cybercriminals are becoming increasingly sophisticated. •AS the Internet becomes a crucial medium of international trade and commerce, countries are also being urged to improve Internet security •MNC's are also encouraged to beef up their Internet security
Additional Operational Challenges for an E-Commerce Business •Cyb_______ are becoming increasingly sophi________. •AS the Internet becomes a crucial medium of international trade and commerce, cou______ are also being urged to improve Internet security •MNC's are also encouraged to b___ u_ their Internet security
Customer trust and satisfaction
Companies must determine whether customers abroad will trust and be satisfied. cus_______ tr____ and sat_______
Additional Operational Challenges for an E-Commerce Business •Many companies have difficulty finding partnerships and alliances with customers or third parties •Because of shortage of people with e-commerce skills it is difficult attracting, retaining, and developing employees in the e-commerce unit •Inadequate e-commerce training •Finding ways to provide individuals with growth opportunities & job satisfaction drives employee retention •Deciding what e-commerce functions to outsource is difficult
Additional Operational Challenges for an E-Commerce Business •Many companies have difficulty finding par________ and al______ with cus______ or third pa_____ •Because of shortage of people with _-c_______ sk____ it is difficult at_______, reta_______, and dev______ employees in the e-commerce unit •Inadequate e-commerce tra_______ •Finding ways to provide individuals with g_____ opportunities & job satisfaction drives employee retention •Deciding what e-commerce functions to outsource is dif____
C2C - eBay - C2C
Anyone selling online eB__ facilitates _2_ transactions
Easily copied models
Competitors can easily see and copy product/service/business model. ea_____ co_______ mo_______
Standard or local websites
Decide whether to standardize websites or tailor them to local contexts. st______ or lo_____ we_______
E-Commerce Structure: Integrated or Autonomous •The company needs to decide how e-commerce fits into its existing organizational design. •Right mixture of "bricks" and "clicks" -How much to integrate the Internet into traditional business
E-Commerce Structure: Integrated or Autonomous •The company needs to de____ how e-commerce fits into its exi_____ org________ des___. •Right mi_____ of "bri___" and "cli___" -How much to inte______ the Inte___ into tra______ business
E-Commerce Structure: Integrated or Autonomous •The degree of interaction between brick-and-mortar operations can occur anywhere in the value chain. •The degree of integration can range from near seamless operations to mostly independent operations
E-Commerce Structure: Integrated or Autonomous •The degree of int_______ between brick-and-mortar op______ can occur an______ in the value chain. •The degree of integration can range from near sea______ operations to mostly inde________ operations
B2G - governments - companies - negotiations
Facilitation of business between gov______ and com_____ as well as facilitation neg____________
Fundamentals of E-Commerce Strategy & Structure •E-commerce is evolving quickly. •The failure of many start-ups demonstrate that the Internet economy is not without risk •Each layer of the Internet economy has its threats and opportunities
Fundamentals of E-Commerce Strategy & Structure •E-commerce is evolving qu_____. •The failure of many s______-u__ demonstrate that the Inte_____ economy is not without ri__ •Each layer of the Internet economy has its th_____ and op________
Globalizing Through the Internet •The increase in information exchanges and efficiency due to the Internet and e-commerce has made it possible for companies to reach customers worldwide -The Internet is enabling the emergence of a new form of multinational, the born-global firm. •Born-global firms are able to obtain a significant portion of their revenues from sales in international markets.
Globalizing Through the Internet •The increase in information exc____ and eff_____ due to the Internet and e-commerce has made it possible for companies to reach customers wo______ -The Internet is enabling the emergence of a new form of multinational, the b___-gl____ firm. •Born-global firms are able to obtain a significant portion of their rev_____ from sales in international markets.
Globalizing Through the Internet •Though a website gives the world access to firm's goods and services, the internationalization challenges faced by traditional MNCs remain. -The firm must still solve the global - local dilemma, and deal with national culture and institutional contexts
Globalizing Through the Internet •Though a we_____ gives the world access to firm's go___ and ser______, the inter___________ challenges faced by traditional MNCs remain. -The firm must still solve the gl____ - lo___ dile___, and deal with nat_____ cul_______ and inst_______ con_____
Multinational E-Commerce Strategy Implementation •Successful implementation of a multinational e-commerce strategy requires building an appropriate organization and developing the necessary technical capabilities to conduct electronic transactions. •The following provides an overview of the options available to multinational managers.
Multinational E-Commerce Strategy Implementation •Successful impl_______ of a multinational e-commerce strategy requires building an app_____ org______ and developing the necessary tec_____ capabilities to conduct elect____ trans_______. •The following provides an overview of the options available to multinational managers.
Organization for economic cooperation and development
OECD org_______ for ec______ coo__________ and de________
Picking a Market •E-commerce potential may be substantial in Latin America because of the Mercosur trade group. •Mercosur Alliance Explained •Potential exists for Southeast Asian countries with membership in the ASEAN trade group. •The European Union is the next boom for e-commerce because many countries such as France, Italy, and Germany have retained market inefficiencies of the pro-Union days
Picking a Market •E-commerce potential may be substantial in Latin America because of the Mer_____ trade group. •Mer_____ Alliance Explained •Potential exists for Southeast Asian countries with membership in the AS___ trade group. •The Eur______ Un___ is the next boom for e-commerce because many countries such as France, Italy, and Germany have retained market inef________ of the pro-Un___ days
Picking a Market •Not all countries are equally e-commerce ready. -The population must have access to computers and infrastructure links to the Internet -Governments and financial institutions must be ready to protect and process e-commerce transactions •Growth in e-commerce shows that benefits outweigh the risks •Competition is heating up - achieving sustainable competitive advantage is difficult where competitors can easily copy business models
Picking a Market •Not all countries are eq____ e-commerce ready. -The pop_______ must have access to com___ and infras______ links to the Internet -Gove______ and fina______ insti_______ must be ready to protect and process e-commerce transactions •Growth in e-commerce shows that be_______ outweigh the risks •Competition is he_____ up - achieving sustainable competitive advantage is difficult where competitors can easily copy bus_______ models
Steps for a Successful E-Commerce Strategy Experts suggest 7 fundamental requirements - leadership - Build on current business models and experiment with new e-commerce models - Meet the challenge of developing an e-commerce organization. - Allocate resources to the e-commerce business. - Have an e-commerce strategy - Develop appropriate e-commerce systems. - Measure success
Steps for a Successful E-Commerce Strategy Experts suggest 7 fundamental requirements - lea_____ - build on cu____ bu_____ mod____ and exp_____ with new _-co_____ models - meet the cha______ of deve_____ an e_co______ org____ - All______ res_______ to the _-co______ bus_______ - Have an _-c_____ st____ - Dev_____ app________ _-c______ sy____ - Me________ su_______
The Internet Economy •Many of the issues involved in business over the Web are similar to those faced by traditional MNCs. •The next generation of Multinational managers must address unique challenges in formulating and implementing multinational strategies for the Internet economy.
The Internet Economy •Many of the is_____ involved in business over the W__ are similar to those faced by tra______ M__s. •The next generation of Mul________ man_____ must address unique challenges in for________ and imp_______ mul_______ strategies for the Int_______ economy.
Convenience
The Web is in operation 24/7. con________
C2G - Government - citizens - taxes, education, healthcare
The gov________ can interact with cit_____ facilitates payment of ta_____, edu_____, heal____, etc
Two indicators of the global presence of e-commerce - secure server - internet hosts
Two indicators of the global presence of e-commerce - se____ ser___ - int_____ ho___
Types of transactions - B2C - B2B - C2C - C2B - C2G - B2G
Types of transactions - _2_ - _2_ - _2_ - _2_ - _2_ - _2_
Cultural Differences
Web sites must be multilingual and culturally appropriate cu________ di__________
secure server
an Internet host that allows users to send and receive encrypted data
B2C
buying toys from eToys
Speed of access
company's products or services can be accessed immediately from anywhere in the world. sp____ of ac________
Internet hosts
computers connected to the Internet with their own IP addresses
avalibility
ensuring information is accessible to authorized users av______
integrity
ensuring that the information collected is accurate and reliable in_______
E-Commerce Diffusion
linkage between brick and mortar and internet. is occurring at a rapid pace worldwide
Network Readiness Index
examines the readiness of countries to benefit from products and services relying on the Internet
Traditional cross-border transaction complexities
exchange rates, varying taxes, and government regulations. Tra________ cr___-bo____ tra_______ com______
E-commerce Enablers
fulfillment specialists that provide services such as Web site translation, and calculate shipping, value-added taxes, duties, and other charges unique to each country. (outsourced help) e-c________ e________
authentication
having systems in place to ensure that persons using the systems are legitimate auth________
Physical
infrastructure to deliver products (ex: UPS tracking)
Compatibility
is adoption of e-commerce com______ with widely held values in the company?
Secuirty
is e-commerce adoption safe
C2B
price comparison websites
confidentiality
protecting private information con_________
E-Commerce Security
the degree to which customers feel that their private, personal information can be safeguarded in the hands of online companies collecting such information
Brick-and-mortar
traditional, non-virtual business operations
B2B - 75-80 - revolution in supply chain management - businesses and suppliers - enhanced - collaborate - aspects - value chain
•#-#% of current e-commerce business •Significance of _2_ comes from the rev_______ in s_____ ch___ man_______ made possible by electronic links between bu_________ and sup______ •The developments in IT and IT-related technologies have en_______ the ability of companies to coll________ on all as______ of the va___ ch___
A Standardized Web Site
•A company's web sites are fairly similar in layout and design around the world. a sta________ w__ si___
•A recent report suggests that countries that invest in broadband enjoy an even greater "productivity surplus" that access to the Internet through other means. A good Internet infastructure is required to benefit economically from the Internet
•A recent report suggests that countries that invest in bro________ enjoy an even greater "prod_______ surp___" that access to the Internet through other means. A good Internet infas________ is required to benefit econ_________ from the Internet
•Also, local realities require implementation decisions. -Many areas of the world do not process data the same way. In some countries, last names may come first. -Similarly, not all countries use credit and debit cards
•Also, local realities require implementation decisions. -Many areas of the world do not pro____ d___ the same way. In some countries, last names may come first. -Similarly, not all countries use cre___ and de___ cards
•Although small in comparison to the traditional economy, the Internet economy is: -Growing faster than any other business trend in history; a worldwide phenomenon -Drastically changing how international business is done
•Although sm___ in comparison to the tra_______ economy, the Int______ economy is: -Growing f_____ than any other business trend in history; a worldwide phenomenon -Drastically changing how int________ business is done
•Aspects of the Internet and e-commerce globally: -By 2016, there will be around 3 billion Internet users -In 2013, use of mobile-cellular subscriptions, reached penetration rates of 96% worldwide. -Mobile broadband subscriptions have shown explosive growth.
•Aspects of the Internet and e-commerce globally: -By #(year), there will be around # billion Int_____ users -In #(year), use of mobile-cellular subscriptions, reached penetration rates of #% worldwide. -Mobile broadband sub________ have shown explosive g_____.
•Aspects of the Internet and e-commerce globally: -Online advertising is expected to grow 12% a year and will total almost $124 billion in 2016. -In 2016, it is expected that 1.32 billion individuals will be buying goods and services online compared to 793 million individuals in 2011 -The Internet of Everything
•Aspects of the Internet and e-commerce globally: -Online advertising is expected to grow #% a year and will total almost $# billion in #(year). -In #(year), it is expected that #.## billion individuals will be buying goods and services online compared to ### million individuals in #(year) -The Int_____ of Eve______
-Meet the challenge of developing an e-commerce organization. - separate - seamless - entire
•Basic choice is between a sep_____ autonomous entity for e-commerce business and a sea______ integration into the current model; also requires strong commitment throughout the organization •The en____ firm (not only top management) must be prepared to embrace the e-commerce model. meet the cha______ of deve_____ an e_co______ org____
-Allocate resources to the e-commerce business.
•Commit financial, human, and technological resources to develop e-commerce capabilities. All______ res_______ to the _-co______ bus_______
•Components of a successful multinational online presence require electronic capabilities and support throughout the value chain, such as: -Software to process pricing in multiple currencies -Systems to calculate & show purchase information on international shipping, duties, and local taxes -Systems that check compliance with local and international laws -Ability to give support in multilingual service centers -Fraud protection -Electronic payment models in addition to credit cards
•Components of a successful multinational online presence require electronic capabilities and support throughout the value chain, such as: -Soft_____ to process pri_____ in mul_____ curr_____ -Syst___ to calc_____ & show pur___ infor_____ on international ship___, dut___, and local ta___ -Systems that check comp______ with lo___ and inte_____ laws -Ability to give sup_____ in multil_______ service centers -Fra__ prot_______ -Ele_____ payment models in addition to cre___ ca___
•Culturally sensitive enablers go beyond simple translation - Web sites must be sensitive to cultural and religious differences •Discussion forums, blogs, and social networking sites are creating new opportunities for companies •Consumers are using user-generated content (UGC) to make purchasing decisions
•Culturally sensitive enablers go beyond simple translation - Web sites must be sensitive to cultural and religious differences •Discussion forums, blogs, and social networking sites are creating new opportunities for companies •Consumers are using user-generated content (UGC) to make purchasing decisions
•Decision to standardize or localize should consider cultural factors, language differences, need for information flow, and customer demands •McDonalds is an example of a company that has chosen to localize its online presence, designing its websites to appeal to both high-context and low-context cultures •Recent studies show evidence of the need for multinationals to adapt their websites according to cultural preferences
•Decision to sta_______ or lo____ should consider cul_____ factors, lan______ differences, need for inf__________ flow, and cus______ demands •McDonalds is an example of a company that has chosen to localize its online presence, designing its websites to appeal to both hi__-co___ and l__-con____ cultures •Recent studies show evidence of the need for multinationals to adapt their websites according to cul_______ pref______
•E-commerce companies work in 3 areas, and require 3 types of infrastructure: - Telecommunications - payment -Physical
•E-commerce companies work in 3 areas, and require 3 types of infrastructure: - Tele_________ - pa_____t -Ph_____
•Traditional companies with e-commerce units must: -Build a common vision and commitment to the e-commerce operation throughout the organization. -Change the organizational structure for quick reconfiguration of assets and capabilities
•Traditional companies with e-commerce units must: -Build a com___ vi____ and com________ to the e-commerce operation throughout the org________. -Change the org_________ str______ for quick reconfiguration of as____ and cap_______
•E-commerce enablers exist because many companies do not have the internal resources or capabilities to conduct all e-commerce functions •Many enablers now exist that specialize in helping companies globalize their e-commerce •In addition to e-commerce enablers that provide transaction services, numerous companies also offer web translations -Some have automated the process
•E-commerce enablers exist because many companies do not have the inte_____ res_______ or cap_______ to conduct all e-commerce functions •Many enablers now exist that specialize in helping companies glo_____ their e-commerce •In addition to e-commerce enablers that provide tran_____ services, numerous com_____ also offer web tra_______ -Some have automated the process
Share customer data across channels
•Example: Retailers can send tailored product emails based on store purchases. sh____ cu_______ d___ across ch______
•Experts suggest the use of: -Firewalls, intrusion detection software, and antivirus shields -Encrypt data -Require several levels of authentication -Use Website monitoring tools (makes sure the site is functioning well) -Abiding by privacy rules to address Internet security issues -IBM
•Experts suggest the use of: -Fir_____, intr_____ det______ software, and an______ shields -Enc_____ data -Require several levels of aut_______ -Use Website mon_______ tools (makes sure the site is functioning well) -Abiding by priv___ rules to address Internet sec____ issues -I__
•How can pure e-business companies meet these challenges? -Build relationships with e-commerce support companies and customers. -Attract and retain e-commerce-capable talent. -Develop an effective management team
•How can pure e-business companies meet these challenges? -Build rel________ with e-commerce sup______ com____ and cus_____. -At_____ and re____ e-commerce-ca______ talent. -Develop an ef______ ma_______ team
•How can pure e-business companies meet these challenges? -Develop information and management systems to respond to rapid growth. -Maintain rapid decision making, creativity, innovation, and flexibility.
•How can pure e-business companies meet these challenges? -Develop inf________ and ma________ sy______ to respond to rapid g_____. -Maintain rapid deci______ ma___, cre_____, inn_____, and fle______.
•How is a multinational e-business organized? Consider Amazon.com and Yahoo!. Each has a 3-tiered mix of global & local functions: •1. Corporate headquarters provides vision, strategy, & leadership that drive the worldwide electronic marketing. •2. HQ also provides shared services such as network infrastructure. •3. Local subsidiaries, which actually deliver the goods, take charge of functions better done locally such as managing the supply chain and dealing with regulations
•How is a multinational e-business organized? Consider Amazon.com and Yahoo!. Each has a 3-tiered mix of global & local functions: •1. Corporate headquarters provides vis___, stra______, & lea_______ that drive the worldwide electronic marketing. •2. HQ also provides shared ser____ such as network infrastructure. •3. Local subsidiaries, which actually deliver the goods, take charge of functions better done locally such as managing the su____ ch___ and dealing with reg_______
•Most experts agree that using the Internet to go international can help gain access to new markets. •Selling online allows a company to weather slowdowns in local markets while diversifying into new territories. •Going global through the Internet means more than just offering websites in local languages. -MNCs need to take into consideration culture, customs, and technical sophistication, while adapting their products to meet local needs.
•Most experts agree that using the Internet to go international can help gain ac______ to n__ ma____. •Selling online allows a company to we______ slo_______ in local markets while dive________ into n__ territories. •Going global through the Internet means more than just offering we_______ in local lan________. -MNCs need to take into consideration cu____, cus_____, and technical sophi______, while adapting their products to meet local ne___.
Keep customers informed
•Retailers find it impossible to maintain the same pricing and inventory on websites and in stores. Customers can be frustrated, and appreciate being informed. keep c________ in_____
•The Internet and electronic commerce (e- commerce) are drastically changing how international business is done. •The Internet allows any company to create a virtual and global presence to conduct operations around the world, and it allows MNCs to dramatically alter the way they present and communicate with global customers. •The growth of smartphones and social media (Facebook, Twitter, etc.) are revolutionizing commerce.
•The Int________ and ele______c commerce (e- commerce) are drastically changing how inte__________ bus______ is done. •The Int_______ allows any company to create a vir____ and gl____ presence to conduct operations around the wo___, and it allows MNCs to dramatically alter the way they pre____ and com________ with global cust_______. •The growth of smartphones and social media (Facebook, Twitter, etc.) are revolutionizing com_______.
•The OECD sees broadband development as a critical aspect of the Internet and e-commerce •Broadband can result in economic growth, facilitating social and cultural development, and even innovation
•The OECD sees bro_______ development as a critical aspect of the Int____ and e-com_______ •Bro______ can result in economic g_____, facilitating so____ and cul______ devel_______, and even inn_______
•The extent of e-commerce is difficult to measure. •One method is to estimate its contribution to a country's GDP.
•The extent of e-commerce is difficult to me_______. •One method is to estimate its cont______ to a country's G__.
•There is a hierarchy of difficulty in e-commerce depending on infrastructure requirements -Portals and infomediaries, are the simplest, and provide gateways to the internet -At the next level are businesses such as travel services, digital music, and software vendors - must rely on local infrastructure to take payments for their products -Most difficult are e-commerce businesses that rely on a physical infrastructure. •Large multinational firms that enter e-commerce with an existing global presence often have an advantage
•There is a hierarchy of difficulty in e-commerce depending on infrastructure requirements -Portals and infomediaries, are the sim_____, and provide gate____ to the internet -At the next level are businesses such as travel services, digital music, and software vendors - must rely on lo__l infr________ to take payments for their products -Most difficult are e-commerce businesses that rely on a ph______ infrastructure. •Large multinational firms that enter e-commerce with an existing global presence often have an adv________
•Traditional companies with e-commerce units must: -Change the organizational culture to create a supporting environment for e-commerce. -Attract and retain e-commerce-skilled employees. -Alter HR programs to suit the different skill requirements of e-commerce employees.
•Traditional companies with e-commerce units must: -Change the organizational cu______ to cr____ a sup______ env______ for e-commerce. -At____ and re____ e-commerce-sk_______ employees. -Al___ HR programs to suit the different sk___ requ_________ of e-commerce employees.
•Two options for a firm's technical capabilities: -Run all e-commerce functions internally, or -outsource to e-commerce enablers
•Two options for a firm's technical capabilities: -Run all e-commerce fun______ inte________, or -outs_____ to e-commerce ena_____
Build on current business models and experiment with new e-commerce models - reduce - enhance
•Use e-commerce to search for ways to red___ costs or en______ traditional services. build on cu____ bu_____ mod____ and exp_____ with new _-co_____ models
•What kind of e-business is easiest to take global? -depends on the types of products or services offered through e-commerce
•What kind of e-business is easiest to take global? -depends on the types of pr______ or se______ offered through e-commerce
E-commerce
•the selling of goods or services over the internet, and includes those delivered online (downloaded software) and offline (delivery by UPS).
